State of New Hampshire – Community Development Finance Authority

Source: State of New Hampshire, Office of Legislative Budget Assistant, Performance Audit Report, January 2014

We found the Community Development Finance Authority’s (CDFA) management controls needed to be improved to provide reasonable assurance awards were made or denied consistent with statute and rule. The CDFA’s purpose is to increase development projects, provide capital to business ventures, and stimulate private investment in areas where primary employment was threatened and housing was inadequate. Its adopted mission statement was not fully aligned with these priorities. As a result, we found a number of Community Development Investment Program (CDIP) projects approved during the audit period appeared to deviate from the CDFA’s original purpose. Many approved projects we reviewed did not conform or did not clearly conform to other statutory provisions. Further, the CDFA lacked clear operating definitions of key terms which were integral to its goals and objectives for the CDIP program and could have helped prioritize awards. Project outcomes were not tracked, limiting measurement of mission accomplishment and making it impossible to determine whether the projects the CDFA funded had the intended effect. …

… We also found the CDFA purchased commercial real estate without clear authority and committed public funds to support the limited liability company it created. In addition, the CDFA’s conflict of interest and recusal polices should be improved to ensure those who may have had a conflict of interest could not influence decisions. Policy allowed recused Board of Directors and Community Development Advisory Committee members to discuss, ask questions, and answer questions about a project. The CDFA also inconsistently conformed to laws generally applicable to State agencies and needed to improve management controls in several areas. Many of these conditions can be attributed to the CDFA’s interpretation of its purpose and its authority as a nonprofit corporation…