Montgomery County’s inspector general is planning to investigate a county fund designed to retain or create jobs — the same fund connected to the resignation of the former Department of Economic Development director.
Inspector General Thomas Dagley said the “preliminary review” of the Economic Development Fund was not prompted by any allegations of wrongdoing but was a continuation of his office’s review of the financial reporting of various county programs.
Former Director Pradeep Ganguly resigned following the disclosure that his department had awarded a $25,000 loan from the Economic Development Fund to a company where his son worked, according to published accounts. Ganguly has denied any wrongdoing.
County Executive Ike Leggett said the fund has played an important role in helping the county’s economy. In 2008, the fund provided $1.1 million to 28 businesses, resulting in “the retention, creation or projected creation of more than 600 jobs in the county,” Leggett wrote in a memo to the County Council last month.
His proposed budget calls for keeping spending for the fund level at $852,440 next fiscal year.
Among other budget information requested, Dagley has asked Chief Administrative Officer Timothy Firestine for the criteria the county uses to measure job growth.
Dagley’s review of the fund and its effect is not the first time it has come under scrutiny.
Earlier this year, a report from the county’s Office of Legislative Oversight recommended the County Council “pursue a more detailed review” of the fund. The report also cautioned council members to be skeptical of results touted by economic development programs in general, including the fund.
“It is difficult to distinguish between a change caused by the economic development program itself versus change caused by external factors, such as business cycles, tax policies or natural firm growth,” the report said.
But Firestine disputes those findings, and said the county can “clearly identify a strong cause-and-effect relationship between the financial incentives provided through the Economic Development Fund and the number of jobs created or retained, capital investment made, and square footage of commercial space occupied.”
