Audit says Iowa college program spent millions on failed job projects.

DES MOINES, Iowa (AP) -- State auditors say a taxpayer-funded program that pays job training costs for new companies has put millions of dollars into projects that failed.

State auditors released a report on the Iowa Industrial New Jobs Training Program, which is run by the state's community colleges.

The program has borrowed $38.5 million on behalf of businesses who promised to move to Iowa or expand their operations in the state. The audit showed that the companies either closed, went bankrupt or failed to create more than 15,000 planned jobs.

Community college officials dispute some of the findings and question their accuracy. Auditors acknowledge their findings were based on incomplete or inaccurate figures supplied by the colleges.

The audit said college officials went unchecked and took advantage of sloppy reporting and questionable transfers of money from the program into their own budgets. Auditors compared the transfers to "an additional appropriation funded by the state's general fund and local county."

Tom Wynes, chancellor at Iowa Valley Community College in Marshalltown, said the job training program is the state's best recruiting tool for new businesses. The program was cited as a key selling point in IBM's decision to create 1,300 high-tech jobs in Dubuque.

"We look forward to working with the Iowa Department of Economic Development, the state auditor and others to enhance and build on this very successful program," said Wynes, who lobbies for the state's 15 community college presidents.

He described the program's 228 failed business projects as a small fraction of all projects. The audit showed they represent 19 percent of the program's 1,182 projects since 1983.

The job training program was created in the early 1980s as an incentive to lure companies to Iowa during a recession.

College officials borrow money on behalf of the businesses, which pay the money back through higher property taxes or diverting a share of taxes on their new employees' wages from the state in the form of a new jobs credit.

State auditors said nobody evaluates the program's success or holds its leaders accountable. The audit identified widespread reporting errors and missing details, such as descriptions of job training and the median wages of new employees. The college also failed to report that at least 41 businesses had defaulted on their agreements.

"There is no way to determine what the state is getting for its money," the audit said.

BACKGROUND

The job training program was created as an incentive to lure businesses to Iowa during the recession of the late 1980s.