Overview
MV did not disclose in its annual report in detail the number of additional jobs created, and the number of people hired, as a result of the activities of the corporations that were recipients of programs provided for in Chapters 115 (Veteran’s Benefits), 117A (Support by the Commonwealth), or 118 (Aid to Families with Dependent Children) of the General Laws, as required by Section 6 of Chapter 40G of the General Laws. In addition, MV did not provide details of the corporations’ experiences over the previous year in investing in at least 50% of all MV investments in municipalities that satisfy the criteria for economic target areas.
If the annual report does not contain information about the activities of MV investees, then the Legislature will not have the information necessary to adequately review MV activities for the preceding year. Further, failure to file these reports in a timely manner may deprive the Legislature of important information it needs to support its work.
Authoritative Guidance
According to Section 6 of Chapter 40G of the General Laws,
The report shall contain the number of additional jobs created and the number of persons hired as a result of the activities of the corporation who were recipients of programs provided for in chapter 115, 117A, or 118. The report shall detail the corporation’s experience over the previous year in meeting the requirements of clause (2) of the fifth paragraph of section 4 [of Chapter 40G of the General Laws].
According to the requirements of clause (2) of paragraph 5 of Section 4 of Chapter 40G of General Laws,
At least 50 per cent of all [MV] investments shall be made in enterprises that will:
(a) locate in . . . municipalities that satisfy the criteria for economic target areas;
Reasons for Issue
MV stated the following in a response to our draft report dated March 21, 2025:
MV does compel investees to provide annual jobs data and maintains contractual job rights agreements with each company to report jobs data on an annual basis. It does not compel investees to provide a number of jobs created and the number of people hired who are classified under chapter 115 (military veterans), chapter 117a (eligible for public assistance) or chapter 118 (families in need with dependent children) for its annual report because MV considers it inappropriate and in some cases it has become unlawful to ask job applicants to report this type of information.
Regarding the requirement that 50% of MV investments be in economic target areas, MV stated in a response to our draft report on April 29, 2025 that it does disclose the town or city in which the investee is based; however, “MV does not explicitly state which of those municipalities are deemed [economic target areas] by the Commonwealth or that those investees, along with the historical portfolio, exceed 50%.” This is because, MV stated in an email dated May 1, 2025, “MV thought listing the towns and cities was sufficient, as the Commonwealth determines which towns and cities are [economic target areas].”
Recommendation
MV should ensure that all investees provide all of the information required to prepare the annual report, and MV should include all of the required information in its annual report.
Auditee’s Response:
- MV does not provide the number of additional jobs created and the number of persons hired as a result of the activities of the corporation who were recipients of programs provided for in chapter 115 (military veterans), 117A (eligible for public assistance), or 118 (families in need with dependent children) for its annual report because in some cases it has become unlawful to ask job applicants to report this type of information.
- MV does disclose the town or city in which the investee is based but MV does not explicitly state which of those municipalities are deemed [economic target areas (ETAs)] by the Commonwealth or that those investees, along with the historical portfolio, exceed 50%.
- MV will add more specific ETA language to the annual report going forward.
Auditor’s Reply
The additional jobs created and the number of people hired who were recipients of programs provided for in Chapters 115, 117A, and 118 of the General Laws are required to be included in the annual report, according to the General Laws.
While MV’s annual reports do include high-level information, for example, as stated in MV’s 2023 Annual Report, dated October 19, 2023, “job creation from these Massachusetts’ companies is measured in the thousands. The current portfolio companies . . . employed over 3,000 people in Massachusetts,” we believe there is room for improvement to fully comply with the statute.
MV indicated in its response that it may be unlawful to ask job applicants to report this type of information. Our audit focused solely on MV’s compliance with the statute—specifically, whether MV included all the information in its report that is required by the statute. This could include information that MV has learned from voluntary disclosure or a statement that MV has no knowledge of the relevant personnel statuses for job applicants. We recommend that MV discuss this issue with the Legislature and pursue a potential amendment to the statute if it believes that the current requirement is unlawful and, therefore, contradictory to the reporting requirements set forth in other laws.
Based on its response, MV appears to be taking measures to address our concerns regarding the economic target area language. As part of our post-audit review process, we will follow up on this matter in approximately six months.
| Date published: | June 17, 2025 |
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