DiNapoli: ESDC needs better oversight of foreign offices

The Empire State Development Corp. (ESDC) needs to set “clear performance standards” to determine if its remaining four offices are boosting the New York economy through overseas business and investment.

That’s according to an audit New York State Comptroller Thomas DiNapoli released today.

ESDC contracts with representatives who operate offices in foreign countries to provide services that help New York businesses develop or expand export sales and attract foreign investments, DiNapoli’s office said in a news release.

Between April 1, 2010 and March 31, 2012, ESDC paid $2.7 million to seven foreign representatives for costs associated with operating 10 international offices, the state comptroller said.

Due to budget constraints, ESDC recently closed its international offices in Mexico, Turkey, and China, along with offices in Australia, Brazil, and Chile that were operated through the Council of Great Lakes Governors.

ESDC currently has foreign representatives in the United Kingdom, Canada, Israel and South Africa.

Expanding business opportunities in foreign countries can benefit New York companies, but, with “tight” budgets, ESDC must spend its money “to pack an economic punch,” DiNapoli said in the release.

“Improvements and greater consistency in monitoring how taxpayers’ dollars are spent is needed. You can’t measure improvement if you don’t track how you’re doing. Having significantly downsized its international presence, ESDC should now be able to focus its resources on more effectively overseeing and monitoring efforts to generate economic benefits with these offices,” DiNapoli said.

DiNapoli’s auditors found that ESDC’s performance reporting and monitoring efforts were “informal and ad-hoc,” his office said.

Although ESDC provided auditors with some information about specific international trade and investment successes, the information only spanned the most recent year.

In addition, the information included data on performance results not mentioned in the contract requirements and appeared to have been created solely in response to auditors’ requests, DiNapoli’s office said.

In the audit, DiNapoli recommends ESDC monitor the performance of foreign representatives to ensure that international offices are meeting contract requirements and are operating in a manner that benefits the state’s economy.

The state comptroller also recommends the agency ensure that foreign representatives are only reimbursed for “actual and necessary” expenses incurred in the operation of international offices, according to the audit.

ESDC officials generally agreed with the audit’s findings and have begun implementing a new system designed to assist in data collection and reporting on international trade and investment attraction activities, DiNapoli’s office said.

Contact Reinhardt at ereinhardt@cnybj.com