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Audit: MEDC gave $10M grant to ineligible entity

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(The Center Square) – An audit from the Officer of the Auditor General discovered a “significant deficiency” the Michigan Economic Development Corp. paid an ineligible entity $10 million.

The audit found an instance where the unnamed grantee met the first milestone and received a $10 million grant payment. However, the release of additional funds was contingent on the grantee documenting it depleted all the funds and the grantee didn’t show receipts that $2.9 million in grant money was spent.

The audit notes: “MEDC informed us it had verbal communication with the grantee and thought its payment approval was sufficient to revise contract terms and did not require a written acknowledgment by both parties.”

State Rep. Ann Bollin, R-Brighton, called the mistake “unacceptable.”

“If the state is going to give our hard-earned tax dollars to big corporations in the name of economic development, there should be strong safeguards in place to protect those investments,” Bollin said in a statement. “This audit uncovered a betrayal of the public’s trust and a disturbing lack of accountability from the MEDC. It’s unacceptable.”

Gov. Gretchen Whitmer’s next budget aims to cut $8 million of funding from the OAG that continues to find mistakes.

For example, recent audits have found:

The Michigan Liquor Control Commission lost more than 62,200 bottles of liquor.The Unemployment Insurance Agency failed to perform some employee background checks or sever timely ex-employee access to databases.The Michigan Department of Education never fingerprinted 4% of contracted staff, and 7% weren’t done on time as required by state statute.The OAG found the Cannabis Regulatory Agency “averaged 196 days and took up to 757 days to complete disciplinary action for 123 formal complaints involving licensee violations.”Critical hospital infrastructure needs to be inspected more often.

The MEDC doles out significant subsidies for projects and pays for politicians to travel overseas and domestically to market Michigan.

For example, the MEDC spent $44,000 on Whitmer’s travel to Davos, Switzerland to the World Economic Forum and an unknown amount to travel to Taiwan this year.

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