Audit reveals trouble at jobs agencyThe Walker administration flubbed the start-up of the state’s new economic development organization, according to a 94-page report by the nonpartisan Legislative Audit Bureau.
By: Matt Pommer, Superior Telegram
The Walker administration flubbed the start-up of the state’s new economic development organization, according to a 94-page report by the nonpartisan Legislative Audit Bureau.
Its report this month on the quasi-public Wisconsin Economic Development Corporation showed multiple embarrassing problems for an administration promising tens of thousands of additional jobs.
Creation of the agency was one of the first acts of the Republican-controlled state government in 2011.
Gov. Scott Walker sought it as a replacement for the Commerce Department for which duties had included economic development efforts.
In 2010, Walker had campaigned for governor promising the creation of 250,000 more jobs in the state.
During its first year, WEDC “did not have sufficient policies to administer its grant, loan and tax credit program effectively, including some statutorily required policies,” the audit bureau report states.
Among the examples were:
The agency lacked invoices or other documentation showing authorized costs in seven grant and loan awards;
Four businesses received $906,000 in job-creation tax credits and employee-training funds that occurred before the contracts were awarded;
Twelve grant and loan contracts in which businesses spent more than $100,000 did not have legally required financial statements.
State law requires the WEDC governing board to establish goals and expected results for the 30 programs the agency administers. The audit report said in the 18-month period ending in December that just 45 percent of the recipients of awards had provided the required progress reports.
The audit bureau noted the law creating WEDC gave it flexibility in its operations, but said the agency “must ensure accountability and effective management of its taxpayers’ funds.”
But in its first year of operation, “WEDC did not monitor the amounts spent on each of its programs, in part because it was unfamiliar with its accounting system and did not establish accounting policies and procedures.”
The agency also lacked full policies about staff accepting gifts from businesses and other organizations, according to the audit report. Nor had WEDC and its governing board met legal requirements for reporting to the Legislature on its programs and operations.
The audit bureau also questioned the purchase of alcoholic drinks for WERC staffers and contractors. It examined 50 lodging purchases and found half of them exceeded federal guidelines for government hotel and motel rates.
Also questioned were $46,100 in credit card purchases including $1,789 for six season tickets to University of Wisconsin-Madison football, $120 for four iTunes cards, and $208 in long-distance telephone calls made from a hotel in Texas.
Legislators from both parties are demanding improvements from WEDC to meet the audit criticisms. Tom Evenson, a Walker spokesman, said many of the issues already have been solved. Walker is confident in the direction of WEDC, he added.
Wisconsin has lagged behind neighboring states in job creation in the last two years. The Democratic candidate for governor, whoever it may be, is likely to bring up the audit of Walker’s new agency.