COLUMBUS, Ohio - While Gov. John Kasich and Auditor Dave Yost seek middle ground in a dispute over an audit of JobsOhio, some Statehouse Democrats allege the governor's administration has mishandled grants to the private, job-creating agency.

Stoking the JobsOhio controversy is the announced departure this week of Christiane Schmenk. She leads the public economic development agency that granted $1 million in start-up money to JobsOhio and committed to granting at least $5 million more to a private subsidiary of JobsOhio.

Kasich's administration said Schmenk's departure has been in the works for a while, as the governor's economic development strategy evolves.

Kasich is replacing Schmenk with David Goodman, head of the Ohio Department of Commerce.

Two Democratic lawmakers -- Reps. John Patrick Carney of Columbus and Denise Driehaus of Cincinnati -- on Thursday called Schmenk's resignation "curious" and evidence of a "growing scandal" over JobsOhio.

A Kasich spokesman noted that Ohio's job picture has brightened since Kasich took office, fueling Democratic anxiety.

"Nothing terrifies partisan operatives more than to see a governor that is getting Ohio back on track and to see JobsOhio helping to create jobs,"' Rob Nichols said in an email. "As Ohio becomes more successful, the partisan opponents only get more nervous and their sniping will only get louder."

But it's a fellow Republican who's calling on Kasich to open JobsOhio's books. Yost has issued a subpoena calling for JobsOhio to turn over financial records by Tuesday.

Kasich's administration says any public money moved to JobsOhio should be audited. But any private dollars should not.

Private dollars include millions of dollars in contributions to JobsOhio. Liquor profits that JobsOhio will realize under a complicated lease deal with the state also should not be subject to a public audit, the Kasich administration contends.

Yost argues that JobsOhio must open all of its books. His office and the Kasich administration have been negotiating the extent of the audit.

Yost offered earlier this year to keep his office's audit of JobsOhio private for five years, but that offer is no longer on the table, spokeswoman Carrie Bartunek said.

"It was a trial balloon to get them to the table," Bartunek said. "It would never have landed at five years, but it was something to open discussions."

Carney and Driehaus echoed Yost's call for full disclosure of JobsOhio money during their news conference. Carney believes Schmenk's agency mishandled grants to a JobsOhio subsidiary.

That transaction and others, revealed in recent stories by The Columbus Dispatch, will be audited by Yost. Schmenk requested the audit earlier this week to "reassure the public" that JobsOhio used the money properly, a development agency spokesman said. Kasich supports the audit.

Carney and others have said the transaction should have been approved by state lawmakers and the Controlling Board, a legislative panel that oversee state expenditures.

Kasich's administration said the grants were handled the same way as Gov. Ted Strickland's administration handled the grants to the Ohio Business Development Coalition, which is now the JobsOhio subsidiary.

Carney said the Kasich administration needed to reveal that the JobsOhio subsidiary was now receiving the grants.

"My guess is that they thought it was OK to do it," Carney said.

Yost's audit of the transaction "is a step in the right direction," Driehaus said. "But it's certainly not enough."

She and Carney want the House Finance Committee to subpoena JobsOhio records too. That's not likely because the committee is controlled by Republicans, who back Kasich's contention that JobsOhio records involving private money should not be audited.

Carney and Driehaus had no qualms about raising the specter of misdeeds.

"If there is nothing to hide, why is Director Schmenk leaving in the midst of this controversy?" Carney asked. "The governor, (former JobsOhio head) Mark Kvamme and Director Schmenk need to come forward and answer to what has happened. The coverup is always worse than what has happened."

Carney and Driehaus insisted their conjecture about JobsOhio problems wasn't politically motivated. Questions about JobsOhio's funding must be answered as legislators hammer out a two-year budget, as proposed by Kasich, they said.