LANSING – A performance audit released Wednesday of the Michigan Strategic Fund found there was an omission of data during two fiscal years of reporting on a tax credit provided through the department.
The audit, released Wednesday by the Office of the Auditor General, focused on the Michigan Economic Growth Authority Tax Credit Program overseen by the MSF.
The audit found during a review of fiscal years 2014 and 2015 that annual MEGA tax credit reports didn’t include information on tax credits issued in previous years. The MSF only reported the current reporting year certificate amounts awards for each written agreement.
“MSF informed us that its omission was an oversight during the preparation of the fiscal year 2014 and 2015 report and that it had previously included this information in its 2010 through 2013 annual reports,” the audit stated.
Auditors recommended improving the annual MEGA tax credit information reporting. MSF agreed with the recommendation and stated that the issue has been corrected for its 2016 annual report for the tax credit and a new process has been implemented to ensure compliance is maintained.
The audit also included an observation that “statutory clarification is needed for certain statutes that limit the public transparency of MEGA tax credit information.” It went on to say that the auditing process identified instances where confidentiality provisions in state law restricted the MSF and the Office of the Auditor General from reporting essential MEGA tax credit information to residents and users of audit reports.
The MEGA tax credit was created in 1995 and is a refundable tax credit to a business’s Michigan Business Tax liability. The credit was awarded to Michigan businesses that enter agreements with the MEGA Board in committing to making capital investments as well as creating or retaining an agreed-upon number of jobs in the state. The state discontinued the program as part of the 2011 tax changes though many firms still have credits that have yet to expire.
MEDC has 60 days to develop and submit a plan for complying with recommendations found in the audit to the State Budget Office’s Office of Internal Audit Services.
This story was published by Gongwer News Service.
