Montana Board of Science and Technology Development, Montana Science and Technology Alliance, Department of Commerce : limited scope performance audit PDF
Preview Montana Board of Science and Technology Development, Montana Science and Technology Alliance, Department of Commerce : limited scope performance audit
Tc nonxana* 351•7232Legislature, L72dcbs Office of the **'^* Montana Board of Science and Technology Developroentt Office of the Legislative Auditor State ofMontana Report to the Legislature January 1991 Limited Scope Performance Audit Montana Board of Science and Technology Development Montana Science and Technology Alliance Department of Commerce TThis report contains recommendations for improving the TadhmeinriesctormamtieonndaotfitohnesMaodndrteasnsa: Science and Technology Alliance *- Goals and objectives. Policies and procedures. File documentation and organization. „ STATE OCCUMEHTS COLLECTION • Proj.ect monitoring. MONTANA STATE LIBRARY 1515 E. 6th AVE. HELENA, MONTANA 59620 Direct comments/inquiries to: Office of the Legislative Auditor Room 135, State Capitol Helena, Montana 59620 90P.30.4 l»ERFORMANCE AUDITS PerformanceauditsconductedbytheOfficeoftheLegislativeAuditoraredesignedtoassess state government operations. From the audit work, a determination is made as to whether agencies and programs are accomplishing their purposes, and whether they can do so with greater efficiency and economy. In performing the audit work, the audit staff uses audit standards set forth by the United States General Accounting Office. Membersofthe performance auditstaffhold degreesindisciplines appropriate to theaudit process. Areasofexpertiseinclude businessandpublicadministration,statistics,economics, computer science, communications, and engineering. Performanceaudits are performed atthe requestofthe Legislative Audit Committee which isabicameralandbipartisanstandingcommitteeoftheMontanaLegislature. Thecommittee consists offour members of the Senate and fourmembers ofthe House ofRepresentatives. MEMBERS OFTHE LEGISLATIVE AUDIT COMMITTEE Senator Greg Jergeson, Vice Chairman Representative John Cobb, Chairman Senator Tom Keating Representative Mike Kadas Senator Paul Svrcek Representative Robert Pavlovich STATEOF MONTANA KuhHnX MONTANASTATELIBRARY fjj^ jjf jjj^ Ktm&iutiiXt: ,,7232L72dcbt1991c1 t_ -/ L- STATECAPITOL HELENA,MONTANA59620 406/4443122 DEPUTYLEGISLATIVEAUDITORS: MARYBRYSON OperationsandEDPAudit LEGISLATIVEAUDITOR: JAMESGILLETT SCOTTA SEACAT Financial-ComplianceAudit LEGALCOUNSEL: January 1991 JIMPELLEGRINI JOHNW.NORTHEY PerformanceAudit The Legislative Audit Committee of the Montana State Legislature: This limited scope performance audit of the Montana Science and Tech- nology Alliance is in response to requirements of House Bill 683 of the 51st Legislature. The report contains recommendations concerning management con- trols at the Montana Science and Technology Alliance. The agency response is contained at the end of the report. We wish to express our appreciation to the staffof the Montana Science and Technology Alliance and the Montana Board of Science and Technology Development for their cooperation and assistance. Respectfully sujimitted Scott A. Seacat Legislative Auditor / Office of the Legislative Auditor Limited Scope Performance Audit Montana Board of Science and Technology Development Montana Science and Technology Alliance Department of Commerce Members of the audit staff involved in this audit were: Dave Gould, Kent Rice, C. Susan Jensen, and Cindy D. Susott. 1 Table of Contents List ofTables and Figures iv Appointed and Administrative Officials v Report Summary S- Chapter I Introduction 1 IntroductioD Audit Objectives 1 Scope of Audit 1 Compliance 2 Management Memorandums 2 Limited Scope Review 3 Chapter II Introduction 5 Background Montana Board ofScience and Technology Development . . 5 Program History 5 Program Summary 6 Seed Capital Investments 6 Research Development Investments 7 Staffing 8 Program Funding and Expenditures 8 Payback 9 Other States Contacted 10 Chapter III Introduction 13 Investment Process Seed Capital Projects 13 Executive Summary Review 15 Threshold Review 16 Due Diligence 16 Board Decision on Financing Recommendations from MSTA 17 Memorandum Agreement 17 Page 1 Table of Contents Allocation of Funds 18 Additional Rounds of Financing 18 MSTA and the Board Use Appropriate Criteria When Making Seed Capital Investments 19 What Should Montana Expect for Return on Seed Capital Investments? 19 Montana Technology and Entrepreneurship Forum ... 20 Conclusion 20 Research and Development Projects 21 Centers of Excellence 22 Review Process 23 Approval Process 23 Funding Process 24 Direct Funding of Research and Development Projects 24 Alternative Agreements for Research and Development 24 Return-On-Investment from Research and Development 25 Conclusion 25 Chapter IV Introduction 27 Program Administration Management Information 27 Goals and Objectives 29 Investment File Documentation and Organization 31 Confidentiality of Information 34 Funded Project Monitoring 35 Seed Capital Projects 36 Research and Development Projects 36 Summary 38 Develop Policies and Procedures 38 Chapter V Summary 41 Report Summary Management Control 41 Program Status 42 Agency Response Montana Department of Commerce 45 Page ii 1 Table of Contents Appendices Appendix A - MSTA Project Activity A-1 Appendix B - Venture Capital and Research and Development Activity in Other States B- Page iii List of Tables and Figures Table 1 MSTA Administrative Expenditures (Unaudited) Fiscal Years 1987-88 through 1989-90 9 Figure 1 MSTA Seed Capital Review, Approval, and Funding Process 14 Figure 2 Centers of Excellence Research and Development Review, Approval, and Funding Process 23 Page iv
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