Appendix d

New Job Counting Method

Why change?
There were three main reasons that prompted the Department to begin looking at ways to improve upon the process by which contract job obligations were counted and tracked: comments from businesses, observations in the State Auditor’s January 26, 2007 Special Review of the Grow Iowa Values Fund Report, and the limited number of staff available to perform the contract oversight functions compared to the large number of contracts.

Feedback from businesses
      The compliance team responsible for all post-award contract, monitoring, reporting and closeout activities was established on July 1, 2005. Since that time the Legal and Compliance staff heard concerns from businesses about IDED’s reporting requirements in their contracts. During contract negotiations the businesses repeatedly said that they were willing to provide the required reports, but the method required in the contract did not reflect the way employment data was maintained in their payroll systems. The paperwork was described as cumbersome and time-consuming.

      Input from others
      Beginning in March, 2007 the Legal and Compliance managers consulted with several award recipients, their tax, human resource and legal advisors, the Association of Business and Industry, and the State Auditor’s Office about ways to improve the job tracking and reporting process. Comments from these groups help shape the form of the new method that is now in use.

      Project volume increases, staffing level remains static
      There was a need to find a better method to count and track jobs using the resources available at the Department. Previously, project status reports were prepared semi-annually even though there was no statutory requirement for twice yearly reporting. Since the creation of the first Grow Iowa Values Fund in 2003 the Department’s volume of applications and increased dramatically. Those applications resulted in more contracts.
     
      The number of contracts and jobs to be tracked is increasing faster than contracts are closing.
      By way of illustration the facts below describe the numbers associated with the last released project status report:

  1. In the 6/30/06 Mid Year Project Status Report, the Legal and Compliance (formerly known as the Business Services Team) staff reviewed 224 active project reports to verify over 11,000 jobs and identify over $2,321,401,251 spent on projects in performance.
  2. As of January 2007, the Department had made 405 awards to projects proposing to create or retain 31,650 jobs.
  3. There were 5 project managers in Legal and Compliance at that time with each manager overseeing approximately 80 projects.
  4. Status Reports from businesses were requested and reviewed every 6 months.
  5. Project numbers continued and will continue to increase at the pace of approximately 10-15 new projects per month.
  6. Projects do not close out as quickly as they are added.
  7. Contract lengths range from 5 years to 13 years.

The numbers related to this 2007 Annual Project Status Report further illustrate the increasing volume of awards:
      As of June 30, 2007, the Department had made 441 awards to projects proposing to create or retain 23,381 jobs. Because each project typically has more than one program providing assistance to the Project, these 441 projects represent 687 contracts.