A Democratic state senator says he plans to introduce legislation that would require a state audit of the troubled Wisconsin Economic Development Corporation every year. State law currently requires the state Legislative Audit Bureau to review the jobs agency’s finances and the effectiveness of its programs every two years, and the first such audit (PDF), released last week, said the WEDC had failed to meet basic requirements under state law for administering its grant and loan programs.
Failures noted in the review included not collecting required financial statements from award recipients, lacking a policy for collecting on delinquent loans and never establishing – since Gov. Scott Walker launched the public-private agency in 2011 – a number of other basic policies on purchasing, accounting and the acceptance of gifts by employees. The audit also raised questions about the WEDC’s plans to create a nonprofit foundation that would solicit donations. Since the agency is “funded almost entirely with taxpayer funds,” auditors asked if any would be spent to support the foundation and whether a procedure would be established to allow legislators oversight of the organization.
State Sen. Dave Hansen (D-Green Bay), who survived a recall election in 2011, said in a statement that the WEDC “has shown time and time again that they cannot be trusted to act in the best interests of state taxpayers.” He also pointed to another damning finding by the audit – that a private auditor hired by the corporation was also representing a company that later received $900,000 in tax credits and a $237,200 grant from the WEDC. In another instance, the Audit Bureau found that the agency hired a company to perform IT services (and which would therefore have access to data on grants and loans awarded) that was also representing firms seeking the very same awards.
Walker and Assembly Speaker State Rep. Robin Vos (R-Burlington) have remained supporters of the WEDC, which replaced the old state Department of Commerce. News from the blistering audit in some ways overshadowed continuing coverage of a controversial review by the Legislative Fiscal Bureau that found hundreds of millions of dollars idling in accounts spread around the UW System. At a meeting of the Joint Committee on Employment Relations, normally a sleepy affair, Republicans blasted UW System President Kevin Reilly, who said that many of the funds were already earmarked for projects.
