Audit of the Massachusetts Office of Business Development (July 2, 2024)

This is a state performance audit of the Massachusetts Office of Business Development, covering work from November 1, 2020 through June 30, 2022.

“In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of the Massachusetts Office of Business Development (MOBD) for the period November 1, 2020 through June 30, 2022.”

Auditors checked whether the office encouraged certain underrepresented business owners to apply for tax-credit programs, tracked related diversity information, collected required hiring-policy documents from awardees, and made employees complete cybersecurity training.

“The purpose of our audit was to determine the following:”

The office set a public goal to encourage businesses owned by people in minority groups, women, veterans, and people with disabilities to seek tax credits, but without tracking it could not show whether that goal was being met.

“If MOBD does not have documented procedures that outline how to track diversity-related metrics regarding its program applicants and therefore does not track diversity-related metrics, then it cannot monitor its progress in meeting its goal to encourage businesses owned by people within minority groups, women, veterans, and people with disabilities to apply for its EDIP and MVSP tax credits.”

For ordinary residents and business owners, this matters because these programs can support jobs, business growth, investment, and downtown storefront activity in Massachusetts communities.

“The Economic Development Incentive Program (EDIP) is designed to foster job creation and stimulate business growth.”

The office met the requirement to collect equal opportunity or affirmative action statements from EDIP awardees, but fell short on diversity-metric procedures and full cybersecurity training compliance.

“We noted no exceptions in our testing; therefore, we determined that, during the audit period, MOBD ensured that all EDIP awardees submitted an equal opportunity employment / affirmative action statement or plan.”

Auditors recommended that the office get approval to collect diversity-related information, create procedures to track outreach and metrics, work with the Supplier Diversity Office, and make sure every employee completes annual cybersecurity training.

“MOBD should ensure that all of its employees complete annual cybersecurity awareness training.”

The audit is significant because the office publicly said it wanted to improve access for diverse business owners, but auditors found it had not built the basic tracking needed to measure progress.

“We also consider it to be a best practice for agencies to track progress toward goals they have set, so they can support improvement in areas that are deemed important enough to establish goals to improve.”

EDIP and MVSP are tax-credit programs: one supports job creation and business growth, and the other supports businesses moving into vacant storefronts in approved districts.

“The MVSP makes tax credits available to businesses proposing to move into a vacant storefront4 located in an EACC-certified vacant storefront district.”