Legislative Audit Bureau: Audit Shows Need for Better Oversight of Economic Development Programs

(Madison)  Today, the nonpartisan Legislative Audit Bureau (LAB) released a comprehensive review of the State’s economic development programs.  LAB identified 152 programs that provided financial assistance and direct services to businesses, individuals, local governments, nonprofits, and other organizations from fiscal year (FY) 2001-02 through FY 2004-05.  During this period, these programs awarded $180.9 million in grants and loans, $56.3 million in targeted tax credits, $240.4 million in bonding authorization, and $64.4 million in loan guarantees.  As of June 30, 2005, LAB estimates that state agencies were authorized at least 247.9 full-time equivalent staff for the administration of these economic development programs.

“The critical need for accountability is the overriding message of this audit,” stated Representative Suzanne Jeskewitz (R-Menomonee Falls). “We need to collaborate with state agencies, the University System, and the Wisconsin Technical College System to design consistent criteria for grant and loan eligibility in an effort to eliminate duplication and develop a more efficient and effective way of delivering these services.”

LAB identified a large number of programs that provide similar services.  While some program duplication may be desirable to ensure that services are available statewide, as the auditors note, duplication increases administrative costs and may hinder the efforts of the Legislature to provide adequate oversight.  LAB found that agency responsibility for economic development programs is fragmented, efforts to measure and report results are limited, and no single entity is responsible for ensuring that the programs are working toward common policy goals. 

“This audit provides a blueprint for reform of economic development programs.  LAB outlined numerous specific recommendations to increase accountability, improve coordination, and consolidate agency reporting requirements. My co-chair and I look forward to working with our colleagues on the Joint Legislative Audit Committee to advance legislation that addresses the concerns noted in the audit,” stated Senator Carol Roessler (R-Oshkosh).

Co-chairs Jeskewitz and Roessler will hold a hearing on the audit report on Tuesday, August 29th, in Madison.  Interested members of the public are invited to testify before the Joint Legislative Audit Committee at that time.  Copies of the audit may be obtained from the Legislative Audit Bureau’s Web site at www.legis.state.wi.us/lab or by calling (608) 266-2818 to request a copy of report 06-9.  A copy of the public hearing notice, which provides additional detail about the time and location of the August 29th hearing, will be available on the Web site at a future date.