Commerce Audit Faults Ohio for Mismanaging $20.9 Million

The U.S. Department of Commerce Office of Inspector General released an audit faulting Ohio for poor oversight of $20.9 million in federal funds distributed through the Manufacturing Extension Partnership between 2017 and 2024. The report identifies waste, abuse, and self-dealing by board members of local affiliates, specifically the Manufacturing Advocacy and Growth Network (MAGNET) and Ohio State University South Centers.

Findings include $6.6 million in unreported PPE sales by MAGNET and $2.3 million in unnecessary spending on events and marketing. The Inspector General recommended that the National Institute of Standards and Technology permanently terminate funding for Ohio and attempt to recoup the lost money, stating that federal financial assistance is a privilege.

Federal officials paused funding in December, triggering a wave of closures and suspensions among affiliates including TechSolve, FastLane, and the Center for Innovative Food Technology. MAGNET has already laid off half of its staff. While the Ohio Department of Development stated it has zero tolerance for fraud, waste, and abuse, MAGNET CEO Ethan Karp contested the findings, claiming the report creates a false and unfair picture of the organization.