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State Auditor Finds Minneapolis Development Group Should Return City Funds

MINNEAPOLIS-A report alleges that advances made to the council's director were never repaid, that money intended for an office assistant position was never filled and consultants were paid $47,884, but no invoices showing what they did.

By Jim McCartney | Updated on November 21, 2000

MINNEAPOLIS-A Minneapolis development organization mishandled funds, didn’t keep proper records and inappropriately paid employees, board members and the executive director thousands of dollars, according to a report from the Minnesota Auditor’s office. Officials with the NEDC dispute the conclusions of the report, and say the examination was politically motivated.

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.

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