The Wisconsin Department of Natural Resources failed to follow state law and its own rules, according to a legislative review of the state's $28.1 million recycling program.

The nonpartisan Legislative Audit Bureau found the DNR spent money appropriated for recycling administration on other related programs, and for three years under Gov. Scott Walker the agency failed to carry out required reviews of local recycling programs.

The audit bureau also found the agency failed to analyze results of its program reviews to identify trends that could help municipalities spot and fix common problems.

Over a four-year period between 2015 and 2019, the DNR spent more than $807,000 appropriated for recycling administration on a program to promote beneficial reuse of industrial byproducts, such as coal ash, foundry sand and paper mill sludge.

The DNR contends the funds were used appropriately because the programs reduce solid waste, a principle covered by the recycling statute.

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"It's not like we went out and bought boats. These were recycling expenses, and they were broadly in keeping with the intent of the law," said Brad Wolbert, program director for the Bureau of Waste and Materials Management. "The spirit of the law was met if the letter was not."

DNR Secretary Preston Cole said the agency would look for another funding source for the beneficial reuse program, which was created by the Legislature in 1998 but never funded.

The audit also found lapses in the DNR's review of local recycling programs.

State law requires the agency to review at least 5% of state-funded programs to ensure compliance, which works out to about 50 annual reviews.

In 2016, the DNR conducted just one. It fell short the following two years as well.

While the DNR did 73 reviews in 2019, the audit bureau noted there were no site visits, and the agency failed to analyze the results of its telephone interviews, which the audit bureau said showed a pattern of problems with many programs.

Cole defended the use of phone interviews but said the agency would continue working to meet its target and to analyze the results.

"The department acknowledges there is always room for improvement and will continue to provide guidance to all responsible units to ensure continued communication of common concerns and potential solutions," he wrote.

The audit also found the DNR is not following its own rules, which require municipalities to collect specified amounts of certain materials, like newspaper and glass, per capita. Instead, local governments are required to report a lump sum of all material collected.

That's because the recyclers who sort the materials can't provide an itemized inventory for each municipality.

The DNR acknowledged the need to update its rules, which are nearly 30 years old and don't reflect current consumer habits, though it hasn't provided a timeline for that update.

The report, released Friday, Nov. 13, also faults the Department of Agriculture, Trade and Consumer Protection for not requiring documentation of expenditures from municipalities that received $744,500 in grants for collecting and disposing of household hazardous waste, unwanted prescription drugs and pesticides.

Costs increase as prices fall

According to the audit, the cost to run local recycling programs increased over the past three years for the majority of local governments that responded to a survey, while the volume of recycled materials declined nearly 9% in recent years as market prices for materials plummeted.

In 2017, for example, recyclers were getting $137 a ton for cardboard. By 2018, the price had fallen to just $38. Meanwhile, recyclers were paying $2 a ton to get rid of mixed paper that several years earlier had been worth $62 a ton.

Other states, such as Michigan, have provided grants to help material recovery facilities upgrade their equipment in order to make the sorting process more efficient, or have funded initiatives to develop new markets for less valuable materials such as glass, paper and organic waste.

The report also found disparities in the amount of municipal government expenses covered by state recycling grants, which are distributed according to a statutory formula that hasn't changed in more than 20 years.

Grants covered less than 10% of the expenses for 281 of the more than 1,000 recipients, but more than 40% for 94. Among the largest recipients, Eau Claire County's grant of $487,700 covered 37.5% of expenses, while Green Bay's grant of $433,200 covered just 9.3%.

The report suggests the Legislature modify the statutory formula for awards, which is based on populations or eligible expenditures in 1999.

"Since then, the populations and eligible expenditures may have changed considerably for responsible units," the report states. "Thus, statutes could be modified to reflect the current populations and eligible expenditures of responsible units."

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