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Secretary's office reports $9 million in legacy credits and backlog in foreign business registrations
Summary
At a Feb. 14 hearing, Chris Drake, director of Business Services, told the General Government A Subcommittee the office has accumulated over $9 million in "money on account" from an old filing system and carries nearly 1,000 foreign-entity enforcement cases, a backlog the office says could yield $700,000900,000 if cleared.
Chris Drake, director of the Business Services Division at the Secretary of the State's office, told the General Government A Subcommittee on Feb. 14 that the agency has accumulated more than $9 million in legacy credits from an older filing system known as Concord and carries a backlog of enforcement matters for foreign businesses.
Drake said, "over time during Concord and a lot of this happened while I wasn't director, we accumulated over $9,000,000 in those monies on account." He explained that the credits arose when filers paid fees for submissions that were later rejected; the payment was retained as a credit on the account and many filers never resubmitted.
Why it matters: the backlog and the unrefunded credits were flagged in the agency audit and represent both an operational problem and a potential revenue opportunity. Drake told the committee the unit handling foreign-business registrations has almost a "thousand case backlog," and that resolving the known cases could bring in an estimated $700,000 to $900,000 annually.
Key details and committee discussion
- Money on account: Drake characterized the larger problem as a legacy accounting and statutory issue tied to the old Concord filing system. He told the committee the office has proposed statutory solutions but said a legislative fix is required to clear some audit items.
- Foreign business enforcement: Drake explained that a foreign limited liability company (LLC) doing business in Connecticut is statutorily required to register, and that the business-enforcement unit (one attorney and one paralegal) is currently unable to keep up with roughly 1,000 cases. He said cleaning up those cases is a priority and could materially increase annual collections.
- Audit and staffing context: Michelle Provost, interim director of management support, described multiple vacancies and recruitments in the agency that contributed to lapses in personal-services spending and delayed work. She estimated current lapses in personal services of roughly $700,000, which may change as recruitments conclude.
Legislative follow-up
Committee members requested meetings with agency staff to discuss statutory fixes and regulatory enforcement strategies. Representative Ryan and others indicated interest in regulatory compliance and occupational-licensing enforcement that overlaps with the business-services workload. The agency said it would provide additional detail and welcome follow-up meetings; no committee votes were recorded on these matters in the transcript.
Ending
Drake said the agency has proposed legislative remedies for the money-on-account issue and that without a statutory change the audit finding may remain. Legislators asked the office to provide more detailed figures and to meet separately about enforcement and regulatory options.
