Overview
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, 2021 through June 30, 2023.
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.
| Objective | Conclusion |
|---|---|
| No; see Findings 1 and 2 |
| Yes |
| Yes |
To accomplish our audit objectives, we gained an understanding of the internal controls we determined to be relevant to our objectives by reviewing MV’s policies and procedures and by interviewing MV staff members and management. In addition, to obtain sufficient, appropriate evidence to address our audit objectives, we performed the procedures described below.
Annual Reports
To determine whether MV submitted its fiscal years 2022 and 2023 annual reports to the clerks of the Massachusetts House of Representatives and Senate within 90 days of the end of each fiscal year as required by Section 6 of Chapter 40G of the General Laws, we requested and reviewed all four email submissions of the annual reports—two for each year. In addition, we requested and reviewed all two of the annual reports to determine whether Chapter 115 (veteran benefits), Chapter 117A (emergency aid for older adults and people with disabilities), and Chapter 118 (aid to families with dependent children) benefits were detailed in each annual report, as required. We performed multiple word searches to find any terminology that included keywords in the criteria. In addition, we reviewed the annual reports and the audited financial statements for fiscal years 2022 and 2023 for details of the corporation’s experience over the previous year and investee municipalities satisfying the criteria for economic target areas.
See Findings 1 and 2 for more information regarding the results of our testing related to the development and submission of MV’s annual report.
Investments
To determine whether MV monitored investments to ensure that it complied with the requirements set forth in Section 4(9)(2)(a) of Chapter 40G of the General Laws, we reviewed all investments made during the audit period. We reconciled a list provided to us by MV of the total dollar amount of investments to the independently audited financial statements for each year in the audit period. We reconciled all investments made during the audit period to bank wire transfer receipts to determine whether MV made the investment. We confirmed each investment company’s location to determine whether it was in an economic target area.
We calculated that at least 50% of the investments made by MV during the audit period were to companies located in an economic target area.
We determined that, during the audit period, MV followed Section 4(9)(2)(a) of Chapter 40G.
Strategic Plan
To determine whether MV established a formal strategic plan as recommended in our prior audit (Audit No. 2019-0136-3A), we reviewed the strategic plan that was in effect during the audit period. We reviewed analyses of strategic plans from credible sources2 and found seven common elements that should be included in a strategic plan. These elements were also found in agencies that report to the Massachusetts Office of Performance Management and Oversight.3 We verified that MV established a strategic plan that included the seven basic common elements of a strategic plan as a basis for its strategic plan. We confirmed that MV’s strategic plan included the following seven common elements:
- a vision statement;
- a mission statement;
- goals;
- core values;
- action items;
- strength, weakness, opportunity, and threat analyses; and
- key performance indicators.
In addition, we reviewed the board of directors meeting minutes as supporting documentation that the board of directors was informed of the strategic plan.
For the audit period, we determined that MV created a strategic plan for the organization.
Data Reliability Assessment
To determine the reliability of the fiscal year 2022 and 2023 lists of 30 investments that we received from MV, created from its portfolio management database, we performed validity and integrity tests on the data, including testing for hidden rows and columns, blank fields, and duplicate records, and confirming that all investments made were during the audit period. We interviewed employees who were knowledgeable about the data. (See Other Matters for more information.) Of the 30 investments, 25 were equity investments and 5 were debts (loans or notes).
For all 25 equity investments from MV’s list, we matched the dates, company names, and dollar amounts from MV’s portfolio management database to the purchase agreements.
For all five debt investments (three notes and two loans) from MV’s list, we matched the dates, company names, and dollar amounts from MV’s portfolio management database to their respective agreements.
Based on the results of the data reliability assessment procedures described above, we determined that the information we obtained was sufficiently reliable for the purposes of our audit.
| Date published: | June 17, 2025 |
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