Department of Development Announces Review and Remediation of Legacy Loan Portfolio
Miranda Pomiecko: (216) 698-2546
– The Department of Development has concluded its final legacy loan portfolio review. The Department has now reviewed and entered into its loan portfolio system of record all authorized loans that have been located, with documentation.
“This effort reflects my administration’s commitment to fixing issues that we inherited,”
said Cuyahoga County Executive Armond Budish. “I am proud of the work that the Department of Development’s Loan Portfolio Management Team has done to fix and improve its Economic Development loan portfolio.”
On April 2, 2019, the Department of Development provided a memo to the County Executive, County Council and the Office of the Inspector General, outlining the significant progress and stabilization of its Economic Development Loan Portfolio. On July 29, 2019, the Department of Development provided a supplemental update to the Cuyahoga County Economic Development & Planning Committee summarizing the completion of the review, validation and reconciliation projects by the benchmark dates and to the standard established by the County Executive.
“By addressing the longstanding issues in this dynamic and complex portfolio with an outstanding principal balance of $61,596,357.48 (as of June 30, 2019), comprised of 304 loans dating back to 1994, we can now accurately communicate the status of our lending activity. The public can have confidence that the County is continuing to provide strong stewardship of taxpayer dollars that have been invested to stimulate job creation,”
stated Ted Carter, Chief Economic Development & Business Officer.
“My deep thanks and appreciation extend to Executive Budish and his executive team, the Development Loan Portfolio Team, the Inspector General, our Economic Development Improvement Team, County Council and Staff and Ernst & Young for their partnership and contributions in achieving this important milestone,”
Identifying and correcting the deficiencies detailed by the Agency of Inspector General in an initial report published in 2015 has been a key focus of County Executive Armond Budish and Economic Development Chief, Ted Carter, since 2016.
“My team and I are committed to maintaining active stewardship of this portfolio and ensuring the highest level of financial integrity and accuracy,”
said Bryan Edwards, Loan Portfolio Manager.
Corrective action taken has included:
- Creating a new Loan Portfolio Team within the Department of Development. This office is separate from the loan origination process.
- Establishing a loan system of record, in which all loans are fully entered/recorded.
- Creating and implementing new economic development loan policies and procedures.
- Implementing semi-annual posting of active economic development loans on the County website, in compliance with the requirements set forth by Cuyahoga County Code.
- Routine and ongoing invoicing of borrowers with outstanding balances. This has led to higher recapitalization of available funds to be loaned out.
- The review, validation and reconciliation projects resulted in every documented loan being reviewed against authorized and executed loan documents. Upon conclusion of the comprehensive reviews, all data was entered accurately into the Department’s loan system of record.