Official Site of The State of New Jersey

TRENTON—A state program that provides tax breaks to companies has reduced and recovered $3.4 million that was improperly awarded, according to a follow-up review by the Office of the State Comptroller.

OSC’s original 2019 audit found the New Jersey Economic Development Authority awarded billions in tax incentives without verifying that the businesses actually created the jobs that were promised. OSC’s follow-up review in 2022 found that of 21 recommendations that OSC made, EDA had fully implemented 10 recommendations, but took limited action to recover improperly awarded tax credits and payments identified by OSC.

In OSC’s 2025 follow-up review, OSC examined incentive awards made in 2022 and 2023 and found EDA had clawed back $3.4 million that had been improperly awarded in 15 projects. The bulk of the awards—about $2.5 million—was for Business Employment Incentive Program tax credits given to three projects. OSC’s 2019 audit found EDA used incorrect data to calculate the awards and directed EDA to recoup funds.

Overall, EDA made substantial progress and fully implemented 14 recommendations made in its 2019 audit. It established procedures to track job data, avoid double-counting jobs, ensure businesses submitted sufficient documentation, and independently verify data, among other positive changes. More than $100 million in taxpayer funds was saved overall as a result of improved processes, OSC has found.

OSC’s 2025 review noted that several key recommendations were partially implemented or not implemented. OSC found that EDA did not take any action to assess the net economic benefits of three Urban Transit Hub Tax Credit Program (HUB) awards. OSC also found that as much as $20 million in tax breaks should be recovered based on the fact the net economic benefits to New Jersey fell short of what was initially promised.

OSC audited EDA in response to an executive order from Governor Phil Murphy. OSC’s initial 2019 audit found that “key internal controls were lacking or nonexistent” and noted that EDA did not actually confirm that jobs were created or that the awardees met the requirements. “The agency lacks adequate policies, procedures, and controls to provide accurate and reliable program results,” OSC’s report said. That audit led to the Governor convening an investigative task force, as well as OSC’s subsequent reviews.

The five incentive programs audited by OSC have shut down. EDA administers numerous new programs, which were beyond the scope of this review.

Read the report.

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To report government fraud, waste, mismanagement, or corruption, file a complaint with OSC or call 1-855-OSC-TIPS.