The short answer to the above question is YES, God did create evil and what follows is the proof straight from the pages of the bible.
The LORD hath made all things for himself: yea, even the wicked for the day of evil.
In the above scripture God plainly states that he creates darkness and evil, states it plainly yet I have heard all kinds of fanciful explanations for this verse that try and prove that it does not mean what it says. This word DARKNESS is the very same word that is used in Genesis 1:2 which tells us that darkness was upon the face of the deep. This darkness that was upon the face of the earth was not a physical darkness but rather a spiritual darkness, just as the light that God commanded to shine in Gen. 1:2 was spiritual light. Physical light that comes from heavenly bodies such as the sun, moon and stars did not come into existence till the fourth day so the light that shone on the first day was spiritual light. This spiritual light did not become visible to man until Jesus Christ was incarnated and came down to Earth. John 1:4 In him was life; and the life was the light of men. 5 And the light shineth in darkness; and the darkness comprehended it not. It is obvious that the light that John was writing about was not physical light for the sun was certainly shining in Jesus’ day and such light was fully comprehended and appreciated by men. What they did not comprehend was spiritual light, which is the knowledge of God, because they were in spiritual darkness. The point here is that this spiritual darkness was also created by God by creating the devil; we understand that the devil was not created evil in the beginning but became so at a later date but the fact still remains that the very purpose for which Lucifer was created was so that evil would be born into the world through him. Now no one will question that God created Lucifer and Lucifer became evil, so if God with his infinite understanding did not want evil, all he had to do was to not create Lucifer – problem solved! If you and I can think of this solution then do you not think that God would also have thought about it yet he went ahead with his plans, why?
Evil: H7451 rā‛āh: An adjective meaning bad, evil. The basic meaning of this word displays ten or more various shades of the meaning of evil according to its contextual usage. It means bad in a moral and ethical sense and is used to describe, along with good, the entire spectrum of good and evil; hence, it depicts evil in an absolute, negative sense, as when it describes the tree of the knowledge of good and evil (Gen_2:9; Gen_3:5, Gen_3:22)
Waster: H7843 / šāḥaṯ: A verb meaning to spoil, to ruin, to destroy, to pervert, to corrupt, to become corrupt, to wipe out.