Nevada Administrative Code Chapter 231 - Economic Development and Tourism
Background
NAC Chapter 231 governs:
Administration of economic development programs in Nevada
Management and distribution of state grants and incentives for businesses
Oversight of tourism initiatives and marketing programs
Reporting, compliance, and auditing of recipients of state funds
Enforcement actions and penalties for violations
The Nevada Governor’s Office of Economic Development (GOED) enforces these rules to ensure public funds are used properly and programs achieve intended outcomes.
Case 1: Misuse of Grant Funds
Issue
A business received an economic development grant but used funds for non-approved purposes.
Facts
Grant was intended to support hiring and training new employees.
Funds were used instead for unrelated equipment purchases and personal expenses.
Rules Applied
NAC 231.120 – Use of funds must comply with program requirements
NAC 231.140 – Reporting and accountability requirements
Board’s Analysis
Misuse of public funds violates both program rules and ethical obligations.
Grants are tied to specific deliverables and objectives; deviations are prohibited.
Outcome
Repayment of misused funds required
Business barred from future grant applications for a period
Mandatory audit of remaining funds
Key Lesson
Grant funds must be used strictly for their intended purpose; misuse carries penalties.
Case 2: Failure to Submit Required Reports
Issue
A tourism-related business failed to submit quarterly performance reports tied to state incentives.
Facts
Incentive payments were linked to visitation metrics and marketing outreach.
Reports were delayed or incomplete for two consecutive quarters.
Rules Applied
NAC 231.150 – Reporting requirements for recipients
NAC 231.160 – Compliance monitoring
Board’s Analysis
Timely reporting ensures accountability and helps the state evaluate program effectiveness.
Noncompliance may trigger suspension of future funding.
Outcome
Payment suspension until reports were submitted
Late filing fines assessed
Requirement to attend compliance training
Key Lesson
Timely and accurate reporting is essential for continued program participation.
Case 3: Ineligible Recipient Awarded Funds
Issue
A company received economic development incentives despite not meeting eligibility criteria.
Facts
Eligibility required a certain number of full-time employees and Nevada-based operations.
Company submitted inaccurate employment figures to qualify.
Rules Applied
NAC 231.110 – Eligibility requirements for programs
NAC 231.120 – Certification and verification of information
Board’s Analysis
Misrepresentation to obtain state incentives violates NAC 231.
Ensuring only eligible entities benefit protects program integrity.
Outcome
Grant rescinded
Company required to repay any funds already received
Penalties applied for providing false information
Key Lesson
Accurate eligibility information is mandatory; misrepresentation leads to disqualification and penalties.
Case 4: Noncompliance with Job Creation Requirements
Issue
A business receiving an incentive for creating jobs failed to meet employment targets.
Facts
Program required hiring 50 full-time employees within 12 months.
Only 30 employees were hired, despite receiving full incentive.
Rules Applied
NAC 231.130 – Job creation and program performance standards
NAC 231.140 – Corrective action for noncompliance
Board’s Analysis
Incentive programs are tied to measurable outcomes.
Failure to meet targets triggers repayment or reduction of incentives.
Outcome
Partial repayment of incentive required
Monitoring plan implemented to track future hiring
Business placed on probation for future incentive eligibility
Key Lesson
Incentive programs are outcome-based; failure to achieve targets has financial consequences.
Case 5: Tourism Marketing Funds Used Improperly
Issue
A tourism association used state marketing funds for unrelated administrative costs.
Facts
Funds were allocated to promote Nevada tourism and events.
Expenses included office renovations and staff bonuses.
Rules Applied
NAC 231.210 – Restrictions on use of tourism marketing funds
NAC 231.230 – Documentation and expense reporting
Board’s Analysis
Marketing funds are earmarked specifically for outreach and promotional campaigns.
Misallocation undermines program goals and violates NAC 231.
Outcome
Reallocation of funds required
Staff retrained on allowable expenses
Association required to submit corrected expenditure reports
Key Lesson
Program funds must be used strictly for intended activities; administrative misuse is not allowed.
Case 6: Failure to Maintain Required Records
Issue
A business receiving economic development incentives could not provide supporting documentation for expenditures.
Facts
Receipts, payroll records, and contracts were missing or incomplete.
Auditors could not verify proper use of incentive funds.
Rules Applied
NAC 231.160 – Record retention and audit requirements
NAC 231.170 – Enforcement of documentation compliance
Board’s Analysis
Maintaining accurate records is essential for accountability and program audits.
Inability to produce records constitutes noncompliance.
Outcome
Incentives withheld until documentation provided
Fine assessed for recordkeeping violations
Requirement to implement internal controls for future compliance
Key Lesson
Accurate recordkeeping is mandatory to demonstrate compliance with program requirements.
Case 7: Conflict of Interest in Grant Allocation
Issue
A state official approved incentives for a company in which they held a financial interest.
Facts
Official did not disclose ownership stake.
Approval bypassed standard evaluation procedures.
Rules Applied
NAC 231.180 – Conflict of interest disclosure
NAC 231.190 – Prohibition against self-dealing
Board’s Analysis
Conflicts of interest compromise fairness and integrity of incentive programs.
Full disclosure and recusal are required to prevent bias.
Outcome
Incentive approval revoked
Official disciplined or removed from decision-making role
Policy review implemented to strengthen conflict-of-interest procedures
Key Lesson
Conflicts of interest must be disclosed; failure to do so invalidates funding decisions.
Overall Themes from NAC 231 Cases
Strict use of funds: Incentives and marketing funds must be used as intended.
Accurate reporting and documentation: Timely submission and complete records are critical.
Eligibility verification: Misrepresentation or falsification is penalized.
Outcome accountability: Job creation and program objectives must be met.
Integrity and conflict of interest: Officials and recipients must avoid conflicts that compromise fairness.
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