CHARLESTON, W.Va. (AP) — A West Virginia agency did not keep adequate records of a loan program intended to boost the state’s economy, according to a new report.
The West Virginia Post Audit Division noted the failures of the Economic Development Authority’s $25 million Non-Recourse Loan Program in a report released Tuesday, The Parkersburg News and Sentinel reported.
“It is the Legislative Auditor’s opinion that the Loan Program did not achieve the intended outcomes and what was achieved is difficult to quantify,” the report said.
The Economic Development Authority borrowed $25 million and used the money to fund seven venture capital firms that were supposed to invest funds in the state and create jobs.
More than $24 million was invested in seven firms from 2002 to 2016. Auditors found that two never invested in West Virginia and four have entered into receivership.
The State Treasurer’s Office tried to close out the loan in 2019, but found missing and incomplete records, which led to the audit.
Auditors said in the report that adequate records of the loan program were not kept, so it wasn’t clear how many jobs or businesses were created. It also said $674,222 has been repaid on the principle loan, leaving more than $24 million outstanding.
Caren Wilcher, associate director of the Economic Development Authority under Gov. Earl Ray Tomblin, said the companies raised more than $190 million, including the nearly $25 million from the loan program. Wilcher said five companies invested $41 million in 25 businesses and helped create or retain more than 400 jobs. She said most issues noted in the audit happened under previous leadership.
“Current leadership and staff at WVEDA were not employed at the inception of the Program,” Wilcher wrote in her response to the audit. “Management and staff involved with the inception of the Loan Program have either retired from WVEDA or left state government.”
The report recommended that any future programs have clear guidelines and benchmarks to assess how it is working.
“Whether the state received a fair return on investment in terms of job creation and economic development in relation to the roughly $24.5 that remains in unpaid principal is not clear based on the information available,” the report said.