Audit of the Massachusetts Growth Capital Corporation

This is a state performance audit of Massachusetts Growth Capital Corporation, a quasi-public agency that helps small businesses with financing and support.

“In this performance audit, we examined MGCC’s administration of its small business financing and diversity program.”

The audit checked whether MGCC followed its legal authority when running small-business loans and technical-assistance grants, and whether it reported its results accurately.

“Did MGCC administer its small business financing and diversity program in accordance with its enabling legislation, Chapter 40W of the General Laws?”

The public, policymakers, and businesses rely on MGCC’s reported numbers to judge whether its programs are working, so inaccurate figures can mislead people and hurt trust.

“Presenting inaccurate data may also harm the organization’s credibility, which could discourage some people from using its services.”

If you live in Massachusetts, this matters because MGCC uses public support to help small businesses, including in distressed communities, and the audit pushes for more reliable reporting and planning.

“To accomplish its mission, MGCC works with local banks and lending institutions, community development corporations, and other nonprofit organizations to finance projects that will produce jobs in economically distressed communities throughout the Commonwealth.”

MGCC was found to have complied with the law for its loan and grant programs, but not for accurately summarizing and reporting performance and outcome data.

“accurately summarize performance and outcome data and prepare accurate reports of the services it provided”

The auditor recommended written procedures, better monitoring, annual risk reviews, a business continuity plan, and disaster recovery testing; MGCC said it was taking steps to address these issues.

“MGCC should develop written policies and procedures as well as monitoring controls to ensure that its performance and outcome data are accurate.”

The audit did not say MGCC’s core mission was invalid; it said the agency needed better accuracy and stronger planning so its work can be measured and trusted.

“The integrity of performance and outcome data is critical to evaluating the success of MGCC’s lending programs.”

“Internal controls” means the policies, procedures, checks, and planning an organization uses to avoid mistakes, manage risks, and keep operations running during problems.

“MGCC should perform an annual entity-wide risk assessment and then develop and document controls (i.e., policies and procedures) to mitigate identified risks.”