Legislators Pass Amendment Requiring JobsOhio, State Auditor Collaboration on Performance Audits
Columbus – Legislation passed today by the Ohio Senate would require the Auditor of State’s participation during performance audits of JobsOhio, the state’s privatized economic development agency.
The amendment to House Bill 10 aims to heighten the transparency of the privately operated agency by authorizing the Auditor’s office to serve as an independent third party during performance audits contracted out to private accounting firms.
“JobsOhio is a quasi-public agency that exists to serve a public purpose for Ohioans,” Auditor Yost said. “The people of Ohio deserve a seat at the table. This amendment ensures that any performance audit of JobsOhio is completely independent.”
Under the proposal, JobsOhio would collaborate with the Auditor of State when determining the scope of the audit. The amendment also would grant state auditors access to the performance audit work papers. The performance audits would occur every four years starting in fiscal year 2021.
Ohio is among 10 states with a privatized economic development agency, five of which have undergone performance audits with state involvement (Florida, Michigan, Rhode Island, Virginia and Utah).
Performance audits are data-driven assessments of the costs and efficiency of operations. They are useful not only in improving efficiency and saving money but in providing external, third-party evaluations.
Possible scope areas of a JobsOhio performance audit could include:
- Cost per created or retained job;
- Proportion of approval rates;
- Longevity of jobs created or retained;
- Comparison of job growth within the incentivized vs. non-incentivized segments;
- Time elapsed to reach a project decision;
- Gross payroll impact within the incentivized vs. non-incentivized segments;
- Net tax impact across all revenue bases;
- Whether internal metrics were achieved.
JobsOhio is currently in the late stages of a performance audit conducted by the private firm McKinsey & Company, but Yost said that audit falls short on accountability.
“In this arrangement, the audit firm answers to JobsOhio and not the people of Ohio,” he said. “The people need to be at the table.”
The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.