Wednesday, May 1, 2013

LAB lambastes WEDC

I'll add more to this at a later point (when it's not the most beautiful day of the year so far), but I can't help but laugh my ass off at the audit the Legislative Audit Bureau released today on WEDC. We already knew these people were unaccountable and clueless, but we didn't know just how bad it was. Let me just give you a taste of what's in the first few pages of the report.
WEDC did not have sufficient policies to administer its grant, loan, and tax credit programs effectively, including some statutorily required policies. It had no policies for determining how to handle delinquent loan amounts. In other instances, WEDC did not consistently follow statutes or its existing policies when making awards. We reviewed files for 64 awards that WEDC made in FY 2011-12 and found that WEDC made some awards to ineligible recipients, for ineligible projects, and for amounts that exceeded limits specified in its policies.

WEDC lacked invoices or other contractually required documentation showing that authorized costs were incurred for 7 of 29 grant and loan awards that we reviewed. In addition, four contracts executed through the Jobs Tax Credit program allocated four businesses a total of $906,000 in tax credits for job creation and employee training that had occurred before the contracts were executed.
   
Statutes require WEDC’s governing board to stipulate contractually that recipients of grants and loans of $100,000 or more must provide a verified financial statement, signed by an independent certified public accountant and by the recipient’s principal officer, describing how the funds were spent. Our review included 14 grant and loan contracts of at least $100,000 for which the recipients had spent all awarded funds as of December 2012. Information provided by WEDC indicated that 12 recipients had not submitted the statutorily required verified financial statements...

Statutes require WEDC’s governing board to establish goals and expected results for each of its programs, monitor the contractually specified performance of recipients of financial awards, and report publicly on program results. Expected results were not established for 10 of WEDC’s 30 programs in FY 2011-12. Information provided by WEDC indicates that from July 2011 through December 2012, recipients of 59 awards that we reviewed submitted 45.0 percent of 40 contractually required reports on their progress toward meeting their contractual terms. Statutes require the governing board to verify the performance information reported by a sample of grant and loan recipients. From July 2011 through December 2012, WEDC conducted no such verification efforts.
It looks like the Walker boys passed WEDC into law in 2011 without any plan for executing the merger, any policies for oversight of these tax credits and taxpayer funds, and basically with no orders other than "give the businesses whatever they want, don't ask questions and don't follow up."

Who could have possibly seen THIS coming, eh? Oh wait, this guy did last summer. Given that WEDC was a paint-by-numbers copy of Mitch Daniels' IEDC, all you had to do was to see how that organization was wracked with cronyism, corruption, and underperformance in jobs to see what would happen in Dairyland with WEDC.

And what it Mitch Daniels doing today? Oh, he's now running Purdue University and will be receiving a $250,000 prize from the Bradley Foundation for his "economic reforms" in Indiana (reforms which left the Hoosier state with the lowest per-capita income in the Midwest).

None of this should be a surprise, and it shows just how fake the outrage the GOPs have with their complaints about the "unaccountable" UW System. WEDC is literally losing track of money with no measures in place to stop it, and the GOP is noticeably silent about the whole issue. Let's see if they stay silent when WEDC comes before the Joint Audit Committee next week, and its budget goes before the Joint Finance Committee later this month.

Somehow, this song is quite fitting today, and about the whole Age of Fitzwalkerstan for that matter.


  1. WEDC wasn't just oversight-challenged in its grants/loans/tax credit programs either:

    Page 71:

    "Among the transactions that lacked a description of their purpose were:
     $1,789 for six season tickets to UW-Madison football games;
     $208 in long-distance telephone calls made over two days by a WEDC staff member from a hotel in Texas; and
     $120 for four iTunes gift cards"

    Page 72:

    "We question whether several purchasing card transactions we reviewed are allowable under Commerce’s purchasing card manual or WEDC’s personnel administration and procedure manual, including:
     $1,190 for UW-Madison Memorial Union Terrace chairs to be given away as a prize by WEDC at a biotechnology conference;
     $82 in alcoholic drinks at a Wisconsin restaurant for three WEDC staff and three WEDC contractors;
     $77 in alcoholic drinks at a Wisconsin restaurant for four WEDC staff and three WEDC contractors."

    Your tax dollars at work!

    Any organization with cardholders is going to see some inappropriate purchases, but the point is that WEDC clearly had no idea how to detect such things.

  2. From the Governor's Commission on Waste, Fraud and Abuse, nothing (

    From its successor, the Waste, Fraud, and Abuse Elimination Task Force, a $5,000 saving at the WEDC from paying staff once instead of twice a month (

    That is all.