A long-standing, federally funded Ohio manufacturing program that provides job training and technology support to companies could be shut down for good if federal officials follow recommendations in a new audit. This was reported by Qazaqyia.kz citing Associated Press.
In an audit released this week, the U.S. Department of Commerce's Office of Inspector General faulted Ohio for poor oversight of $20.9 million it received over a decade through the Manufacturing Extension Partnership. The report identifies a mix of waste and abuse, including what it said was unauthorized spending, as well as self-dealing by board members of the six local affiliates that received the federal money, which is passed through by the state.
The report specifically faults the Ohio Department of Development's oversight, as well as actions by local affiliates, including the Manufacturing Advocacy and Growth Network in Cleveland and Ohio State University South Centers in Piketon. The audit recommends that the U.S. National Institute of Standards and Technology, which oversees the federal partnership, consider terminating Ohio's funding permanently and try to recoup the money.
"Receipt of federal financial assistance is a privilege. This audit, as well as our prior work, demonstrates that the Ohio MEP Center failed to uphold its financial and ethical obligations, resulting in inadequate oversight and mismanagement of public funds," the audit says.
The new audit, which covers program spending from 2017 through 2024, contains many of the same details that were privately shared with state and federal officials last fall. Officials have been waiting for the audit to be completed since then. The federal government responded to the audit's preliminary findings by abruptly pausing in December the millions of dollars in MEP funding Ohio receives. This triggered complaints from elected officials, who support the affiliates as vital training centers. Also, as a result of losing money, several affiliates announced plans to close. Before it was suspended, the state's funding was set to expire regardless at the end of next month.
In its written response to an earlier draft version of the audit report in July, NIST said it's considering all the report's recommendations, including whether to terminate the program. The institute was contacted for comment but did not respond before publication. MAGNET CEO Ethan Karp provided a lengthy statement contesting the audit's findings. The statement said the agency didn't get a chance to review the report before its release, and found instances of what it said were inaccuracies that he said "create a false and unfair picture of MAGNET." "We are reviewing every claim and will have much more to say," the statement said.
Mason Waldvogel, a spokesman for the Ohio Department of Development, which administers the federal money, said in a statement that the state has "zero tolerance for fraud, waste and abuse" and has been cooperating with the audit. "(ODOD) will continue to work with NIST to address the report's recommendations, including reviewing and, where necessary, revising financial reports to ensure they are current, accurate and complete," Waldvogel said. "We will also continue to review and strengthen our oversight of the programs we administer, including our processes for monitoring subrecipients and verifying financial and performance information."
The final audit contains some of the same details that were previously shared with state and federal officials and reported by Signal Statewide in February. This includes $2.3 million that Ohio's MEP affiliates spent on what federal auditors described as unnecessary spending on events, marketing, sponsorships and similar costs. Among these charges were $62,954 that Ohio State University South Centers spent on promotional T-shirts, and nearly $100,000 that MAGNET spent on two events, a conference and a groundbreaking ceremony for a new building.