Officials with the Chautauqua County Industrial Development Agency say they are making changes after being criticized by a state government agency on a number of ways the agency operates.

On Monday, the state Authorities Budget Office released its “Report on the County of Chautauqua Industrial Development Agency and Related Local Authorities’ Operating Practices.” The 59-page report includes a limited evaluation of the operations and activities of the Chautauqua Region Economic Development Corporation and the Chautauqua County Capital Resource Corporation.

The report concludes the board members of CCIDA, CREDC and CRC did not provide adequate oversight over management, adopt adequate policies and procedures, and monitor financial and management practices. “The lack of oversight, review, and monitoring by the board members exposes the authorities to unnecessary risk and the potential for misuse of funds,” the ABO wrote.

Some of the specific criticisms include:

¯ $130,785 in CCIDA funds used for inappropriate and questionable discretionary spending, including sponsorships, donations, holiday dinners, flowers, and other gifts;

¯ $73,115 in CCIDA credit card purchases made without receipts or adequate documentation, as well as the use of credit cards for $26,000 in inappropriate meal purchases and $11,194 in unauthorized purchases for another local authority;

¯ $50,629 of unauthorized and inappropriate CCIDA payments to the CFO, including $30,600 in car allowances and $18,429 in reimbursements for membership and other related expenses at a local golf course;

¯ $200,179 in compensation to CCIDA staff that were contracted or hired by the CEO to administer and operate another local authority;

¯ $128,000 in subsidized office space for the county;

¯ $1.9 million of combined funds for three separate local authorities (CCIDA, CREDC and CRC) in one bank account and other misallocated expenses among separate local authorities.

The ABO’s draft report was posted on line in May by the non-profit website, “Investigative Post.”

This time the report has additional pages, including the county IDA’s response to various criticisms.

The first time the report was released, Mark Geise, county IDA executive director and chief executive officer, said he was limited on what he could respond to, mainly because they needed to response to the state first.

He did note that they had done nothing illegal and most of the criticisms were due to a lack of policies and procedures outlined.

This time around, Geise made similar comments. “Certainly there are things that we can do better and will do better. At the end of the day we didn’t do anything illegal, untoward, or nefarious. They are mostly internal control policies that we need to put in place in order to put in place in order to comply with the many policies that the ABO believes Public Authorities need,” he said in a phone interview Monday.

Geise did go further in specifics. He noted that regarding credit card use or vehicle allowances, “It’s not that those things can’t be done; we just didn’t have a policy in place to cover those things,” he said.

Geise gave the example that if a business owner looking to expand or bring in a new business to Chautauqua County, that individual may want to meet over a meal. “Certainly those are things that all IDAs, all Public Authorities, do. … It’s very commonplace that you would have a meal with a developer,” he said.

On the flipside, Geise noted that it would be improper for potential developers paying for a meal for a county IDA representative. “That could be construed as buying favors. We want to always make sure that when they ask to meet with us – we do this all the time – that we pay for it,” he said.

In terms of the “holiday party” question, Geise said it’s commonplace for organizations like the IDA to have an end of the year annual meeting where they review the year. The question will be if the county IDA Board of Directors wants to continue that end of the year event. “If the policy that we draft says we’re allowed to have an annual meeting every year and the board approves that, then we can have an annual meeting. It all comes down to what does your policy look like,” he said.

There’s also some changes they’re planning on making, even though they may not legally have to. One example is with the golf membership, where the IDA spent $18,429. “We’re not going to do a golf membership anymore. I don’t want to argue the point if it’s allowable or not; we’re not going to do it anymore,” Geise said.

Overall, the Authorities Budget Office, made 42 recommendations to the county IDA, the CREDC and the CRC.

Gary Henry, county IDA Board Chairman, provided a written response for every recommendation listed. Most of the responses were that they agreed with the recommendation and will make changes, they’ve already made changes, or they are working with special legal council to review what they’re doing and then make adjustments as legally required.

Geise said at future board meetings they will be updating their policies as needed.