WEDC Audit Report Released

May 8, 2015 - General & Events - Tagged: , - no comments
by Brian Lee

New efforts are needed to help ensure that the Wisconsin Economic Development Corporation (WEDC) administers its state-funded programs effectively.

That’s one of the recommendations of the biannual report released today by the non-partisan Legislative Audit Bureau (LAB), which examined WEDC’s administration and oversight of its programs, the results achieved by WEDC’s programs, WEDC’s revenues and expenditures and certain financial management issues.

“It is unacceptable that certain issues raised in the previous audit report have not been addressed,” State Sen. Robert Cowles (R-Green Bay), a co-chair of the LAB, said in a statement. “Maintaining administrative oversight and verifying of our job creation efforts should be a vital aspect to assuring WEDC’s grant, loan and tax credit programs are fruitful and are creating jobs.”

Other findings of the report include:

  • WEDC did not report clear, accurate, and complete information on the numbers of jobs created and retained as a result of its programs.
  • As of June 30, 2014, WEDC maintained a $15.6 million unassigned fund balance, which was larger than necessary.
  • WEDC did not require grant and loan recipients to submit information showing that jobs were actually created or retained.
  • WEDC amended loan contracts to defer loan repayments, wrote off loans and forgave loans, which reduced its potentially noncollectable loan balance in 2014.
  • WEDC awarded tax credits without attempting to verify the accuracy of information submitted by businesses.

“WEDC has made significant improvements to our procedures and policies and has seen positive results,” WEDC Secretary and CEO Reed Hall said in a statement. “Our changes have resulted in a significant decline in loan delinquency rates and (noncollectable) loans, while still providing a high level of customer service to small businesses all across Wisconsin.”

According to the report, the LAB asks that the governing board of either WEDC or the Forward Wisconsin Development Authority report to the Joint Legislative Audit Committee by February 1, 2016, on their efforts to implement each of its recommendations.