ATLANTA - There's no way to tell if Georgia's annual $114 million tax-break giveaways to businesses are working because state record-keeping is inadequate, a new study says.

The amount of money the state lets companies keep in the form of income-tax credits is roughly equal to the entire tax payments of 70,000 average individual Georgians.

Over the years politicians justified the trade-off, coming up with 24 separate tax credits. They maintain giving companies a break on what they owed the state would encourage them to hire more workers.

No one, however, knows whether it's working.

Companies in Georgia can get credits for a variety of things, including research, manufacturing, exporting cigarettes, use of state ports and moving a headquarters to Georgia.

The most common credits are those for creating a set number of jobs in rural counties, claimed by 416 companies over five years, and credits for re-training workers, claimed by 304 companies in that period.

The problem with tracing results lies with the Department of Revenue, according to a report done by another state agency, the Department of Audits and Accounts and released just last month.

Revenue Commissioner Bart Graham defends his staff and points to the recovery of bigger pockets of money from tax cheats and deadbeats. However, he acknowledges improvement is possible and said he accepts many of the recommendations in the report.

While the idea of the tax auditors getting audited might spark a snicker or two, the report identified several weaknesses in the way the Revenue Department oversees compliance in the tax credit program.

Murky laws, overlapping responsibilities with other state agencies and constantly shifting eligibility rules complicate matters, according to the report. Nevertheless, the authors target most of their criticism at the tax collectors.

"As a result of having limited internal controls over its review of tax credits and record keeping, the Department of Revenue cannot ensure that the credits have been accurately and consistently earned and used," the authors wrote.

Their complaints range from a lack of procedure manuals for Revenue Department staff to a hodgepodge of computers, which store data on taxpayers. These are prone to errors and lack security safeguards to protect companies' privacy. Mr. Graham said Friday that changes are being made to address those issues.

He didn't agree, though, with the authors' recommendation that businesses be required to submit more proof that they're entitled to the tax credits they claim. Mr. Graham notes that the law doesn't require added documents and that few examples of cheating have been uncovered.

Indeed, Mr. Graham's staff audited 71 companies claiming investment tax credits and only found $8,094 in assessments as a result. Audits of 48 claims of job tax credits resulted in a single assessment of $76,384, while the remaining 47 were found to be in compliance. Yet the cost to administer tax credits is $381,000 per year.

"Yes, we know we need a more sophisticated system with more controls on it, but we're comfortable that we're not being taken advantage of - other than people being aggressive in what they seek," he said.

His view is shared by some outside tax professionals, including Kathleen Thies, a writer and analyst for CCH Inc., a publisher of state-by-state tax guides for accountants and corporate finance officers.

"They're pretty fair about letting the taxpayer know what to do, but they're not going to let anyone get away with things," she said.

From the standpoint of the companies that must report to the Department of Revenue, Ms. Thies says the state's approach to tax credits is smart.

"They have a pretty good relationship with corporate taxpayers, and that's why (the businesses) stay," in Georgia, she said.

Economist Alan Essig isn't so sure.

He's the executive director of the Georgia Budget and Policy Institute, a think tank that looks for ways to free up money for social programs. Mr. Essig said he would like to be able to evaluate whether the tax credits are effective but can't for two reasons.

First, because tax returns contain private information, they're exempt from the state's Open Records Act, preventing him or other members of the public from making their own determination about who uses tax credits. Second, the Revenue Department doesn't gather the data that could be summarized and reported to the public for analysis.

"The potential for abuse is built into the lack of accountability," he said.

Mr. Essig isn't the only one curious about the impact of tax credits. Members of the General Assembly from both parties have raised the same questions as part of recent discussions about general tax reform.

They think of the $114 million in taxes not collected in the same way they would a spending program subject to scrutiny during each year's budget process.

"The question the auditors raised very well is why we don't have the same accountability that we expect from any expenditure," Mr. Essig said.

He wasn't satisfied by the Revenue Department's comment to the report's authors that the tax credit programs amount to less than 1 percent of the $16 billion in taxes collected.

"If you look at expanding health insurance to all children, less than one percent would do it," he said.

Mr. Graham, though, is almost as cynical about tax credits as Mr. Essig. He says that most of them are claimed on amended returns, those filed sometimes years later when consultants search for missed opportunities for the companies to save money. Mr. Graham figures that's proof that company executives made their decisions to create jobs in Georgia without the tax credits foremost on their minds.

Besides, he says, every company is going to take whatever is offered - and then want something in addition, sort of a way to prove how special the state considers them.

Still, the information to evaluate the impact of each tax credit could be available soon.

"We agree we need more data. We're in the process of adding more data," he said.

The Revenue Department is installing computer equipment that will scan paper returns to eliminate the cost of clerks typing it in. Other equipment will allow employers to file electronically.

At the same time, Mr. Graham has been meeting with his counterparts at the departments of Community Affairs and Technical & Adult Education to overhaul how those agencies award the authority to claim most tax credits. For instance, a company asks Adult Education to determine a certain course qualified for a re-training credit. It's up to Revenue to sort through the tax returns, but it doesn't have the legal responsibility to question the course.

The three agency heads are trying to unscramble those issues.

In the meantime, voters and policy makers have no way to judge tax credits, whether making more available would create jobs or whether they're a giveaway that could fund other programs.