WVEDA: Audit shows need for greater accountability
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For most West Virginians, losing track of $250 -- or, for that matter, even $25 -- would be a problem. It seems as though for the West Virginia Economic Development Authority, losing track of $25 million was not.
When the EDA was created during then-Gov. Bob Wise's administration in 2002, one of the goals was the creation of jobs. So, the EDA borrowed $25 million from the Investment Management Board to fund seven venture capital firms, which were supposed to do just that.
"It is the Legislative Auditor's opinion that the Loan Program did not achieve the intended outcomes and what was achieved is difficult to quantify," said a report released this week by the West Virginia Post Audit Division.
There are missing and incomplete accounting records and financial statements spanning several years. The problems were discovered when former state treasurer John Perdue tried to close out the loan program.
An audit showed the loan program could not quantify the number of jobs created by the venture capital firms. More than $24 million of what was borrowed remains outstanding. And the attitude among the bureaucrats seems to have been that the gross mishandling of taxpayer dollars was someone else's problem.
"Current leadership and staff at WVEDA were not employed at the inception of the program," said Caren Wilcher, who was associate director of the EDA under Gov. Earl Ray Tomblin. "Management and staff involved with the inception of the loan program have either retired from WVEDA or left state government."
State Treasurer Riley Moore is right to ask lawmakers for measures that would increase oversight, transparency and accountability over taxpayer funds used by the EDA. It's a shame we have to assume they need it.
But West Virginians have no idea whether the investments allegedly made on their behalf accomplished anything, and there is $24.5 million remaining in unpaid principal on a loan made nearly 19 years ago. If the bureaucrats can't be trusted to do the right thing for the people they serve, lawmakers will have to step in and make sure it happens, anyway.