The Joint Legislative Audit Committee co-chairs blasted the Wisconsin Economic Development Corp. after a review found the agency gave grants to ineligible recipients and failed to revoke tax credits.
Committee Co-chairs Sen. Eric Wimberger, R-Green Bay, and Rep. Robert Wittke, R-Racine, in a statement pointed to the audit as evidence the agency is falling short of expectations to create and retain jobs. The Legislative Audit Bureau found WEDC gave five grants totaling $50,000 in federal funds to ineligible recipients and failed to require eight other grant recipients to repay $64,300 in federal funds after the recipients failed to comply with their contracts.
Wimberger slammed WEDC for what he called a failure to “execute meaningful change.”
“There is no excuse,” he added.
WEDC Secretary Missy Hughes in a letter responding to the audit said her agency will provide a plan to address the concerns by Dec. 6.
“WEDC is dedicated to robust program administration, including the creation and maintenance of program guidelines and procedures,” the letter reads. “LAB’s identification of potential improvements and clarifications helps WEDC in this effort.”
LAB made 26 recommendations, such as:
*determine every six months the remaining balance and the total amount of past-due repayments for all loans 90 days or more past due;
*determine the payment delinquency rate and the principal delinquency rate on the first and last day of each six-month period;
*require five recipients to repay a total of $50,000 in Main Street Bounceback grants that were awarded contrary to U.S. Treasury guidance and then return the repaid funds to Department of Administration;
*require eight recipients to repay $64,300 identified in its verification efforts of programs supported by supplemental federal funds and return the repaid funds to the DOA; and
*annually determine and document in one location how individual programs are expected to help achieve the organization-wide goals.
The audit also found WEDC did not revoke $2.6 million in tax credits from recipients who did not meet contractual obligations. LAB also pointed out WEDC could start posting its meeting minutes and agendas on its website to be more transparent with the public.
Wittke said the committee will keep an eye on WEDC to make sure it corrects the issues.
“When organizations like the WEDC are lax in their adherence to statutory requirements and policies, it is the role of legislative oversight to demand improvement. The Audit Committee will continue to be attentive to the work of the WEDC, particularly as they recover COVID-era misallocated funds,” Wittke said.
See the LAB audit report here.
See the co-chairs’ statement here.
