The Milwaukee Journal Sentinel and Associated Press are reporting that an audit by the state’s non-partisan Legislative Audit Bureau found significant questionable financial activities surrounding Governor Walker’s Wisconsin Economic Development Corporation. This time tax credits for creating jobs have gone unaudited, legally required reports haven’t been filed and there has been questionable spending on the part of WEDC employees. And some of the tax credits have gone to unqualified employers or for actions that predated the application for the credits.
From the MJS:
he review by the nonpartisan Legislative Audit Bureaufound that last year the Wisconsin Economic Development Corp. didn’t require financial statements from companies receiving incentives; gave awards to ineligible businesses and ineligible projects; and awarded nearly $1 million in tax credits to companies for actions taken before they had signed their contracts with the state. The agency didn’t adequately follow up to see if jobs were being created and didn’t clearly report the jobs numbers that it did have, the audit found.
Staff used agency credit cards to buy alcohol and football tickets, and WEDC had to be reimbursed for travel and meals for family of the agency’s head. In addition, WEDC did not always engage in competitive bidding on contracts and in two cases hired firms with conflicts of interest.
Sen. Robert Cowles (R-Allouez), co-chairman of the Legislature’s Joint Audit Committee, said there was no excuse for not following state laws or being accountable to taxpayers. A hearing on the report is scheduled on May 9.
“I hope they can get their act together, but this is pretty darn bad,” Cowles said. “I’d say the jury is out whether this was a good idea to create this whole entity . . . I don’t think there can be any more excuses. They’ve got to fix this thing.”
From the AP:
A blistering audit released Wednesday said Gov. Scott Walker’s premier job creation agency repeatedly broke state law in its first year of operation, failed to adequately track money it awarded for economic development projects and sometimes gave money to ineligible recipients.
Employees of the public-private entity also made unexplained purchases of University of Wisconsin football season tickets, alcohol and iTunes gift cards, the far-reaching audit of the nearly two-year-old Wisconsin Economic Development Corp. found.
Walker and the Legislature created WEDC in 2011 and it has been beset by problems since it started operating in July of that year. The audit by the nonpartisan Legislative Audit Bureau only added to the woes, with Republicans who supported creating WEDC, along with longtime Democratic critics, calling for immediate changes.
“This audit shows there is a significant disconnect between our expectations of WEDC and the reality of their performance with regard to transparency and accountability,” said Sen. Rob Cowles, R-Green Bay, co-chair of the Legislature’s Audit Committee.
Reed Hall, secretary and chief executive officer of WEDC, said he does not believe WEDC broke the law. Because WEDC is not a state agency, but a public-private partnership, there can be disagreements over its obligations under the law, he said.
Both in the interview and in a response letter to the Audit Bureau, Hall said WEDC has made significant progress toward addressing what he called “operational shortcomings.”
“The vast majority of issues raised by LAB have already been identified by WEDC and other parties, and substantive solutions are already in place or are in the process of being implemented,” he wrote.
But Rep. Peter Barca, a member of the WEDC board and leader of Assembly Democrats, said “the time for excuses is over,” and if improvements aren’t made in a year the agency should be dismantled.
When WEDC was created to replace the Commerce Department, staffing levels were cut from about 300 to 50. The new agency lost its first CEO after just 16 months on the job and its third chief financial officer resigned last month after just 24 hours on the job. That turnover in key leadership positions contributed to struggles at the fledgling agency, Hall said.
“Ultimately the buck should stop with the governor,” Barca said. “I would hope the governor would take responsibility for this.”
If laws were broken, some one should be seeing the inside of a courtroom…