The Board did not properly approve and monitor projects that were provided financial assistance. For example, the Board did not develop and adopt, by resolution, uniform criteria for the evaluation and selection for each category of projects to be provided financial assistance, including the preparation of a written cost-benefit analysis (CBA), as required by New York State General Municipal Law (GML). Of the nine approved projects we reviewed, a written CBA was not prepared for four of the projects, and the CBAs prepared for the other five projects did not include all the information required by GML. As a result, the Board could not properly assess these projects, before their approval, to ensure the benefit to the community would be a sufficient return for the financial assistance to be provided.

The purpose of our review was to assess the City of Poughkeepsie Industrial Development Agency’s (IDA’s) progress, as of September 2024, in implementing our recommendations in the audit report City of Poughkeepsie Industrial Development Agency – Project Approval and Monitoring (2021M-168), released in July 2022.

The Board and AIDA officials did not properly approve and monitor projects. The Board and AIDA officials did not review all supplemental documentation for project approval or properly monitor the 16 active projects.

The City of Poughkeepsie Industrial Development Agency (CPIDA) Board did not properly evaluate and approve projects and monitor the performance of businesses that received financial benefits.

The Board and officials did not properly approve and monitor projects. Therefore, the Board could not effectively evaluate projects or hold project owners accountable.

Although the Board evaluated projects prior to approval, the Board did not adequately establish and document its evaluation and approval process. In addition, the Board did not properly monitor the performance of businesses receiving financial benefits.

We reviewed 100 claims totaling $846,279 and determined they were for appropriate purposes and generally supported by adequate invoices and/or other documentation. However, none of these claims were independently reviewed and approved prior to payment.

Although the tested disbursements were for valid purposes, LDC officials did not always ensure they were properly authorized and supported.

For the 10 projects we reviewed, the Board appropriately evaluated the projects before approval. However, project monitoring efforts should be improved.

While the Board evaluated projects prior to their approval, Board members should improve TCIDA's efforts to monitor businesses' job performance and tax exemptions.

The Board did not properly approve and monitor projects.

The Board did not properly approve or monitor its projects.

The Board and officials did not properly approve and monitor projects or take action when goals were not met.

JCIDA officials did not appropriately evaluate all projects prior to approval or monitor the performance of businesses that received financial benefits.

The Board adopted adequate policies and guidelines for project approval. In addition, payments in lieu of taxes (PILOTs) for four projects and 26 revolving loan payments were accurate and received on time. However, the Board and the Administrator did not properly monitor tax abatement and loan projects. The Board did not require the Administrator to compare reported job creation and retention figures with project goals or track sales tax abatements to ensure that the exemptions taken were within allowable limits.

The Board properly evaluated projects prior to approving financial benefits. However, the Board could improve its monitoring and verification of project performance related to job creation and capital investment. For example, although the payroll tax forms submitted by five of 27 companies did not support their employment reports, OCIDA officials did not request additional information to verify the employment information. In addition, OCIDA does not require companies to provide periodic progress reports or other documentation to evidence their actual capital investments. We also found that four companies received sales tax exemptions that exceeded approved amounts by a total of $173,446. Of this amount, officials properly recaptured $97,020 from one company.

Effective September 2016, the Board authorized revisions to its standard project application and adopted new policies for evaluating projects and recapturing financial assistance to address the 2015 IDA reform legislation. We reviewed all seven projects approved by the Board after the 2015 IDA reform legislation became effective. We found that all these projects had a standard application, a uniform project agreement including provisions for suspension, discontinuance and recapture of financial assistance, which were consistent with this legislation. However, we found that the Board did not ensure that adequate cost-benefit analyses for proposed projects were developed before project approval and annual project status reports were submitted in a timely manner. Finally, the Board did not ensure that annual assessments of progress toward achieving project goals were performed.

The City of Albany Industrial Development Agency (CAIDA) did not incorporate goals into project agreements. The CAIDA did not have an adequate or consistent system to incorporate goals into project agreements even though the projects were approved based on specific characteristics. Generally, only goals related to employment were incorporated in project agreements when a project benefits agreement was included. However, 13 of the 15 projects met or exceeded their job creation and/or retention goals. These 13 projects had 2015 and 2016 employment goals to create and/or retain 1,034 and 1,270 full time equivalent (FTE) jobs and reported a total of 1,666 and 1,876 FTE jobs, respectively. Finally, the CAIDA did not monitor project performance for investment or revitalization goals.

The Board does not appropriately evaluate projects and award financial benefits because it has not established adequate project evaluation criteria. Although the Board has established a Uniform Tax Exemption Policy (UTEP), the policy does not include general criteria applicable to all projects or guidelines for projects seeking tax exemptions. In addition, the cost-benefit analyses used to evaluate projects do not compare the community costs against expected community benefits. Moreover, the Board does not properly monitor the performance of businesses because it does not compare employment and capital investment goals against actual project results. Lastly, although the UTEP contains a recapture provision, this provision is vague and does not include specific events that could trigger recapture and plans for implementation or potential penalties. While we acknowledge that specificity in the recapture clause is not required, it is good business practice to include some type of criteria to facilitate accountability. Finally, SIDA officials did not effectively administer the City's Development Fund money. SIDA's audited financial statements show that over $2 million is due to the City from the Fund. SIDA officials should coordinate with City officials to determine the extent to which the $2 million liability should be repaid to the City.

Although SCIDA officials developed a Uniform Tax Exemption Policy for project evaluation and approval, the method of determining the benefits to be provided is not well-defined or required to be documented. Therefore, it is possible that not all project applications of the same type were evaluated using the same criteria. SCIDA officials also do not verify the information provided by businesses on project applications for accuracy and completeness. As a result, a definitive determination cannot be made whether or not the Board evaluated and provided financial assistance to projects in accordance with SCIDA's mission. The Board also did not develop and implement adequate procedures to monitor approved projects. SCIDA officials have implemented procedures for monitoring projects, including obtaining sufficient information annually to support project jobs and sales tax exemptions, but the analysis of the information obtained from the companies was not sufficient. Without adequate documented procedures for evaluating, awarding and monitoring projects, the Board has limited assurance that SCIDA projects have met their performance goals and benefited taxpayers. In addition, without an adequate recapture provision, SCIDA limits its ability to take recourse in the event that a project is underperforming.

We found that WCIDA did not adequately evaluate, approve or monitor projects, and did not properly bill for administrative fees. The Board did not consistently follow criteria established in the UTEP or compare submitted project applications to such criteria. WCIDA officials also did not ensure that all projects were permissible IDA projects in accordance with statutory requirements, and did not request sufficient data or verify the data reported by projects annually to evaluate project performance. Therefore, the Board cannot be assured that the community is receiving the expected benefits or that WCIDA is collecting all revenue to which it is entitled.

TCIDA had no employees and instead the Board relied on Tompkins County Area Development, Inc. (TCAD) employees to carry out TCIDA's mission without making independent judgments. Although the Board approved the IDA projects submitted to it, the Board did not provide adequate oversight during its project approval process. Therefore the Board could not be certain if TCAD staff submitted all projects for its approval and projects could have been given benefits without its knowledge. Additionally, the Board was not sufficiently involved in monitoring various aspects of the projects. Although three businesses did not meet their job creation goals, the Board did not formally document its decision not to recapture benefits. Further, two local taxing authorities did not bill two businesses enough for PILOT payments. As result, the businesses were underbilled by more than $26,000 and the Board was unaware that, as a party to the PILOT agreements, it was responsible for overseeing this process. Lastly, the Board did not review or approve the required annual reports to ensure accuracy or completeness. As a result, the Board cannot be sure that the community is receiving the expected economic benefits.

We reviewed 25 projects totaling approximately $535 million and found deficiencies in NCIDA's evaluation and approval of businesses seeking IDA benefits, its determination of benefits provided and its subsequent monitoring of the businesses for compliance. For example, the cost-benefit analysis (CBA) information prepared for each proposed project did not include a CBA ratio calculation, and NCIDA officials did not establish any policy or procedure to define the information or explain how a CBA ratio could be calculated and applied in the evaluation process. Therefore, evaluation criteria may not be consistently applied, and the basis for approval or rejection of businesses may not be clear. NCIDA officials also did not require periodic reporting of necessary information from businesses or verify the information that was provided, and therefore did not adequately monitor projects to determine if goals were met or remedial action was needed. As a result, PILOTs totaling $69,513 were billed incorrectly. Further, NCIDA under-reported inaccurate PILOTs totaling a net of $166,114 on its annual report to the New York State Authorities Budget Office for the year ending December 31, 2013.

HIDA officials developed a Uniform Tax Exemption Policy (UTEP) for project selection, but the method of determining the benefits to be provided is not well defined or required to be documented. Therefore, it is possible that not all project applications of the same type were evaluated using the same objective criteria. The Board did not design and implement an adequate system to monitor HIDA approved projects and did not develop an adequate recapture policy to allow for the recovery of previously granted benefits if job creation, economic goals or other terms of the agreements are not met. Further, HIDA officials do not verify the amounts provided by businesses when applying for financial assistance or verify the annual reported data that could be used to evaluate project performance. For example, HIDA officials did not have a system in place to track the amounts directly billed and collected by taxing jurisdictions for PILOTs. As a result, we found that 21 businesses were overbilled PILOTs by a total of $17,870 and 25 were underbilled PILOTs by a total of $38,850. Also, HIDA officials did not establish a process for monitoring and tracking sales and use tax exemptions.

The Board has not established documented criteria and procedures for selecting projects and subleases. However, the Board has established a Uniform Tax Exemption Policy, but this policy does not include specific criteria for selecting and approving projects. The Board also does not document their approval process or rationale for approved projects or subleases, or prepare a documented cost-benefit analysis or risk assessment during the project approval process. Although the Board has established an application and administrative fee schedule, the amounts collected for administrative fees deviated from this schedule for six of the nine current active projects where information was available for review. As a result, SCIDA charged approximately $50,000 less in fees than their schedule. In addition, they forgave administrative fees after the fact, resulting in approximately $100,000 in additional lost revenue. SCIDA also relies on County officials to negotiate and select subleases, and has not established their own criteria.