Trade and Commerce Agency Criticized for Program Oversight

State auditors have accused the California Trade and Commerce Agency of lax oversight of a $6.7-million technology program to help small manufacturers improve their competitiveness.

Though the audit concludes that three state-funded manufacturing technology centers appear to be spending taxpayer dollars appropriately, state auditors say they have no way of determining whether the program is effective because Trade and Commerce has failed to come up with any reliable performance measures.

The audit, which was done last year and recently made public, criticizes the state trade agency’s Office of Strategic Technology for failing to develop goals for the program, set standards for the centers or compile enough data to figure out if they’re serving their small manufacturing clients well.

Trade and Commerce officials have agreed to take corrective action and will report back to the Bureau of State Audits with a game plan later this month.

The state Manufacturing Technology Program provides funding to public agencies and nonprofits that assist small and medium-size manufacturing companies. Those small firms are the backbone of the state’s massive manufacturing sector, which employs one in eight California workers and contributes more than $134 billion to the gross state product.

Since 1996, the state has joined with the federal government in funding three manufacturing technology centers in California: the California Manufacturing Technology Center in Hawthorne, the Corp. for Manufacturing Excellence in Fremont and the San Diego Manufacturing Extension Center. The centers offer free or low-cost consulting services to small manufacturers to help them with everything from plant modernization to work-force development.

An economic study performed last year by the National Institute of Standards and Technology concluded that the three California centers have helped small manufacturers increase sales, employment and tax revenue. State auditors have questioned the reliability of those numbers, however. They want Trade and Commerce to come up with its own analysis.

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To obtain a copy of the audit, visit the Bureau of State Audits Web site at https://www.bsa.ca.gov/bsa/summaries/99025sum.html.