Where's the oversight?

Last Friday, we wrote that the tax credit program designed to attract more film, television and video production in our state appeared to be producing some modest returns. The nonpartisan Legislative Fiscal Bureau recently figured that moviemakers had generated about $810,000 more for the state than it lost in potential tax revenue since legislators approved it in 2007.

Look for some refiguring.

Weekend reports indicate that shoddy oversight and accounting within the state Department of Economic Development led to the sudden resignation of its director, Mike Tramontina, and the suspension of Tom Wheeler, who supervised the film division. Gov. Chet Culver suspended the program pending the outcome of an investigation he ordered from the state attorney general and state auditor.

The governor's action was appropriate.

But the allegations of mismanagement are deeply troubling and may justify review of the state's entire tax credit program.

Turns out that the $31 million reported by the DED in film industry tax credits for the first two years of the program may actually be tens of millions more. Tramontina's internal audit also found that many vendors used were not from Iowa and that changes were made in contracts with some filmmakers, often increasing the tax credit amounts first approved by the DED. Documentation of expenses were inadequate. Two luxury vehicles purchased with the credits were never used in a film.

These findings point toward a lack of oversight by the DED under Tramontina's watch.

A tax credit program, with proper guidelines and monitoring, can be a useful tool for economic development by many industries. It can bring new jobs and careers and increase tax revenue.

But Iowa's program often falls short when it comes to transparency and accountability. Too often, the DED does not provide enough detailed evidence of whether the tax credits are working. The taxpayer deserves to know more, especially during a time of economic recession with the state likely facing major budget cuts in the coming year. We agree with the Iowa Fiscal Partnership, a non-partisan research group that analyzes the effects of tax and spending policies on Iowans. All spending, including tax credits, should be on the table for inspection.

We also hope that this scandal does not spell the end of the film tax-credit program. We remain convinced that Iowa can benefit from an expanded moviemaking and video industry.

First, however, the state investigation must be prompt and thorough. Integrity must be restored and competent oversight assured.