Ohio Auditor Dave Yost found sloppy record-keeping and a lack of safeguards for avoiding conflicts of interest at JobsOhio, the private non-profit created by Gov. John Kasich to handle economic development for the state.
Among the findings were that JobsOhio and its related non-profit spent $14 million on non-payroll expenses such as personal charges to credit cards and meals for government employees, and the auditor could find no record indicating that the board of directors approved and reviewed employee compensation.
Yost, a Republican, issued the long-awaited, 23-page audit on Thursday. The audit is the first and likely last public look at how JobsOhio operates and spends millions of dollars. Earlier this year, Republican legislators and Kasich adopted a new law that closes off the JobsOhio books to the state auditor.
Yost said the public interest would be better served if the state auditor were still in charge of auditing JobsOhio.
As it was, Yost had to subpoena records from JobsOhio and conduct the audit under a difficult relationship with the non-profit. “There was some arm wrestling along the way,” he said.
In a press conference Thursday, Yost said that the problems identified could be easily remedied. “The mission of JobsOhio is economic development and creation of jobs in Ohio. We ought not let the process be the enemy of that goal,” he said.
“Safeguards for detecting, managing, and avoiding conflicts of interest at the staff level were missing. Moreover, JobsOhio did not document any actions that it may have taken to informally screen for potential conflicts or to avoid or mitigate actual conflicts of interest,” the audit reported.
The audit covers July 5, 2011 — when JobsOhio started operating using public and private money — to June 30, 2012. JobsOhio subsequently repaid all public money.
JobsOhio Board Chairman James Boland said in a written response to the audit that many of the errors detailed by Yost occurred when the agency was in “start-up mode” and policies were being developed. He also noted that JobsOhio believes the audit was beyond Yost’s authority but the agency participated in the interest of transparency and accountability.
Democrat John Patrick Carney, who is running for auditor next year, said Yost caved to Republican political pressure and squandered an opportunity to conduct a thorough, credible audit of JobsOhio. “This is clearly not what we were promised by Dave Yost, which was a full audit of JobsOhio,” said Carney, who is a state representative from Columbus.
Yost challenged Carney to come up with specifics of where the audit fell short.
Although the state auditor is barred from directly auditing JobsOhio in the future, Yost noted that state law requires the agency receive future compliance audits from a public accounting firm hired by JobsOhio in consultation with the auditor’s office.
Carney promised that if elected state auditor, he will file suit to challenge the constitutionality of the new laws closing off JobsOhio records from audits.
Since Kasich created it to replace the state development department, JobsOhio has been a lightning rod for controversy. The state assigned future liquor profits to JobsOhio, which then sold bonds based on that revenue stream. Supporters maintain that JobsOhio is now funded by private money. “That is a ridiculous statement and it doesn’t pass the smell test,” Carney said.
JobsOhio is exempt from most public records and ethics laws, state audits and open meeting laws. The Dayton Daily News found that six of nine JobsOhio board members had direct financial ties to companies that received state incentives and JobsOhio employs mostly former state workers but at higher salaries.