WJTV News Channel 12 - Triangle companies receive grant money lacking proper oversight

Triangle companies receive grant money lacking proper oversight

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RALEIGH, N.C. -

An audit released this week accused North Carolina's Commerce Department of taking companies at their word that they were properly spending millions in grant money to create and save jobs.

State Auditor Beth Wood's report focuses on $20 million awarded in 2010 under the Commerce Department's Job Development Investment Grant (JDIG) program.  Since the program's inception in 2003, it has awarded 145 grants, totaling more than $600 million.

The award recipients for the audited period were expected to create about 5,800 new jobs and save around 6,800 others statewide.  Locally, WNCN learned that four companies were awarded a total of $637,000 to create 649 new jobs and save 1,871 others.  Those companies were: Caterpillar, Inc. in Lee County, Novo Nordisk in Johnston County, and Siemens Energy and Novartis Vaccines and Diagnostics, both in Wake County.

WNCN obtained the JDIG annual report for 2012, in order to account for the progress those four companies made in 2011 -- their first grant year.

Siemens and Novo Nordisk each saved the number of jobs they had separately promised – a total of 696 -- but they fell 30 short in creating new ones.  There's no record for Novartis and Caterpillar, Inc. because their progress hadn't been finalized at the time of the annual report.

WNCN left messages with all four companies, but only Novartis responded back.  A representative promised to pull their records.

The NC Commerce Department's Josh Ellis also told WNCN that he would look for their records.  Regarding the discrepancies with the number of jobs created, he said JDIG only pays the money at the conclusion of the grant period.  So if a company failed to meet their job creation or investment goals, it would not receive the full grant amount.  However, if a company surpassed its goals – as was the case with several outside our area – it would not be paid more than the initial JDIG amount.

He added that because of this "pay on the back end," he expected that the $20 million audited was actually less than the money initially pledged.

Following the release of the audit, Commerce Secretary Sharon Decker told reporters that companies now have to formally say that they are keeping their commitments, which becomes legally binding.

She also said her department is examining what other states are doing to oversee their grants and will release its findings and give an update on any changes in mid-November.

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