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49
Comments on
Agency Response
Response of the Affected Agency
We transmitted a draft of this report to the Department of Business,
Economic Development and Tourism (department) on February 21,
2003. A copy of the transmittal letter to the department is included as
Attachment 1. The response of the department is included as
Attachment 2.
The department agrees with some of our findings and has begun to
address some of our recommendations. In its response, the department
stated that a formal marketing strategy was not in place due to the
narrowing of the loan target group by the past administration to high
technology and biotechnology loans. However, we note that the
department gave out one loan each in FY1997-98 and FY1998-99. Once
again, a formal marketing strategy will help the department achieve the
goals of the loan programs that it administers.
In addition, the department noted that the high rate of loan delinquency
is due to the Attorney General’s office not writing off loans deemed

Because of these assurances the authority does not believe that it would
be exposed to the “jeopardy” of any legal problems. We disagree with
the authority. Contractor assurances are not equivalent to an executed
contract and do not provide the authority with the same protections.
Furthermore, the authority stated that the example identified in the report
of a contractor’s payment dated prior to the final reports’ receipt and
approval is incorrect. The authority noted that the check was issued but
withheld from the contractor until the contractor’s final report was
received and approved. We would be unable to verify the authority’s
claims in this situation. However, it is not considered a reasonable
practice to have checks issued and held by the authority, as the checks
then become vulnerable to theft. Also, the check was for $40,000 and,
based on the authority’s claims, was held for about a month.
The authority also noted that it will immediately serve notice upon all of
its contractors that it will now insist upon strict compliance with its
technical contract management requirements. At the same time, the
authority will pursue legislative efforts for executive autonomy as a
means of addressing the untimely execution of contracts.
Finally, the department agreed with our findings and recommendations
regarding the unencumbering of closed, terminated, and/or completed
encumbrances and its petty cash funds and is taking measures to ensure
policies and procedures are improved and properly implemented.
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