After an audit showed its inability to create jobs Denver officials have severed ties with a nonprofit company.
Officials from the Denver Office of Economic Development recently announced that the city has severed ties with Seedco Financial Services, a nonprofit partner that uses federal aid to spur job growth. That decision came after an audit found the company was producing ideal results for the city.
Seedco, which was given access to almost $6 million in federal aid from the City of Denver, was cited as remaining “significantly and constantly non-compliant” with job-creation goals. The audit found the city’s OED outperformed Seedco when using the same amount of federal funding to create jobs.
Before the contract between the two entities was severed, the Denver City Council was scheduled to vote on a new contract that would have provided Seedco with another $3 million in federal aid, according to an article by The Denver Post.
In 2007, Seedco entered a contract with Denver to use $3 million in federal aid to put toward community development, and the company said it matched that investment by nearly 3-to-1. Earlier this year, Denver allowed the company access to an additional $2.9 million in federal aid.
Seedco made six loans worth $950,000 during 2008, and although the contract required the company to create 60 jobs during 2007 and 2008, only 22 jobs were created. The audit further found that although Seedco closed four loans worth $235,000 this year, the company created no jobs, despite the fact that the contract required the company to create 83 jobs this year.
Tags: Jobs Denver