A "centers of excellence" initiative that has lavished more than $40 million on North Dakota colleges offers scant evidence of success in creating private jobs, an audit of the state Department of Commerce program shows.

At least four colleges did not have adequate documentation of private-sector support for their grants, which require $2 in private investment for every $1 in grant funds, the audit says.

A project review board, the Centers of Excellence Commission, has never ordered a technical review of any project to judge whether it is workable, the audit says. The commission has allowed less than two weeks for close scrutiny of applications, it says.

"The application process and monitoring of the Centers of Excellence has not provided adequate accountability for the use of state funds," the report says. "No determination has been made as to whether the Centers of Excellence are having the desired economic impact, as required by state law."

Shane Goettle, director of the Department of Commerce, said the agency already has adopted many of the audit's conclusions, which recommend stronger documentation of the progress of grant-financed projects and any private investment they attract.

The Commerce Department has been responsible for monitoring grants for four years, which is long enough to fairly judge the success of individual projects, Goettle said.

"I think it is appropriate now to begin examining each center on its own merits," he said. "Some of the projects have matured to the point where it makes sense to do what the auditors are recommending."

The audit, done by the North Dakota auditor's office, is scheduled for presentation to the Legislature's Audit and Fiscal Review oversight committee Wednesday.

Centers of Excellence has been one of Gov. John Hoeven's primary economic development initiatives, aimed at translating research and expertise on North Dakota's college campuses into commercial businesses and projects.

The program has helped finance research into pharmaceuticals, electronics, surface coatings and oil field operations.

Since 2005, the Legislature has agreed to spend up to $60 million on Centers of Excellence projects, including $20 million in the current two-year budget period, which began July 1. More than $40 million has been allocated in the last four years.

A 2008 annual report and North Dakota State University economic analysis of the Centers of Excellence program estimated that it was responsible for more than 1,200 jobs and $169 million worth of economic benefits.

The new audit questioned the accuracy of data used to compile the report, saying it included internal contradictions about the number of jobs that could be credited to state grants.

Since its inception, the Centers of Excellence Commission has approved 24 grants, including two separate grants for the same initiatives at North Dakota State University, the University of North Dakota and Lake Region State College in Devils Lake. Two grants were rescinded when the universities were unable to meet their project conditions.

Brett Narloch, director of the North Dakota Policy Council, an organization that has been critical of state subsidies for private business, said the audit's findings were similar to the council's own conclusions about the initiative.

Each college's claims about the job growth attributable to state grants is not verified, and matching money obtained from the federal government or local governments is counted as private investment, Narloch said. Only a few projects have been successful at attracting money from private companies, he said.

In a February report on the Centers for Excellence, the council concluded the centers "have, by and large, failed to achieve their objective."

"Very few products and services have been created, very few are on time ... and there has been very little noticeable impact on the North Dakota economy," the report said.

Don Morrison, director of NDPeople.org, who has lobbied the Legislature for stronger job and wage disclosure requirements when taxpayer money is spent on business development, called the audit's conclusions "extremely disappointing."

"If we're going to use this money for economic development, we've got to make sure it works," Morrison said.