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Audit: DEED should be more transparent about the Minnesota Investment Fund

The Minnesota Investment Fund is designed to create jobs, but the report’s impact is unclear.

That’s according to the Office of Legislative Auditor, which presented its findings to the House Job Growth and Energy Affordability Policy and Finance Committee Wednesday.

The fund is designed to award money to help businesses complete a project, with the aim of adding workers and retaining jobs. The Department of Employment and Economic Development has a lot of “freedom” when it comes to choosing which businesses are selected, said David Kirchner, an evaluator with the office’s Program Evaluation Division.

Kirchner added that the program criteria isn’t publicly known and in many instances is subjective and easy to meet, with applicants giving unconvincing reasons why they need state funds.

WATCH Full video of Feb. 28 job growth and energy committee hearing

The report also found that it’s difficult to determine how much impact state investment funds had on the businesses or if they would have added jobs without the subsidies. That’s because businesses don’t have to show they needed money to carry out their proposals, so “it is plausible that some businesses that have received MIF funds would have expanded or increased hiring anyway,” the report noted.

These were among the concerns the legislative auditor’s office had with the program. As a result, several suggestions were given to both DEED and the Legislature for ways to improve the program’s transparency, including publicly specifying program selection criteria so businesses can determine if they qualify and how much money they could receive.

Commissioner Shawntera Hardy said DEED has made improvements to strengthen transparency and administration procedures, as well as address many of the other report recommendations. Hardy added the department is disappointed the report doesn’t highlight those improvements.

Rep. Pat Garofalo (R-Farmington), the committee chair, encouraged members to read the report, saying they’ll work with the department and put forward some ideas to make the program better.


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