Wednesday, January 28, 2026

State Auditor Case #016517

Formal complaint submitted on January 28, 2026, to

THE OFFICE OF THE STATE AUDITOR

https://hotlineform.utah.gov/improper_government_activity

Whistleblower form questions & answers:

_____________________________________________

1. What do you believe the government entity did, or is doing, that is wrong or improper? (REQUIRED)

I believe the Governor’s Office of Economic Opportunity (GOEO), through its staff and Board, improperly structured and approved a one‑time $2 million grant from the Industrial Assistance Account (IAA) at its January 8, 2026 board meeting. The concerns are:

  • The public notice and agenda described the item only as “Industrial Assistance Account (IAA) Grant – The Board will vote to approve one IAA grant,” without disclosing the $2 million amount, the film‑focused purpose, the AI‑centered “ecosystem” concept, or the newly formed nonprofit recipient.

  • The grant appears to have been justified using broad, speculative claims about an AI‑driven film “ecosystem” without the clear, measurable performance benchmarks, recapture provisions, and economic impact analysis that are standard in other GOEO incentives.

  • Meeting discussion indicates that funds previously allocated to a departing film festival “came back” and were redirected into this grant, raising concern that appropriated funds are being repurposed for a materially different project without comparable legislative transparency or safeguards.

  • The selected nonprofit was recently formed, and public records do not show a competitive or open process, or broad consultation with existing film institutions and incentive programs that might more effectively and transparently use these funds.

2. Who is involved (name, position, supervisor name and contact information)?

Because this complaint is about institutional process and controls, I am focusing on roles rather than individuals:

  • Governor’s Office of Economic Opportunity (GOEO)

    • GOEO Executive leadership responsible for administering the Industrial Assistance Account (IAA).

    • GOEO Business Development / incentives staff who prepared and presented the IAA item at the January 8, 2026 Board meeting.

    • GOEO Board members who discussed and voted on the IAA grant.

  • Recipient organization

    • The nonprofit entity that was formed in 2025 to implement the film “ecosystem” concept and that was recommended for the $2 million IAA grant.

I understand the State Auditor can identify specific names and contacts from the January 8, 2026 GOEO Board agenda, minutes, and audio.

3. If known, what specific statute, rule, ordinance, policy, etc. do you believe was violated? Alternatively, please describe why you think the action was wrong.

Possible statutes and issues:

  • Utah Code Title 63N, Chapter 3, Part 1 (Industrial Assistance Account) – especially:

    • Requirements that the administrator establish and document findings on the nature of the economic opportunity, required expenditures, and benefit to the state.

    • Requirements for minimum Utah spending ratios, benchmarks, monitoring, and appropriate structuring of assistance.

  • Transparency and open‑government expectations

    • The agenda language gave the public almost no information about a large, one‑time statewide grant, while other items in the same packet included detailed descriptions and metrics. This appears inconsistent with good‑faith notice, even if it does not violate the letter of a specific notice statute.

  • Appropriation intent and redirection of funds

    • Public reporting indicates that state budget funds were previously allocated or earmarked to support a specific film festival. After that festival decided to leave, state leaders publicly stated those funds would be removed or redirected. The January 8, 2026 discussion suggests some of that money has effectively been repurposed into this new IAA grant, but with a very different risk profile and much less clarity.

Even if the decision technically falls within the Board’s formal authority, I believe the combination of poor notice, weak performance safeguards, and redirection of previously justified funds makes this a case of potential mismanagement, waste of public funds, and failure to follow the spirit of the Industrial Assistance Account’s statutory framework.

4. When did the event(s) take place (dates if known)? One-time event or on-going?

  • Key decision date: January 8, 2026 – GOEO Board meeting where the $2 million IAA grant was presented and approved.

  • Notice date: January 6, 2026 – public posting of the GOEO Board meeting notice and “All Materials” agenda.

  • Related context: 2025 legislative session and 2025 executive/press statements regarding the state’s financial offer to retain a major film festival and subsequent plans to redirect those funds after the festival chose to relocate.

This appears to be a one‑time decision with ongoing financial and oversight implications.

5. Where did the event(s) occur? Identify the location, division, office, etc., if applicable.

  • Governor’s Office of Economic Opportunity (GOEO)
    GOEO Board Meeting
    60 E South Temple, Suite 300
    Salt Lake City, Utah 84111

The meeting was also conducted via Zoom, as reflected in the “All Materials – GOEO Board – 1.8.26” document on the Utah Public Notice Website.

6. How do you know about the event(s)? Did you see it occur? Did you hear about it from someone else? Did you see evidence?

  • I reviewed the publicly posted GOEO Board agenda and “All Materials – GOEO Board – 1.8.26” PDF from the Utah Public Notice Website.

  • I listened to the audio recording of the January 8, 2026 GOEO Board meeting, including the presentation and discussion of the IAA grant.

  • I reviewed the articles of incorporation for the nonprofit that received the grant, obtained from the Utah Division of Corporations.

  • I reviewed multiple news articles from 2025 and 2026 that describe legislative efforts to allocate funds to retain a major film festival, subsequent statements that those funds would be redirected after the festival chose to relocate, and later coverage of the GOEO Board’s incentive decisions.

7. What evidence exists to support your complaint?

Evidence I am aware of and can provide or reference:

  • GOEO Board meeting notice and agenda

    • The January 6, 2026 meeting notice and the “All Materials – GOEO Board – 1.8.26” PDF showing:

      • Agenda item titled only “Industrial Assistance Account (IAA) Grant – The Board will vote to approve one IAA grant.”

      • Detailed executive summaries for other incentives at the same meeting, but no comparable public summary for the IAA grant.

  • January 8, 2026 meeting transcript/audio

    • Recording and/or transcript in which:

      • GOEO staff describe the film “ecosystem” concept, AI‑enabled labs, AI soundstage, and broad outcomes.

      • Staff mention that funds previously allocated to Sundance “came back” and are now being used in this grant.

      • The Board votes to approve a one‑time $2 million IAA grant.

  • Nonprofit incorporation documents

    • Articles of incorporation filed in May 2025, showing the recipient organization was only recently formed and confirming its general purpose and governance structure.

  • Press and legislative reporting

    • Articles describing the Legislature’s proposed $3.5 million allocation to help retain the festival and statements that the funds could be reallocated if the festival left.

    • Reports that, after Sundance chose Colorado, state leaders would remove or redirect that funding toward a new festival and film‑industry efforts.

I can provide copies or links to these documents and recordings upon request.

8. Please identify other entities to which you have reported this complaint. Describe what actions were taken, if any, and the outcome of those actions.

At this time, I have not filed a formal complaint with any other oversight body.

I have:

  • Shared concerns informally with other members of the public and stakeholders in the film community.

  • Drafted a letter to a state legislator to raise policy concerns about the use of the Industrial Assistance Account and the lack of transparency around this grant, but I have not yet received any formal response or seen any corrective action.

No other formal investigations are known to me at this time.

9. Please disclose whether the subject matter has been, or is likely to be, litigated. What was the outcome or current status of litigation?

To my knowledge:

  • The subject matter has not been litigated.

  • I am not currently aware of any pending lawsuits or formal legal challenges specifically focused on this IAA grant or the January 8, 2026 GOEO decision.

10. We encourage citizens to make reasonable attempts to resolve concerns when anonymity or retaliation is not a concern. Please describe any measures taken to resolve these concerns and the outcome.

Reasonable steps I have taken:

  • I have reviewed publicly available documents and records to ensure my concerns are based on verifiable information rather than speculation.

  • I have shared a letter to state legislators and other state agencies, outlining concerns about transparency, statutory alignment, and better use of funds through existing film incentive programs.

  • I have considered preparing a GRAMA request to GOEO for the full IAA application file, contracts, and internal analyses related to this grant, to obtain more clarity.

At this point, I have not seen any changes to GOEO’s public documentation of the grant, any supplemental disclosures to the public, or any indication that the grant structure has been reconsidered.

11. What would you consider a satisfactory outcome if this complaint is accepted?

A satisfactory outcome would include one or more of the following:

  • A formal review by the State Auditor of the January 8, 2026 IAA grant decision, including:

    • Whether GOEO complied with Utah Code Title 63N, Chapter 3, Part 1.

    • Whether appropriate findings, benchmarks, and safeguards were established.

  • Clear, public recommendations for improving transparency and controls on future IAA grants, such as:

    • Minimum disclosure standards for agenda items over a certain dollar threshold.

    • Requirements for written economic‑impact analyses and performance benchmarks for any large grant.

  • If deficiencies are found, corrective actions, which may include:

    • Revoke the grant

    • Dissolve the nonprofit organization

    • Reallocate remaining or future funds in favor of established, performance‑based tools like the Motion Picture Incentive program administered through the film commission.

  • Public reporting of the Auditor’s findings so that citizens and legislators can understand what happened and adjust policy or oversight as needed.

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From: Office of the State Auditor...
Subject: Your Complaint has been received
Date: January 28, 2026 at 11:59AM

Dear Joseph Puente

Thank you for taking the time to communicate your concerns to the Office of the State Auditor. Case #016517 has been created.

Your complaint will be evaluated in the near future by our Special Projects Division. If accepted, we will add the complaint to our statewide list of projects that is prioritized based on several factors, including but not limited to, available staffing resources. If you provided your contact information, we may contact you as necessary to obtain more information and clarification about your concerns. Please understand that this process will take time.

Sincerely,
THE OFFICE OF THE STATE AUDITOR