Last licks on the auditor's PDC report
Before taking the Portland city auditor's report on the Portland Development Commission off my desk, there are just a couple of additional passages that deserve a few words. I've alluded to the point made by these passages before -- that the PDC either doesn't know whether its programs are actually any good, or isn't telling what it does know about that. And some of the "data" it is passing off about its "accomplishments" is suspect at best.
In particular, the report found fault in this regard with the PDC's Economic Development Department. It noted:
During fieldwork, we determined that we could not fully assess the efficiency of the Department's strategies, such as cost per job created, due to difficulty in obtaining financial information on a refined program basis and the lack of readily available actual jobs created and retained data in most programs....The report goes on to conclude that the PDC badly needs to improve its weak performance measurement and spotty data collection. We agree. PDC's total spending for fiscal 2006 is estimated at $248 million. Portland's population is about 554,000. Thus, the PDC spent around $450 this year for every man, woman, and child in the city. I don't know how others feel, but the Bogdanski household would like to know whether our $1800 a year is being spent wisely, or whether it's just being poured into condo developer pockets and other rat holes.
Data for some reported measures is unreliable: We reviewed 30 out of 152 total Business Finance and E Zone participant files. We traced data on projected loan leverage, projected jobs, loan commitment amounts and QJP average wages. Data for projected loan leverage, loan commitments, and projected jobs did not match source documents, such as Enterprise Zone precertification and loan application reports, in over half of the cases. This is important because data from the ACT! database is used to generate reports to the Commission and the public. We found data for E Zone leverage and loan commitment amounts reliable when checked against source documents.
In addition, we also learned through interviews that some of the jobs created/retained that were attributed to efforts of the Business Retention and Expansion program and entered into the database were based on the best judgment of staff. While these estimates may be reasonable, the data lacked any source documents to support the estimates.
Some published performance data are estimates, not "actual" performance results and their current labeling may mislead readers: We found that some performance measure data presented in Department reports and the Commission budget document were not clear in terms of what the data represented. Two prominent measures the Department routinely reports, for example, are the investment leveraged as a result of business finance loans and the number of jobs created or retained. PDC staff indicated, and we found this published data to be based on initial project estimates, and not on actual program results. This was not clearly disclosed in the documents we reviewed and would likely mislead readers. The absence of actual performance data for comparison to projections hinders the ability of decision makers to make meaningful program assessments....
[T]he number of jobs reported by the Economic Development Department as "created" or "retained" are jobs projected to be established or retained by the business at the time of PDC funding. Because "jobs created" and "jobs retained" are not actual counts of jobs at each business, we could not conclude that the number of jobs reported as created by PDC-funded businesses had been realized. Additionally, we found that the Economic Development Department's reporting of funds leveraged from its Economic Development loans and enterprize zone participation is based on the investment that is projected by the business recipient. Additionally, updates to investment records for business loans were not supported by source documents; consequently it was unclear to us why updates occurred.