Awards from the Wisconsin Economic Development Corp. that have received media attention wouldn’t have been given out under WEDC’s current practices, agency officials told lawmakers.
WEDC officials yesterday defended the agency over an audit this year from the Legislative Audit Bureau, which found the agency had broken with state statutes and its own policies several times in awarding economic incentives to businesses.
The officials told the Joint Legislative Audit Committee they’ve implemented policy changes that address many concerns outlined in the recent and past audits from the LAB. Hannah Renfro, WEDC’s chief legal counsel, pointed to three questionable awards the agency gave to the companies BCI, Green Box and Eaton.
“Those awards should not have happened,” Renfro told the committee. “We’ve taken swift, strict action against all of those.”
Reed Hall, the outgoing CEO of the agency, wasn’t present at the hearing. He was attending Gov. Scott Walker’s Small Business Summit in Eau Claire.
At the hearing, State Auditor Joe Chrisman told lawmakers the audit found WEDC didn’t fully verify, through such methods as checking payroll numbers, the job creation numbers companies provided. Without that information, Chrisman said, WEDC has “limited ability” to determine the outcome of its awards.
The audit also found the agency reduced its balance of uncollectible loans by by writing them off, forgiving them and letting companies defer payments. And the audit called for the agency to provide “clear, accurate and complete information on program outcomes.”
Chrisman did, however, point to several improvements WEDC has made in past audits, most notably in how it manages its money, an area in which the LAB had criticized the agency in a past audit. In their testimony, WEDC officials outlined a timeline of “milestones” in internal reforms of the agency, including the more than 100 policies the agency developed after a 2013 audit and its boosting of background checks the agency conducts.
“I’m confident we are poised to become an organization you will be proud of to be your economic development agent,” WEDC Board Chairman Dan Ariens told the committee.
During the hearing, WEDC officials pointed to an upcoming announcement that a Fortune 200 company would open a facility in Wisconsin.
That company, WEDC announced in a news release later, is Dollar General Corp., which plans to open a $75 million distribution center in Janesville if the city council approves a financing deal.
The facility is expected to bring 552 new jobs by 2019, with the jobs paying an average starting wage of $15.57 per hour.
WEDC noted that the company chose Wisconsin — rather than two other Midwest states — because state and local officials “produced an incentive package that ultimately” drew them to the state. That package includes a potential $5.5 million in tax credits from WEDC until 2019.
— By Polo Rocha
WisBusiness.com
