Auditor’s office to work on JobsOhio controversy todayPublished: 3/19/13 @ 12:07
By Marc Kovac
Republican state Auditor Dave Yost has ordered Jobs-Ohio officials to appear in his office at noon today to provide financial documents and answer questions.
The subpoena he issued earlier this month and subsequent public skewering of the economic development nonprofit has been the talk of the Statehouse and likely will garner additional attention.
Here are 10 things you should know about Jobs-Ohio and the ongoing ruckus over the way it’s funded and whether its books should be open to public scrutiny:
1 Created: Kasich announced his plans to replace the Ohio Department of Develop-ment with a private non-profit board headed by business executives while still on the campaign trail in 2010.
Kasich and others believe that businesses are more comfortable talking to executives behind closed doors than dealing with the bureaucracy and increased scrutiny of working with a public development office.
2 Legislation: There have been at least four bills passed by lawmakers and signed by Kasich that include Jobs-Ohio provisions.
The first was last session’s House Bill 1, which created the nonprofit, outlined board membership and made clear that JobsOhio was a private endeavor with limited financial disclosure, operating outside of portions of the state’s open meetings and records laws.
The last biennial budget (HB 153) outlined JobsOhio’s funding, via the state’s liquor enterprise, and included other language related to its operations.
Kasich’s midbiennium review last year included additional provisions related to the liquor enterprise.
And Senate Bill 314 renamed the Ohio Department of Development to the Development Services Agency and solidified its relationship with the private nonprofit.
The latter, which was passed with broad bipartisan support, exempted certain contracts between JobsOhio and DSA from public review and reiterated the nonprofit’s private status, exempt from the state’s public-records laws.
3 Criticism: There are critics of the setup from across the political spectrum.
Though there was bipartisan support for many of the bills, Democrats generally have opposed JobsOhio and unsuccessfully attempted to amend to require greater oversight, via Controlling Board approval and state auditor reviews.
The Ohio Supreme Court is set to hear a lawsuit questioning the constitutionality of the nonprofit, brought by the liberal and conservative groups who don’t think the state should be funneling public money and resources to a private organization. They also say the state constitution prohibits the state from establishing such private enterprises.
4 Transparency: Though JobsOhio is a private nonprofit, lawmakers and Kasich included provisions requiring it to release an annual report of its completed deals with businesses, plus play host to regular public meetings. Earlier this month, the Development Services Agency also released a private audit conducted late last year and other financial documents, including details of employee and officer compensation totaling more than $850,000.
Of the more than two dozen of the latter, 13 made six-figure incomes, with three earning $225,000, according to documents.
5 Grants: One line in the audit drew attention from Statehouse Democrats and others: Among revenues and support reported by the nonprofit, nearly $5.8 million came from grants.
That was news to critics, who believe that lawmakers OK’d $1 million for JobsOhio’s startup expenses but no other funding. Rep. John Carney, a Democrat from Columbus, and others have questioned how the Development Services Department could shift money to JobsOhio without Controlling Board or other approvals.
But Laura Jones, spokeswoman for the nonprofit, said lawmakers did approve the funding, signing off on $5 million for the Ohio Business Development Coalition for fiscal 2012 as part of the last biennial budget bill.
The funding was allocated under “marketing initiatives” for the “Promote Ohio Program.”
6 The Coalition: The Ohio Business Development Coalition has received state funding since Gov. Bob Taft was in office for marketing and economic development outreach on behalf of the Ohio Department of Development.
The coalition has since been renamed the “JobsOhio Beverage System,” or JOBS for short.
JobsOhio acquired JOBS in July 2011, and Jones said the former coalition will manage the state’s liquor enterprise.
7 The Subpoena: Though lawmakers and Kasich attempted in state law to shield JobsOhio’s financials from public view, questions remain whether the state auditor has authority to review all of the nonprofit’s books.
Yost’s subpoena directs JobsOhio to send its chief financial officer or other representative to his office at noon today, armed with financial statements, general ledgers, “bank statements for ALL accounts” and other documents.
“Our concern is for accountability, transparency,” Yost said. Yost has alleged no wrongdoing by the nonprofit or state development officials.
8 Governor’s Response: Kasich, the Republican leaders of the Ohio House and Senate and other state officials have said repeatedly in recent days that Yost should have access to information on any public money that was provided to JobsOhio and how it was spent.
But they’ve also made it clear that they do not think the state auditor should be allowed full access to a private nonprofit’s books.
9 New Director: Amid the growing clamor of critics of JobsOhio, Kasich announced that he was replacing the director of the Development Services Agency with another cabinet member.
Commerce Director David Goodman takes over, while Christiane Schmenk pursues “a position outside the agency.”
Schmenk applied in early February to become executive director or senior manager of the state medical board.
A Kasich spokesman denied Schmenk was fired or any connection between the director shift and the current JobsOhio brouhaha, though he also declined to comment on whether she was asked to resign.
10 More to Come: Expect more JobsOhio criticism in coming days and weeks, given the 2014 campaign season that’s just around the corner and Democrats sensing the opportunity to challenge the all-GOP statewide slate.