- Associated Press - Wednesday, August 3, 2016

LINCOLN, Neb. (AP) - A new state audit has uncovered serious flaws in the operations of a Nebraska agency that’s key to the governor’s goal of growing Nebraska’s economy.

The audit, released Tuesday, says the Department of Economic Development spent millions of dollars on grants and contracts during 2015 without adequate documentation or monitoring. State Auditor Charlie Janssen couldn’t confirm the money was used for appropriate reasons.

The audit also questions a more than $14,000 payment made in October as part of a settlement agreement with Brenda Hicks-Sorensen, who became the agency’s director in February 2015 but was fired by Gov. Pete Ricketts in October.

Nebraska Department of Administrative Services attorneys say Hicks-Sorensen agreed to resign and waive all claims against the department in exchange for the payment.

Janssen said the Nebraska Constitution prohibits extra compensation for public employees after services have been rendered.

Agency officials say they’ll fully consider the finding and make appropriate reforms.

The agency’s current director, Courtney Dentlinger, said Monday that the economic development department was tightening up its management practices in response to this audit and two others being done by the Legislature’s Performance Audit Committee and the federal government.

Dentlinger said none of the audits found issues with misappropriation of Nebraska funds. But the state audit raised concerns that the agency didn’t have documents to back up nearly $133,000 in expenses paid to four contractors.

The audit noted that in some cases, foreign receipts weren’t translated into English to determine whether the expenses were reasonable. Other times, travel and lodging expenses reported by contractors were higher than federal reimbursement rates.

The audit found that the department lacked written policies on how the agency would seek reimbursement from non-agency staff and how travel expenses for overseas trade missions would be handled.

The economic development agency has 65 employees and manages programs for business recruitment, innovation, job training, community infrastructure and housing.

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