Connecticut Innovations (CI), the state’s quasi-public venture capital arm, failed to adequately monitor whether companies receiving state assistance met job-retention and creation requirements, according to a new state audit.
The Auditors of Public Accounts on Tuesday released findings for fiscal years 2023 and 2024, concluding that CI did not “sufficiently monitor” job compliance among aid recipients. The audit also said CI failed to “promptly” submit more than half of its required reports to the legislature and included “incorrect information” in one quarterly report.
Auditors found that one CI board member missed three consecutive meetings and 80% of meetings in fiscal 2024, in violation of state law.
CI officials did not immediately respond to a request for comment.
The report notes that CI’s job creation or retention requirements
mandate that companies receiving financial aid or incentives maintain a presence in Connecticut. Some agreements specify the number of full-time employees that must be maintained here, while others require a company to locate most of its U.S.-based employees and subsidiaries in the state.
CI’s job verification policy requires it to obtain independent reports, such as Department of Labor filings, for companies reporting more than five full-time employees, the audit states. For companies reporting five or fewer full-time employees, CI relies on self-reported data in its assistance application or an annual job survey, the audit states.
Between fiscal 2023 and 2024, CI distributed about $93.4 million in financial assistance through 219 awards. As of June 30, 2024, recipient companies reported retaining 18,880 jobs and creating 9,993.
Auditors recommended that CI strengthen oversight of employment data and ensure that independent verification is used whenever required. They also urged the agency to revise its annual job survey to collect more complete information.
CI agreed with the findings, stating that it already uses an independent source to verify employment within Connecticut and will now expand that process to include out-of-state jobs for companies with such agreements.
The agency also pledged to improve the timeliness of its reporting, remind board members of attendance requirements, and update its bylaws to reflect state law.