The examination was prompted by concerns of the city that theNorthside Economic Development Council, a nonprofit corporationcreated in 1995, was not spending grant funds for their intendedpurpose. The report, released earlier this week, concurs with ademand by the Minneapolis City Attorney's office that the groupmust return the $589,397 in program funds to the city. Theexamination showed that the economic development council failed toprovide the auditor's office with numerous records.Among thereport's findings:

• The City of Minneapolis approved $344,500 in loans to bedisbursed to North Side businesses through the economic developmentcouncil, however, the council only lent out $210,188 of thefunds.

• Advances made to the council's director were never repaid, andmoney was provided for an office assistant position that was neverfilled; consultants were paid $47,884, but the council had noinvoices showing what services were provided.