The examination was prompted by concerns of the city that the Northside Economic Development Council, a nonprofit corporation created in 1995, was not spending grant funds for their intended purpose. The report, released earlier this week, concurs with a demand by the Minneapolis City Attorney's office that the group must return the $589,397 in program funds to the city. The examination showed that the economic development council failed to provide the auditor's office with numerous records.Among the report's findings:

• The City of Minneapolis approved $344,500 in loans to be disbursed to North Side businesses through the economic development council, however, the council only lent out $210,188 of the funds.

• Advances made to the council's director were never repaid, and money was provided for an office assistant position that was never filled; consultants were paid $47,884, but the council had no invoices showing what services were provided.