Director's Office — LEGAL AND COMPLIANCE

Promoting Accountable, Transparent and
Understandable Contract Management

About Legal and Compliance
The Legal and Compliance team was established on July 1, 2005.  Legal and Compliance is part of the Director’s office, reporting to the General Counsel.  The compliance team is responsible for all post award activities for the Department’s job creation programs, Innovation and Commercialization Division programs and Renewable Fuel Infrastructure Programs.  Oversight and contract administration duties include generating all post award correspondence, drafting and negotiating contracts, verifying compliance with contract conditions, ensuring proper disbursement of funds, conducting onsite monitoring and negotiating loan restructuring or settlement.

The General Counsel provides legal advice to the Department’s four divisions, the Director’s office, and approximately ten boards, committees and commissions associated with the agency. Other legal services provided include managing the Directors’ Office nine-person compliance team, supervising all Department rulemaking and providing legal and compliance services to the Office of Energy Independence for the Power Fund contracts.

As of 6/30/09, the Legal and Compliance total contract portfolio consisted of 1,222 awards for the following programs:

636	Business finance/Iowa Values Fund awards, totaling $204 Million direct financing and $938 Million estimated tax credit benefits.
335	Innovation and Commercialization awards, totaling $9.1 Million direct financing.
251	Renewable Fuel Infrastructure Program awards, totaling $7.6 Million direct financing.

Accountable
Legal and Compliance staff report monthly to the Iowa Economic Development Board and its Due Diligence Committee regarding significant developments with funded projects, the progress of contractually obligating recent awards within the Board required 120 day deadline and to make recommendations regarding amendments, closeouts, and negotiated loan restructuring or settlement.

The Legal and Compliance team has worked with award recipients, tax professionals, human resource specialists, legal advisors, business associations and the State Auditor’s Office to develop and implement a job tracking system that is consistent, business friendly and verifiable.  This system ensures that all state assisted jobs are paying at or above the Qualifying Wage Thresholds.  You can be sure that each job counted towards contract compliance has been verified using company payrolls, and that the company payrolls are sampled and compared to on-site employee files to ensure authenticity at Project Completion and at Project Closure.  Extra jobs reported in excess of contract requirements are listed separately in this Report.  Extra jobs are not used to meet contractual obligations, but are part of the overall employment at the Project location.  For this year’s Report Legal and Compliance staff analyzed almost 400 Annual Project Status Reports and the corresponding payroll records to verify the 22,934 reported jobs.

The Legal and Compliance Team works to ensure that Projects not meeting their contractual obligations return the appropriate amount of funding back to the Department plus a penalty interest.  If the Legal and Compliance Team is unable to collect payment, the Project and the outstanding amounts are passed on to our Collections Team.

Transparent
Legal and Compliance is responsible for the preparation of the Contract Compliance Report on Iowa Values Fund and Business Financial Assistance portion of this 2009 IDED Annual Report.

Legal and Compliance designed and implemented the Department’s first and only online, searchable database.  This interactive annual report allows you to search for individual awards to view a comprehensive summary detailing each Project’s progress.  We have found that making this information readily available has been a useful tool for businesses, legislators, professional economic development organizations, media and the general public.

This Report has a detailed description of the reporting process and protocols used to arrive at the numbers. For example, because a Project usually has more than one program funding source, it is necessary to choose one of the programs as a lead source for purposes of reporting job and wage numbers.  The job and wage numbers reported for a Project are the numbers corresponding with the funding source that has the highest Qualifying Wage Threshold.

Understandable
In an effort to more clearly communicate whether companies are meeting or not meeting their contract job, wage and total project cost obligations; the Report compares contract obligations to contract performance. This more easily allows the public to determine how each individual contract is performing and if the State is on target to reach the number of jobs for which it contracted.

Reporting on activity associated with 10 programs with four different Qualifying Wage Thresholds and varying Project Completion period and Maintenance period requirements is challenging.  Beginning on June 15, 2007, standardized terminology was established to make it easier to understand the data found in the Report. On June 15, 2007, IDED adopted consolidated administrative rules for these programs and established standardized terms that apply to all programs in this Report.

Contact Us

melanie.johnson@iowa.gov

michael.johansen@iowa.gov