An Internal Revenue Service audit of a Rio Nuevo District Board bond sale in 2002 showed the money was spent in compliance with promises to investors.
The IRS finding of "no change" means the tax-exempt status of the bonds was approved, said Fletcher McCusker, the chairman of the Rio Nuevo board.
The purpose of the audit, McCusker said, was to ensure the district used the money the way it promised investors it would. The $36 million in bonds were issued to borrow that amount toward purchase of the Tucson Convention Center from the city of Tucson.
“Because these are tax-exempt bonds, the reason the IRS gets involved is if there was any issues with the use of the proceeds or any money left over, you could lose their tax exemption," McCusker said.
“This is what, in layman’s terms, we would call a clean audit," he said.
The IRS is not auditing any other of the downtown redevelopment district bonds, but the FBI and the state Attorney General's Office are still looking into the district's financial records.
Many records were seized in April 2011 as part of that investigation. McCusker said the board has heard no update and considers the activity ongoing.
McCusker and the rest of the Rio Nuevo board members were appointed after the Legislature took over the board and reduced the scope of the district's duties.