Audit Report 2014-9 Business and Economic Development - Job Creation and Job Retention Agreements - Haynes Corporation
Internal Audit Department
Audit Report 201 4 -9
Business and Economic Development
Job Creation and Job Retention
Agreements: Hay ne s C o r p ora tion
Dwight E. Brock
Clerk of the Circuit Court
3299 Tamiami Trail East
Suite #402
Naples, FL 34112 -5746
www.collierclerk.com
Issued: June 18 , 201 4
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Prepared by: James D. Molenaar, Internal Audit Manager
Pat rick Blaney, Senior Internal Auditor
Report Distribution: Board of County Commissioners
Leo Ochs, Jr., County Manager
Bruce Register, Director, Busin e ss & Economic Development
Amy Patterson, Manager, Impact Fee s & Economic Development
Cc: Dwight E. Brock, Clerk of the Circuit Court
Crystal K. Kinzel, Director of Finance & I nt er n al Audit
Table of Contents
Summary ……………………………………………………………………...………………..………2
Objective……………………………………………………………………...………………..………2
Scope ……………………………………………………………………………………...……………2
Background …………………………………………………………...………………………………..3
Ma n agement Re s p on se.………………………………………………………………………….……..3
Conclusion ……………………………………………………………………………………….……..3
Workpapers supporting the observations noted within this report are public record and can be made av ailable
upon request once the final audit report has been issued. T he files and draft versions of audit reports remain
confidential and protected from public records requests during an active audit under Nicolai v. Baldw in (Aug.
28, 1998 DCA of FL, 5 th District) and Section 119.0713 , Florida Statutes .
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Internal Audit provided draft Audit Report 2014 -9 to the Business and Economic Development Director and the
Impact Fee Manager for management response on May 27 , 2014 . The Business and Economic Development
Director provided the management response on June 4 , 2014 .
Summary
Th is rev i ew generated the following observations for Collier County’s Job Creation and Job Retention Incentive
A gr ee m ents with Haynes Corporation :
Haynes Corporation was visited to examine employee records.
Payroll and personnel records were reviewed for Job Cr e ation eligibility . N ames, hire dates, job titles, and
w a g es were n o t ed f or all employees in created jobs . W a g es were averaged for all jobs created, and compared to
the requirements of the Job Creation Incentive A greement .
The original 37 retained employee s who were validated in 2011 were compared to Haynes’ employee census as
of July 31 , 20 13. Twenty -six original employees remained, and eleven replacements were selected. For those
eleven, p ersonnel records were reviewed for Job Retention eligibility. Per the terms of the agreement, n ames,
hire dates, and employment a s of July 31, 2013, were n o t ed.
B ecause both A greements contained residency restrictions, th e add res s e s of all employees filling eligible jobs ,
both original a nd replacement , were confirmed to be i n Col l i e r C o u nt y .
Although not required under these In centive A greements, the I -9 status of every replacement employee was
verified. The original employees’ I -9 status had been verified in 2011.
These tests validated that Haynes exce ed ed its Job Creation residency and average wage requirement s for 17
jobs, and that Haynes had retained 37 jobs filled by Collier County residents .
Objective
The objective of the engagement was to vali d a te the numbe r o f eligible j o bs c r ea t ed and retained in accordance with
Hayn e s’ In c e n t iv e A greeme nt s with C o llie r County .
Scope
Th is examination consisted of validating jobs , residency, and wages , including, but not limited to , the following:
Re ad ing Collier County’s Job Creation and Job Retention Incentive Agreements with Haynes Corporation ;
Reviewing sections 125.045, 288.075, and 688.02, Florida Statutes ;
Examining payroll and personnel records at Haynes Corporation ;
Visiting Haynes Corporation and i nterviewing applicable management;
Substituting replacement employees, as needed, for original employees who had since terminated;
Scheduling payroll and person nel data for all employees h olding jobs claimed as created;
Averaging annual wages for created jobs by reporting year; and
Listing personnel data for replacement employees holding jobs claimed as retained .
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Background
Haynes Corp oration applied to the County Manager for economic incentives, including Job Creation and Job
Retention , in 2010 . The ordinances providing for economic incentives expired on October 1 , 20 13 , before the Board
of County Commissioners (BCC ) had approved Haynes’ participation in the economic incentive programs . In June
2013 the BCC directed County management to prepare economic incentive agreements with Haynes . At its
December 10, 2013, regular meeting, t he BCC approved J o b Cr e a ti on and Job Retention Incentive Agreement s with
Haynes.
Under the terms of the Job Creation Incentive, t he County will pay Haynes $2,000 per job, spread over three years,
for up to 17 new job s created . The jobs must average at least $34,320 in annual wages , and be held by Collier
County residents .
The J ob Retention Incentive provides $1,000 per job to Haynes for up to 37 j o bs re taine d fro m the time it appli ed
through September 30, 2013, and held by a Collier County resident. The $1,000 incentive is to be paid over three
years, pending verification of the jobs retained.
With the Impa ct Fee & Economic Development Manag e r, Internal Audit validat ed jobs created in accordance with
the Job Creation and Job Retention In c ent ive A gr ee m ents . This r ep or t de s cribes th e res u l t s of th at v a l id ation .
Management Re sponse
“I have reviewed the submitted Audit Report #2014 -9 regarding Haynes Corporation’s compliance with incentive
criteria established by Job Creation and Job Retention Agreements in place with Collier County. I concur with the
audit findings and consider th e Haynes Corporation currently in compliance with the obligations within the Job
Creation and Job Retention Agreements up to September 30, 2013.
Staff appreciates the professional and pragmatic approach exhibited by the Internal Audit Department for this
p erformance validation process .”
Conclusion
Due to Haynes Corp oration ’s compliance with the requirements of its J o b Cr e a ti on and Job Retention Incentive
Agreement s with Collier County , th ere ar e n o adverse o b ser va tion s to report .