(The Center Square) – There are new calls to overhaul Wisconsin’s economic development arm after another audit found more problems.
The Legislative Audit Bureau report into the Wisconsin Economic Development Corp. found WEDC missed its promised-jobs-mark, spent thousands of dollars on ineligible grants and failed to recoup money that should have been paid back.
“Ever since its inception, I’ve been keeping a close eye on WEDC, given the opportunity for mismanagement and fraud that their broad mandate presents. While it was a bit rocky in their early years, I had recently felt that WEDC may be moving in the right direction. I’m disappointed to say I don’t feel that way anymore,” Sen. Rob Cowles, R-Green Bay, said of the audit.
Auditors said WEDC spent nearly $1 billion on tax credit grants and loans between 2011 and 2021, with the promise of creating 26,241 jobs during that decade. The audit says businesses that received those tax credits and loans created 17,485 jobs.
“WEDC’s information indicated that recipients of 338 tax credit and loan awards that closed through FY 2021-22 created 66.9% of the planned number of jobs,” the report noted.
WEDC said those same companies retained just 73.7% of the jobs they were contractually obligated to keep.
“This administration needs to take a hard look at the management of WEDC and ensure that swift changes per LAB’s recommendations are implemented. Ensuring statutory compliance, fiscal prudence and transparency should be values at the forefront of WEDC’s mission,” Cowles added.
In addition to missing the jobs-mark, the audit says WEDC’s “procedures for awarding tax credits did not consistently comply with statutes.”
That includes five grants worth a total of $50,000 that were made to ineligible recipients, as well as eight grant recipients who were not required to repay more than $64,000 that had been used to cover expenditures outside the contractually specified time periods or not verified.
Auditors say WEDC also didn’t revoke $2.6 million in tax credits, even though these recipients did not meet their contractual obligations.
WEDC Secretary MIssy Hughes acknowledged the audit and promised some changes.
“LAB has emphasized the importance of evaluating WEDC’s programs and impacts. WEDC agrees and recognizes that evaluation of programs is critical to determining the best means of deploying its resources. To this end, WEDC is improving internal program evaluation processes and plans to engage a third party to evaluate the Business Development Tax Credit Program,” Hughes told the auditors.
“This evaluation shows that WEDC’s leadership is not displaying these values to the hardworking business owners and consumers of Wisconsin,” Cowles said.
