A venture capital firm in Brookville broke federal conflict-of-interest rules by investing $1.6 million in taxpayer dollars in four small technology companies in which the firm had sizable stakes, the U.S. Treasury Department has found.

In a 17-page audit released Tuesday, the department’s Office of Inspector General said Canrock Ventures “recklessly misused” money from a federal investment program by putting it into the four software startups, all based in Brookville.

Canrock’s founders and managing partners, through the venture firm, “had a controlling interest in each of the four beneficiary companies’ voting shares, which violated the [program’s] policy guidelines, regarding conflicts of interest,” auditors for the IG said. The partners owned between 50.2 percent and 55.1 percent of each company.

Canrock co-founder and managing partner Mark Fasciano wasn’t immediately available for comment. He has denied that Canrock violated conflict-of-interest rules and said that state officials knew how Canrock operated but took no steps to stop the investments.

The IG auditors recommended that Treasury recoup the $1.6 million. However, they said Treasury, in lieu of repayment, could opt not to send to New York State the final $1.6 million due under the program.

The state was awarded $55.4 million from the State Small Business Credit Initiative program, established in 2010 to spur the growth of tech companies after the recession.

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Empire State Development, the state’s primary business-aid agency, selected Canrock and seven other venture firms to invest the funds in promising startups. The other firms are the focus of a separate audit.

Empire State Development spokesman Jason Conwall said Tuesday night that the Canrock audit “confirms our earlier statements — Canrock’s investments were inconsistent with its contractual obligations.”

Treasury started examining Canrock after Newsday in early November 2013 began asking the department questions about one of the venture firm’s federally funded investments.

The audit did not identify the four companies that received problematic investments.

However, email and government documents show Canrock had controlling stakes in four startups that received federal funds: General Sentiment Inc.; Karma411, later renamed Crowdster; Sentiment Alpha Capital Management; and Thrive Metrics Inc.

Treasury found no problems with Canrock’s investment in a fifth startup.

Records show that fifth investment was in Vidaao Inc. of Manhattan.

Vidaao found a buyer after state officials barred Canrock from making further investments of federal funds.