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.
• About $30,000 was paid as "cash" or in cashier's check, with no documentation of what the money was used for.
During the three-year period examined by the auditor's office, the economic development council took in more than $725,000 from various city sources, but a little more than a third of that was spent on loans to businesses, the development council's primary business, the report concluded.
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