Audit Objective
Determine whether the Lewis County Industrial Development Agency (LCIDA) Board (Board) ensured staff service fees were accurately calculated and paid in accordance with written agreements.
Key Findings
The Board entered into written staff services agreements (agreements) with Naturally Lewis, Inc., a not-for-profit corporation (Corporation), to provide general administrative and staff support services to LCIDA for the last quarter of 2023 and for 2024. However, the Board did not ensure the fees paid to the Corporation were accurately calculated and paid according to the agreements, resulting in LCIDA overpaying $316,597 for such services. This was 172 percent more than the written agreements required.
These overpayments occurred because the calculation of the service fees included certain revenues and other fees collected by LCIDA that the agreements did not specify would be paid to the Corporation, and certain fees were not properly annualized as specified in the agreements. In addition, LCIDA paid a fee for one project which was not approved by the Board.
Had the Board exercised appropriate oversight, it might have identified and corrected these errors.
Key Recommendations
- Consult with legal counsel regarding the overpayments to the Corporation and, if appropriate, seek reimbursement.
- Review the supporting documentation and calculations for staff service fees to verify the proper amounts are calculated and paid to the Corporation.
LCIDA officials agreed with our findings and recommendations and indicated they have initiated corrective action.