The New Jersey Office of the State Comptroller released a report finding that the Economic Development Authority (EDA) has substantially improved oversight of the administration of the state’s tax incentive programs. An audit undertaken in 2019 determined there was a lack of oversight and transparency in the grant process determining eligibility of applicants. The audit revealed that unreliable data was used for awarding tax incentives with poorly designed systems accounting for jobs created under the programs. The audit provided 21 recommendations to improve the grant process and subsequent monitoring of the program.
The EDA incorporated the following recommendations to ensure a return on the state’s investments:
- Establish monitoring and oversight activities to analyze whether jobs were created and retained.
- Establish a business’s baseline employment numbers upon application to properly monitor newly created jobs.
- Establish job reporting requirements and collect documentation to support job creation.
- Establish monitoring processes to assess business performance to compare to Department of Labor data.
- Develop uniform templates for reporting by businesses.
Other recommendations that have not yet been implemented will further increase accountability. The EDA plans to develop additional practices to ensure that businesses are complying with the terms of the incentives granted by maintaining proper employment status.
TECHNICAL INFORMATION CONTACTS:
Mark L. Nachbar
Principal
Ryan
630.515.0477
mark.nachbar@ryan.com
Mary Bernard
Manager
Ryan
401.272.3363
mary.bernard@ryan.com
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