Audit Objective
Did the Auburn Industrial Development Authority (AIDA) Board and officials properly approve and monitor projects?
Audit Period
January 1, 2023 – February 3, 2025
Understanding the Program
Industrial Development Agencies (IDAs) are established to provide financial assistance to businesses to encourage various types of economic development projects.
The AIDA Board (Board) is responsible for the general management and control of AIDA, including project approval and monitoring. An Interim Executive Director is responsible for AIDA’s day-to-day operations.
For 2023, AIDA reported 16 active projects with project costs totaling $102 million to the New York State Authorities Budget Office, including one active bond and 15 active Payments in Lieu of Taxes (PILOT) agreements. AIDA also had approximately $1.3 million in expenditures, including distributions of $1.27 million for 14 PILOTs.
Audit Summary
The Board and AIDA officials did not properly approve and monitor projects. The Board and AIDA officials did not review all supplemental documentation for project approval or properly monitor the 16 active projects.
AIDA officials did not require project owners to submit supporting documentation for capital investment and job data with applications and ensure project owners submitted the required annual reporting form and supporting documentation (NY-45 forms) needed to monitor project goals, including job retention and creation. In addition, AIDA officials did not conduct policy-required site visits in 2023 and 2024. As a result, the Board and AIDA officials did not adequately monitor job creation and retention and did not determine the reasons for all of the variances between 2023 year-end jobs and project goals or document their assessments. They also did not pursue recapture of sales and use taxes or termination of PILOTs and other financial assistance when goals were not met. The Board and AIDA officials also did not properly monitor PILOTs, totaling $1.27 million in 2023 and $1 million in 2024, which resulted in late distributions to affected taxing jurisdictions in 2023.
Without the appropriate required reporting form and supporting documentation from the project owners, the Board cannot help ensure AIDA’s mission to advance the job opportunities, general prosperity, sustainability and economic welfare of the taxpayers is achieved. The Board also cannot ensure the reasonableness of the project owner’s self-reported information. Furthermore, without site visits, AIDA officials have less assurance that capital investments and the jobs being reported are accurate and reasonable. In addition, issues with PILOT distributions may cause officials and the public to have an unfavorable view of future AIDA projects and PILOT agreements.
The report includes five recommendations that, if implemented, will improve AIDA’s project approval and monitoring practices. AIDA officials agreed with our findings and recommendations and indicated they have initiated corrective action.
We conducted this audit pursuant to Article X, Section 5 of the State Constitution and the State Comptroller’s authority as set forth in Article 3 of the New York State General Municipal Law. Our methodology and standards are included in Appendix C.
The Board has the responsibility to initiate corrective action. A written corrective action plan (CAP) that addresses the findings and recommendations in this report should be prepared and provided to our office within 90 days, pursuant to Section 35 of the New York State General Municipal Law. For more information on preparing and filing your CAP, please refer to our brochure, Responding to an OSC Audit Report, which you received with the draft audit report. We encourage the Board to make the CAP available for public review in AIDA’s offices.