Audit of MassVentures Objectives, Scope, and Methodology

An overview of the purpose and process of auditing MassVentures.

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In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of certain activities of MassVentures (MV) for the period July 1, 2017 through June 30, 2019.

We conducted this performance audit in accordance with generally accepted government auditing standards. Those standards require that we plan and perform the audit to obtain sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions based on our audit objectives. We believe that the evidence obtained provides a reasonable basis for our findings and conclusions based on our audit objectives.

Below is a list of our audit objectives, indicating each question we intended our audit to answer; the conclusion we reached regarding each objective; and, if applicable, where each objective is discussed in the audit findings.



  1. Does MV accurately summarize and verify employment data it collects from the businesses it funds and supports?

No; see Finding 1

  1. Does MV follow Chapter 30A of the General Laws (the Open Meeting Law)?

No; see Finding 2

  1. Does MV conduct outreach activities with its target audience of industries, companies, and founders not served by traditional venture capital funding?


  1. Does MV comply with its established award criteria and process guidelines in administering its Small Business Innovation Research Targeted Technologies grant program?



To achieve our audit objectives, we gained an understanding of the internal control environment by reviewing MV’s internal control plan and agency policies and procedures, as well as conducting interviews with MV management. We tested the design and effectiveness of controls we determined to be relevant to our audit objectives regarding the administration and awarding of grants, as well as outreach activities. We also performed the following procedures.

Summarization and Verification of Employment Data

We obtained the summary reports for the equity and grant programs from MV to determine whether it summarized the employment data collected from the businesses it funds and supports.

From the summary reports, we selected a nonstatistical random sample of 30 from the population of 181 companies that submitted surveys during our audit period. For the sample selected, we matched quarterly payroll amounts and numbers of employees from the summary reports to the individual surveys received.

From the same population, we selected a nonstatistical judgmental sample of 20 companies to determine whether MV verified the summarized data. For the sample selected, we reviewed correspondence between MV and the companies that submitted surveys for evidence that survey data were verified.

Open Meeting Law Compliance

To determine whether MV complied with the Open Meeting Law, we selected a nonstatistical random sample of 5 from the population of 19 board meetings held during the audit period. For the sample selected, we reviewed internal documents, emails, meeting notices, and meeting minutes to verify that MV met the law’s requirements related to (1) notices of board meetings, (2) board meeting minutes, and (3) executive sessions held during board meetings.

Further, we reviewed certification forms for each member of the board of directors to determine whether MV complied with the certification requirements of the Open Meeting Law.

Outreach Activities

To determine whether MV conducted outreach activities with its target audience of industries, companies, and founders not served by traditional venture capital funding, we obtained MV’s Deal Log Pipeline report, an Excel workbook that summarizes all the companies to which MV has conducted some level of outreach, with changes in status and outcomes added as they occur. We selected a nonstatistical random sample of 30 companies from the population of 673 companies added to the pipeline during the audit period and reviewed the following information for each company:

  • whether the Deal Log Pipeline Report contained a submission date to document commencement of the outreach process
  • whether status changes were recorded in the report
  • whether a resolution date had been recorded for each company (or the company remained “open” or “pending”)
  • whether indicator codes for attributes such as interaction level, rank, and status were recorded in the report

Grant Awards

To determine whether MV administered the grant program in accordance with established policies and procedures for reviewing, evaluating, and awarding grants, we selected a nonstatistical random sample of 20 from the population of 150 grant applications received during the audit period. We reviewed the grant files and other pertinent information (applications, external evaluations, and scoring sheets) to determine the following:

  • whether grant applications were complete and accurate
  • whether external evaluations and related scoring sheets were prepared
  • for applicants that were granted interviews, whether a panel of judges conducted an internal evaluation and whether detailed scoring sheets and rankings were completed
  • whether all eligibility requirements were met

Data Reliability

To determine the reliability of the data on MV’s spreadsheets of (1) employment statistics from survey respondents, (2) company names and demographic information from outreach activities, and (3) grant applications and grant awards, we interviewed management personnel responsible for the source data.

In addition, to ensure completeness and accuracy of the data, we verified the number of items in each population (including company names) by determining whether the data on the MV spreadsheets matched the source documents (returned surveys, submitted applications, and the Deal Log Pipeline Report) from MV’s internal records and files and testing each population for duplicates.

To determine the completeness of the list of board members provided by MV, we reconciled the list to internal documents (appointment and reappointment records) maintained by MV’s office manager. In addition, we determined whether the number of board seats (11) was in accordance with the enabling legislation.

Further, to verify the list of the 19 board of directors’ meetings held during our audit period, we compared the meeting dates to the meeting schedules proposed and approved by the board each year.

Based on the results of these data reliability assessment procedures, we determined that the information obtained for our audit period was sufficiently reliable for the purposes of our audit work.

Date published: March 19, 2020

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