According to a report from Wisconsin’s nonpartisan Legislative Audit Bureau (LAB), Gov. Scott Walker’s (R) job creation agency repeatedly violated both agency policies and state laws.
The Wisconsin Economic Development Corporation is the state’s “lead economic development organization,” and was set up by the Walker administration in 2011. The WEDC is not technically a state agency, but it is “funded almost entirely with state funds,” the LAB said.
During its biennial audit and program evaluation of the WEDC, LAB found that the agency gave tax dollars to corporations to assist them in creating jobs. It did not, however, double check to make sure that the companies were actually using the money for its intended purpose.
The audit found that the WEDC “gave loans and tax credits to companies that did not meet its requirements, and did not even attempt to fact-check claims by the companies about the number of jobs they created,” ThinkProgress reported. “Additionally, the agency forgave, wrote off, or deferred more than $4 million in loan payments that the corporations were supposed to pay back to the state.”
Specifically, LAB found that:
- WEDC’s contracts for grants and loans did not contain all statutorily required provisions and did not consistently comply with WEDC’s policies. Grant and loan recipients that were contractually required to create or retain jobs were not contractually required by WEDC to submit information, such as payroll records, showing that the jobs were actually created or retained.
- In 2014, the potentially uncollectible balance of loans with repayments 90 days or more past due decreased by $4.2 million largely because WEDC amended loan contracts to defer loan repayments, wrote off loans, and forgave loans.
- WEDC did not establish all statutorily required policies for its tax credit programs, did not consistently evaluate whether businesses met all eligibility requirements in its tax credit policies, and allocated tax credits in ways that did not consistently comply with statutes and its policies.
- WEDC’s October 2014 economic development program report addressed certain concerns we had noted in report 13-7. However, it did not contain clear, accurate, and complete information on program outcomes, including the numbers of jobs created and retained as a result of awards it made. In addition, WEDC’s data likely did not fully reflect the numbers of jobs created and retained through [fiscal year] 2013-14, and award recipients had additional time to create and retain the expected jobs.
- Although WEDC improved its financial management practices in [fiscal year] 2013-14, its policy for managing its fund balance allowed it to maintain an unassigned fund balance of $15.6 million as of June 30, 2014, which was larger than necessary.
- Staff did not consistently comply with policies established by the governing board, and the policies did not consistently comply with statutory requirements.
This is not the first time the WEDC has come under fire. In 2013, another audit “found the agency repeatedly failed to follow state laws regarding the use of public funds.” In 2014, Eaton and Plexus, two companies that received money from the WEDC, both laid off hundreds of workers in Wisconsin while outsourcing jobs to Mexico.
The WEDC has the stink of GOP politics all over it. Under the guise of helping the “job creators” actually create those jobs they pretend to, the Walker’s agency just handed out even more gifts to corporations.