UPDATE 6:05 p.m. EDT: Lucy Nashed, Perry's press secretary, released the following statement about the audit:
"The Texas Enterprise Fund is a critical deal-closing tool that has helped attract businesses to Texas that have in turn created thousands of jobs and billions of dollars in capital investment, and the Legislature has continued to recognize its value by reauthorizing it every session since it was created. This audit confirms that funds awarded through the program have been allocated in accordance with state law. Administrative processes and procedures are regularly reviewed and updated as necessary to ensure effective, efficient and responsible distribution and oversight of all TEF awards."
Texas Gov. Rick Perry doled out $220 million from a state job fund to recipients who didn’t submit an application or promise to use the money to create jobs as required by law, a state audit found Thursday. Texas State Auditor John Keel suggested Perry’s office “should strengthen its control structure for its administration” of the fund in light of the report.
“The absence of an adequate control structure impaired the [governor’s] office's ability to consistently administer the awarding, award agreement establishment, monitoring and award agreement termination, and reporting functions for the Texas Enterprise Fund,” Keel wrote. The audit, which came about as a result of legislation sponsored by Wendy Davis, a Texas state senator and Democratic gubernatorial candidate, covered a 10-year period from September 2003 to August 2013.
“Recipients of Texas Enterprise Fund awards reported that they had created 48,317 direct jobs as of December 31, 2012. However, as a result of the control weaknesses identified during this audit, it was not always possible to determine whether award decisions were supported, or to determine the number of jobs that recipients of awards from the Texas Enterprise Fund have created,” Keel said.
The fund was supposed to give money to job creators who were in competition with another entity from outside the state. Its purpose was to incentivize companies considering leaving Texas to remain in the state.
“However, auditors were unable to verify applicants' assertions regarding competition outside of Texas because sufficient information to perform that verification was not usually available,” Keel said.
More than $500 million was distributed to job creators through the fund, which has come under criticism as being a vehicle for Perry to reward projects he favored. However, Keel said the fund has already taken his office’s recommendations into account.
“While there were control weaknesses in the Office of the Governor's administration of the Texas Enterprise Fund from September 2003 through August 2013 (the scope of this audit), the Office made all disbursements auditors tested after the effective dates of the associated Texas Enterprise Fund award agreements,” he said. “ In addition, it safeguarded state resources by ensuring that it disbursed funds only to recipients with award agreements.”
The audit was released a month after Perry was indicted on abuse of power charges stemming from threat to withhold funds from Texas' Public Integrity Unit if Travis County District Attorney Rosemary Lehmberg didn't resign from her post after the Democrat was convicted of drunk driving charges. Perry has denied the charges, and has even fundraised off of the legal matter.