ICYMI: After Series of Scathing Audits at WEDC, WisGOP Looks to Remove Independent Oversight

Jun 09, 2015

Scott Walker has been plagued with bad press over the failures at his flagship jobs agency, the Wisconsin Economic Development Corporation, as the nonpartisan Legislative Audit Bureau has repeatedly highlighted the agency’s failures in a series of audits that show WEDC lost track of millions of dollars in taxpayer-funded loans and failed to follow state and federal law – and now the Republican legislature is proposing to eliminate the LAB in favor of so-called independent investigators working under the direction of the GOP-controlled legislature.

Citing the nonpartisan Legislative Reference Bureau, the Capital Times reports that the bill “would allow the Assembly speaker and the Senate majority leader to direct the inspectors to ‘audit the records of any state agency or program or any county, city, village, town, or school district.’”

A series of LAB and external audits beginning in 2012 show WEDC lost track of $56 million worth of taxpayer funded loans and found that the agency lacked basic internal accounting controls. The quasi-public agency has also written off more than $7.6 million in loans, to include a $500,000 loan to a troubled company owned by a major donor to Walker’s campaign.

And just last month, another audit released by the LAB found that:

  • WEDC’s contracts for grants and loans didn’t follow the law or even their own internal policies on a consistent basis;
  • Recipients of taxpayer funds were not contractually required to  submit information showing that jobs were created and/or retained;
  • Staff did not consistently comply with policies established by the governing board, and the policies did not consistently comply with statutory requirements;
  • WEDC did not allocate tax credits in compliance with the law or its internal policies and did not establish all statutorily required policies for its tax credit programs or determine whether recipients met all eligibility criteria;
  • WEDC did not properly account for the numbers of jobs created and retained as a result of awards it made.

“Wisconsin taxpayers trust our elected officials and state agencies to be responsible stewards of our resources and make smart investments in programs that go towards building strong communities,” Democratic Party of Wisconsin Chair Martha Laning said Tuesday. “When those agencies are failing, we must be able to rely on independent auditors that will correct the problems in an open and transparent way. As a former auditor, this proposal to do away with the Legislative Audit Bureau raises a number of red flags. It would be unacceptable in any business setting and it is unacceptable in our government to replace independent professionals with a group of self-selected insiders who are predisposed to bias. Maintaining the integrity and authority of the Legislative Audit Bureau is essential to upholding our state’s proud traditions of good, clean government.”