Enterprise Florida's overseas sales numbers questioned

By JIM TURNER
THE NEWS SERVICE OF FLORIDA

THE CAPITAL, TALLAHASSEE, December 9, 2015.......... The state's business-recruitment agency, which Gov. Rick Scott uses for international trade missions, needs to do a better job of separating anticipated overseas sales figures from the actual sales, according to the Legislature's accountability office.

The office has also advised lawmakers that Enterprise Florida should establish goals to assist a wider range of companies starting to get into the export-import field.

Enterprise Florida, which has drawn heavy attention recently because Scott has proposed setting aside $250 million to provide corporate incentives, said it is working to improve how its keeps the overseas sales figures.

The Legislature's Office of Program Policy Analysis and Government Accountability, or OPPAGA, outlined the disparity about international sales records in a report presented to lawmakers last week.

Mary Alice Nye, chief legislative analyst for the office, told the Senate Commerce and Tourism Committee that many of the sales numbers reported by Enterprise Florida remain "largely unverified and may overstate performance."

After Scott led a trade mission to the Paris Air Show in July, the governor's office sent out a release that said 17 companies from Florida on the trip pulled in more than $150 million in projected sales.

Projected sales for nine life-science companies that went on an Enterprise Florida mission to Brazil was $31 million. A trip to Mexico City resulted in more than $6.5 million in sales to six Florida companies. And 32 Florida exhibitors attending a Dubai-based show reported $155 million in projected sales.

However, while EFI has reported anticipated export sales the past three years at $2.1 billion, the actual export sales total is closer to $243 million.

Nye said the problem is due in part to a reliance on self-reporting by private companies that work with the business-recruitment agency.

"So even what's reported as actual sales, those transactions may not be finalized," Nye said.

There is also some difficulty in tracking the numbers as Enterprise Florida, which has 15 international offices, spreads out credit for overseas projects.

The foreign offices get credit for sales when they refer leads to Enterprise Florida. Later, the sales credits gets picked up by the agency's business development unit.

"Nevertheless, EFI doesn't verify the amount of the investment or the jobs associated with that investment," Nye said. "So they may or may not be what was originally indicated in the original lead."

Nye also said Enterprise Florida needs to make its services more available to a wider range of businesses.

She said the office found that the number of businesses that have received financial assistance from Enterprise Florida is limited, with 36 percent of the grant recipients getting 63 percent of the awards.

"Some of them received as many as four or five or six grants over the three years that we were looking," Nye said. "In addition, in their own words, some of these companies clearly indicated a longstanding relationship with Enterprise Florida, going back 10 or 20 or more years. And at least a few companies appear to have very large, international corporate experience, with headquarters around the world."

The findings were no surprise for the group Integrity Florida, which since 2012 has been one of the biggest critics of Enterprise Florida, often calling out the agency for the appearance of favoritism.

"We have said all along that performance measures for Enterprise Florida should not be based on jobs promised or sales anticipated, but rather actual jobs created and actual sales delivered," said Ben Wilcox, the research director for Integrity Florida.

Stephen Lawson, a spokesman for Enterprise Florida, said the agency has already agreed to work with the Department of Economic Opportunity to "more effectively track both anticipated and actual export sales."

"While obtaining follow-up sales results has proven challenging in the past, we are prepared to make every effort to secure this data from our clients and develop new performance measures that will contribute to more insightful tracking of the assistance we provide," Lawson said.

Lawson added that Enterprise Florida is prepared to follow up with companies by surveying them about export sales 12 months after the original date of sale.

He added that starting in January the one-year follow-up information will also be required of companies that receive trade grants.