Audit of the Massachusetts Office of International Trade and Investment

This is a state performance audit of the Massachusetts Office of International Trade and Investment, covering September 30, 2018 through June 30, 2021.

“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 International Trade and Investment (MOITI) for the period September 30, 2018 through June 30, 2021.”

Auditors checked whether MOITI followed rules for STEP grants, including who got funding, what costs were reimbursed, what information was collected, and whether businesses were moved out of the program after enough support.

“In this performance audit, we determined whether MOITI graduated small businesses from the State Trade Expansion Program (STEP), whether it collected required information from small businesses to which it awarded funding through STEP, whether it ensured that the financial assistance awards it gave to small businesses were only for allowable activities, whether these activities were supported by adequate documentation, and whether the small businesses that were given financial assistance awards provided the required cash match.”

If MOITI does not track applicant information correctly, it cannot fully tell whether STEP is reaching underserved small business communities.

“As a result, MOITI’s ability to evaluate the effectiveness of its efforts to promote STEP to USBCs is limited.”

For residents and small business owners, the issue is whether public grant money is being managed fairly and whether new small businesses get a real chance to benefit.

“Further, implementing graduation requirements would create opportunities for new small businesses to receive financial assistance awards.”

MOITI said it would update its application, train staff, review records, and create a plan for transitioning businesses out of STEP starting with fiscal year 2023 STEP 11.

“MOITI will implement a STEP Transition Plan, per the audit recommendation starting with FY 2023 STEP 11 (the FY 2022 STEP 10 proposal has already been submitted to the SBA).”

The stakes include future federal funding, because poor administration could hurt MOITI’s ability to get STEP money from the SBA later.

“Not effectively administering STEP could negatively affect MOITI’s ability to secure future STEP funding from SBA.”

STEP is a grant program meant to help small businesses pay some costs of entering or expanding into international markets.

“STEP helps small businesses overcome obstacles to exporting by providing grants to cover costs associated with entering and expanding into international markets.”