A new report by the Office of the Inspector General for the Appalachian Regional Commission shows that a loan fund administered by the Chautauqua County Industrial Development Agency has been mismanaged.
The review by Inspector General Hubert N. Sparks was done at the request of Assemblyman William Parment, D-North Harmony, after County Executive Andrew Goodell cited the Chautauqua Revolving Loan Fund as an example of good management.
Sparks' review shows that the loan fund has made $5.1 million in loans, with a 12 percent loss rate, and now has $826,000 remaining. But he also noted: "We cannot attest to the complete accuracy of all information due to the unavailability of original records."
Goodell had listed the total loan amount at $4.4 million, and he said the default rate was closer to 3 percent.
Among the problems Sparks found were unauthorized loans over the $50,000 limit, loans made to not-for-profit entities, loans made at interest rates below CCIDA guidelines and the absence of credit reports and guarantees.
Parment on Monday called the report "shocking."
"This loan fund was not well-managed," he said. "The county executive was involved in its management, and it seems very clear to me that he has misled the public. The inspector general's own report says they can't be certain of the numbers because records are missing and that indicates it has not been well-managed."
No loans have been made from the loan fund since 1995, when Sparks said "corrective actions had been initiated on deficiencies identified in prior ARC reports."
The assemblyman, who was instrumental in regaining state funds to rebuild the depleted Al Tech Trust Fund, said problems with the two funds indicate that changes are needed in the county IDA.
"I don't see how the county executive can claim that the fund is being well-managed when it hasn't been managed at all," Parment said. "No new loans have been made, and the records show some serious problems."
Parment added: "The county executive has been directly involved in the management of the IDA. He selects the director and appoints the majority of the board members. He has basically directed the operations of the IDA for eight years, and it seems to me that he has failed in his responsibility to make the IDA accountable to the public and to correct the management problems."
Goodell could not be reached to comment on the report.