Commerce Department addresses audit criticism.

Over one month after the release of a legislative audit critiquing the Commerce Department for its lack of oversight and transparency with money funding economic development projects, the agency has adopted some recommendations as state lawmakers prepare to address corresponding budgetary concerns in September.

The S.C. Legislative Audit Council report, released in early June, argued that the Commerce Department should up the ante on developing and publicizing performance criteria, such as new jobs created, for job development credits and grant projects.

"This is really the first audit to go into depth on these things," Eric Douglass, audit manager with the Legislative Audit Council, told GSA Business Report. He and Earle Powell, director of the Legislative Audit Council, noted that during the auditing process, the Commerce Department was interested in making some changes to their procedures.

According to Alex Clark, spokesperson for the Commerce Department, the agency has started to report performance measures beyond the initial investment and job-creation baseline required to receive grant funding. Following the audit's recommendations, performance measures also will be recorded for job development credit recipients.

"Adding information to our database in excess of the required amount will further demonstrate that the state often gets a better benefit for its bargain when companies create additional jobs above the minimum committed to in an RVA (revitalization agreement) or performance agreement (for grants)," Clark told GSA Business Report in a written statement.

She also said the department will account for the wages of new jobs when assessing grant eligibility, another suggestion found in the audit. Clark added that wages have always been reported with job development credit documentation.

In a move toward greater transparency, the agency also will add clawback amounts the money collected from failed or underperforming economic development projects in annual reports.

According to the audit, from 2009 to 2019, the S.C. Coordinating Council for Economic Development approved 972 total projects including 557 grants, adding up to $526.2 million, and 415 job development credits worth up to $6.2 billion if reimbursements are claimed and 66,684 jobs are created. Roughly $223 million in tax credits has been claimed so far.

Of the 248 grants closed since 2009, roughly 92% of required jobs were created. Grant recipients also exceeded the...