Vermont Seed Capital Fund
Audit Title
Performance Audit of the Vermont Seed Capital Fund: Effectiveness, Compliance, and Economic Impact
Objective:
To determine whether the Vermont Seed Capital Fund (VSCF), managed by the Vermont Center for Emerging Technologies (VCET), is achieving its stated economic development goals efficiently and operating in full compliance with governing documents and legislative intent.
Scope:
Review the VSCF’s investment portfolio, administrative costs, and performance reports over the last three to five fiscal years. Examine investment selection criteria, due diligence files, and valuation methodologies.
Key Audit Areas and Procedures
Effectiveness/Economic Impact Measurement:
Assess achievement of legislatively mandated goals by measuring key performance indicators (KPIs): capital leverage ratio (public-to-private), job creation (quantity, average salary/benefits), and targeted investment in priority areas (e.g., rural, climate).
Efficiency and Operations:
Review the methodology and justification for the fair valuation of portfolio companies. Evaluate the reasonableness and compliance of management fees and administrative costs charged to the fund.
Due Diligence and Selection:
Assess the rigor and consistency of the investment selection process, including the quality of due diligence and documented rationale for state-funded investments.
Compliance and Oversight:
Verify that fund disbursements are compliant with the Limited Partnership Agreement (LPA) and state statutes. Audit the accuracy and completeness of annual and quarterly performance reports submitted to state stakeholders.
Expected Value of the Audit:
Provides transparency and accountability regarding the state's investment in venture capital. It objectively assesses the economic return on public funds and recommends improvements to management practices to maximize the fund's future impact on the Vermont economy.