By Julie Carr Smyth
COLUMBUS: The state auditor cited Republican Gov. John Kasich’s signature job creation office on Thursday for sloppy handling of ethics and conflict-of-interest procedures in its first year but cleared its staff of the business conflict questions that have dogged it.
The formal review by Republican Auditor Dave Yost followed his high-profile fight for access to JobsOhio’s private financial accounts. The audit found eight procedural deficiencies at JobsOhio, a private nonprofit development corporation, during its first year of operation.
JobsOhio, which began operating in 2011, said all the processes have been addressed since then, many of them voluntarily identified and remedied.
The audit’s relatively benign findings after two years of wrangling over JobsOhio’s activities angered the office’s many vocal critics, mainly the liberal think tank ProgressOhio and Ohio Democrats.
“This is not an audit; this is a whitewash,” said state Rep. John Patrick Carney, Yost’s 2014 Democratic challenger. “They made no attempt to see that money was properly spent.”
Yost said JobsOhio’s fiscal soundness was left to accounting firm KPMG, which gave it a clean fiscal bill of health in October.
The JobsOhio compliance audit came the day Yost released an independent auditor’s evaluation of documents and dollars submitted to Ohio’s new Development Services Agency under its agreement with JobsOhio. That report identified transactions of more than $5.2 million for which the proper paperwork was lacking and detailed other issues.
Agency spokesman Todd Walker said Ohio “received back every penny of its contract.”
Yost’s JobsOhio review found the office didn’t have “sufficiently robust” procedures in place to assure potential conflicts and ethical violations were avoided.
It required multiple requests and extended efforts by his office, for example, to vet potential conflicts of interests that might have existed between JobsOhio directors, executives and employees and the companies the office was recommending for state tax incentives.
“JobsOhio had no clear formal procedure to screen for senior management and employee conflicts of interest or any mechanism for managing these situations,” Yost said.
Yost’s office selected 28 project files to review based on media reports, Ohio Ethics Commission referrals and the auditor’s staff recommendations. It identified potential conflicts in three instances. Two were fully cleared; the other was determined to be inconsequential.
Those results, JobsOhio wrote in its response, “point out the danger of those who would — with limited information — rush to judgment on matters involving an individual’s reputation.”
The audit said some JobsOhio directors failed to sign ethical conduct pledges or make written assurances they’d follow its self-imposed gift or conflict-of-interest policies until well after related business was conducted.
The review found about $60,000 in mostly public spending that was undocumented. JobsOhio received $1 million in taxpayer dollars to start and recently offered $1.5 billion in bonds backed by its long-term rights to Ohio’s liquor business.