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Updated: October 7, 2022 @ 2:27 pm
(The Center Square) – The Arizona Auditor General’s Office feels as though the Arizona Office of Economic Opportunity Office could be run more efficiently.
Arizona Auditor General Linda Perry compiled a performance audit and sunset review of the Arizona Office of Economic Opportunity and released it to the public last week. In it, the office outlines key recommendations for the Arizona Office of Economic Opportunity, and both sides agree that these changes should be made.
The Auditor General’s report says that the Office of Economic Opportunity did not have evidence to show its benefits for more than $260,000 annually paid to the Arizona Commerce Authority for administrative and technical services in fiscal years 2020 through 2022. It also said that the office allocated some of this money to federal programs in ways potentially inconsistent with federal requirements.
The report also said that the Arizona Finance Authority (AFA), which exists within the office, had not implemented internal controls for managing and overseeing Arizona Industrial Development Authority (AIDA) activities. This includes its conduit bond program; this program issued about $2 billion in conduit bonds in fiscal year 2022. The Auditor General’s Office warns that this lack of oversight increases the chances of fraud and errors.
Additionally, the report found that the administrative costs for the conduit bond program were higher than necessary in fiscal year 2021. The report says that the operating costs were at least 70% higher than the three other conduit “issuer entities” that it reviewed.
As a result, the Auditor General’s Office made a pair of recommendations for both the Arizona Finance Authority and the Arizona Industrial Development Authority.
It recommends that the office make sure benefits and services provided by the Arizona Commerce Authority to the office are consummate with the costs paid. And it orders the office to comply with federal requirements for “allocating costs to federal programs.”
And the Auditor General’s Office says the AFA Board must make sure that the AIDA Board of Directors develops and implements a “comprehensive system of internal controls” for ADA activities. Plus, it says the AFA Board must ensure that the AIDA analyzes the conduit bond program’s operational costs to find cost savings.
In its response letter to the Auditor General, the Arizona Office of Economic Opportunity agreed to implement all four recommendations.
“We again extend our thanks to the Auditor General team for its efforts during the Sunset Review process,” Office director Sandra Watson wrote in a letter to the Auditor General.
And Gary Naquin, chairman of the Arizona Finance Authority, was grateful for the review and said in a letter to the Auditor General that it plans to implement the recommended changes.
“The AFA plans to promptly begin addressing identified issues and we look forward to sharing our progress at the agency’s 6-month follow-up,” he said.
Originally published on thecentersquare.com, part of the TownNews Content Exchange.
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