Stacey E. Pickering
Mississippi State Auditor
September 30, 2015

MDA Global Recruitment Team
 Domestic and overseas companies
 Helps identify and secure buildings and site locations
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MDA Asset Development Team
 Helps MS communities capitalize on existing resources
 Helps communities plan for future opportunities
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MDA Marketing Team
 Promotes investment and job creation
 Provides public relations and marketing/advertising
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Know the possibilities
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Develop compatibility models
Understanding demographics, workforce capabilities
Industry experts
Examine Risks
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor

Preliminary projects = code words
 Site selection, confidential agreements, teamwork state
and local level

Highly competitive
 Can be lost by leaks
 May take months

Developed projects brought to Legislature
 Preliminary agreements on incentives, obligations,
commitments
 Legislature, then Governor approves
THEN…
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor

MDA Contract Agreement
 Details amongst all parties (company, state, local, etc.)
 Multiple incentive programs defined
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State Bond Commission Issues Bonds
 Governor, Treasurer, Attorney General
 Sells the bonds to finance the project
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Department of Revenue
 Approves/verifies MDA tax incentive agreements

Auditor
 Old “project” auditing process
 New “program/project” process
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor


Since 2000, OSA has monitored
more than 2o projects
Currently, still 13 projects active
 $990,900,000 of taxpayer funds
 Recently, 2 projects paid audit
related penalties of $409,866

New authority (July 1, 2014)
 Enhanced program auditing
 Includes other MDA economic
development program areas

Projects Currently
Monitored by OSA:
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Nissan
Howard Industries
American Eurocopter
Viking Range
Baxter Healthcare
Pharma Pac
IMS (Integrated
Management Services)
Severstal
Cooper Tire and Rubber
Toyota
PACCAR
Ingalls
Schulz XTruded
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor

Advantage Jobs

 “Super Project” tax incentives
 31 projects


Existing Industry Productivity
Loan Program
 $50.5 million since FY 2009
 15 projects

 “$13.3 million since FY 2010
 32 projects
ACE Fund
 $47.45 million since FY 2009
 40 projects
MS Industry Incentive
Revolving Loan Fund
Development Infrastructure
Program (DIP)

Job Protection Act
 $12 million since FY 2009
 30 projects

10+ Other Programs, including
 Rural Impact
 Small Municipalities, Limited
Population Counties
 Workforce Training funds
 $293 of $468 million bonds
issued, 10 projects since FY 2010
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor

The State Bond Commission does not know how smaller
bond issuances will be spent
 Bonds are sold prior to MDA award
 Generally for programs of less than $10 million
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Smaller projects have a much higher risk of failure and less
due diligence conducted by MDA generally

Many weak contracts
 Few taxpayer protections
 Lack of job maintenance requirements
 Inconsistent contracts between projects

Little or no follow-up oversight by MDA after award
 Failure to conduct site visits
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor

Failures by MDA to
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establish and adhere to verification procedures/deadlines
provide procedures for private entity reporting according to MOUs
require recipients to collect and maintain auditable data
request certification of compliance to validate employment numbers
clearly define full-time and part-time jobs and job maintenance
monitor MOU requirements to be able to identify problems
request payment for non-compliance
Outside of MMEIA, other programs account for more than
$480 million since FY 2009
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor
Economic Development is the lifeblood of our State:
 Maintaining and strengthening the businesses and
industries we already have
 Bringing in new businesses and industries
 Building and maintaining a highly skilled workforce
Through audits and education, OSA is working to improve
MDA practices so they can better protect taxpayer funds
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor
Mississippi’s Population By Generation
900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Total
Baby Boomers
Generation X
New Boomers
(1946-1964)
(1965-1982)
(1983-1996)
676,455
771,487
499,823
Stacey
Stacey
E. Pickering
E. Pickering
Source: U.S. Census, 2010
Mississippi
State Auditor
Mississippi
State Auditor
United States Generational Snapshot
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor
Federal Spending & U.S. Revenue Trends
Republican President
Democrat President
Revenues
$3.5
$3.0
$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
1912 1922 1932 1942 1952 1962 1972 1982 1992 2002 2012
Sources: Office of Management & Budget, Historical Tables; Bureau of Labor Statistics; Congressional Budget Office, Long-Term Budget Outlook,
June 2012. Compiled by TCAII
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor
14
Federal Public Debt
250
200
CBO Alternative Projection
150
100
50
0
Source: CBO, Long Term Budget Outlook, 2009 and 2013
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor
Sovereign Fiscal Responsibility Index
(As of April 2012)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
Australia
Sweden
Estonia
New Zealand
China
Chile
Luxembourg
Denmark
Brazil
India
United Kingdom
Israel
Canada
Poland
Netherlands
Korea
Slovakia
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
Mexico
Austria
Norway
France
Finland
Slovenia
Germany
Belgium
Spain
Italy
28. United States
29.
30.
31.
32.
33.
34.
Hungary
Iceland
Ireland
Portugal
Japan
Greece
Stacey
Stacey
E. Pickering
E. Pickering
Source: Comeback America and Stanford Graduate Students’ Sovereign Fiscal Responsibility Index.
Compiled by TCAII. Note: Based upon IMF data that was reported in April 2012.
Mississippi
State Auditor
Mississippi
State Auditor
Stacey E. Pickering
Mississippi State Auditor
P.O. Box 956
Jackson, MS 39205
Ph: 601-576-2800
800-321-1275 (statewide)
Web: www.osa.ms.gov
Twitter: @StaceyPickering
Stacey
Stacey
E. Pickering
E. Pickering
Mississippi
State Auditor
Mississippi
State Auditor