by Tina Reed
Ann Arbor economic development group Spark has made a number of accounting and procedure changes since an audit contracted by the Local Development Finance Authority found billing inconsistencies last year.
Now the LDFA plans to have the auditor take another look at Spark and the changes it made midway through its fiscal year, members decided at a Tuesday meeting.
The LDFA is a Ann Arbor City Council-appointed committee that oversees the capture of part of the property taxes from Ann Arbor's downtown development district. It gives some of that revenue to Spark and is responsible for overseeing how Spark spends it.
Last year, the LDFA contracted with an outside auditor to look at Spark's accounting practices. The audit found accounting problems that led to overbilling and underbilling due to geographic ineligibility. It also found conflicts of interest during its 2008 fiscal year.
The LDFA's contract with Spark was for $872,836 during the audited 2007-08 year.
The changes Spark has made include:
• Stricter reporting deadlines for all of its billing, such as requiring all consultant invoices to be turned in to Spark by the fifth of every month.
• Stricter review of companies receiving Spark's more advanced services to determine geographic eligibility.
• An updated conflict of interest policy to restrict the use of related parties, such as family members, for consulting services.
Skip Simms, executive director of Spark's Business Accelerator, expressed frustration with the contract between the LFDA and Spark in recent months. Some of the guidelines in the contract make it difficult to practically perform all the services Spark would like to provide for clients, Simms said.
"Quite honestly," he said, "what we've had to do is cut back on what we've been able to offer entrepreneurs" since the contract regarding how Spark can use LDFA funds was rewritten two years ago.
At the meeting, Simms asked the board to clarify whether Spark could use funds on services that aren't easily billed at an hourly rate, which is traditionally how the LDFA keeps track of Spark's services.
LDFA members said they would review the contract.
source : Mlive.com
