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Audit: WEDC Still Not Tracking Job Creation

But The Legislative Audit Bureau Says Wisconsin's Economic Development Agency Made Improvements Elsewhere

(WPR)---Wisconsin’s economic development agency has improved its grant and loan program, but it still isn’t tracking whether its awards create or retain jobs, according to a new audit released Wednesday.

The report from the nonpartisan Legislative Audit Bureau was the latest in a string of audits that have found issues with job tracking at the Wisconsin Economic Development Corporation, known as WEDC, a quasi-private agency that receives most of its funding from taxpayers.

Wednesday's audit marked an improvement for WEDC compared to a 2015 audit that found the agency was not following state laws when it awarded grants, but the lack of job tracking remained a lingering problem.

"A cloud will continue (to) remain over the agency until they can accurately verify data being received from award recipients," said Sen. Robert Cowles, R-Green Bay, the co-chair of the Legislature's audit committee. "While WEDC has significantly improved in several areas relating to the administration of its programs, Wisconsin needs to have a precise understanding as to which programs are most beneficial to our economy."

The other co-chair of the audit committee, Rep. Samantha Kerkman, R-Powers Lake, was less critical of WEDC.

"A strict accounting of jobs created or retained is not the only yardstick by which to measure the success of economic development programs," Kerkman said.

The audit found WEDC failed to track job creation in a variety of ways.

It did not require grant and loan recipients to submit detailed information on how many jobs they add or retain, or what those jobs pay.

WEDC also failed to collect detailed information from grant recipients about their current employees, information that would provide a baseline to measure future employment growth at a business.

Auditors also found WEDC did not annually verify the jobs-related information it was given.

WEDC seized on the report's positive findings, namely that the agency had adopted several recommendations made by the audit bureau two years ago.

"Striving to achieve operational excellence through continuous process improvement efforts has increasingly defined who we are as an organization as WEDC is committed to providing the highest levels of transparency and accountability," WEDC CEO Mark Hogan said.

Assembly Democratic Minority Leader Peter Barca, of Kenosha, who sits on the WEDC Board, said he also appreciated the improvements, but more needed to be done.

"WEDC was created to be the lead job-creation agency of the state," Barca said. "There's nothing more fundamental than insuring that we analyze the impact of each of the various programs to determine which ones are working and which ones aren't working."

In addition to issues with job tracking, the Legislative Audit Bureau found WEDC's balance of potentially uncollectible loans with repayments 90 days or more past due had increased from $1.3 million at the end of 2014 to $11 million by the end of 2016.

The audit comes roughly a week after Republicans on the Legislature's budget committee voted to reauthorize WEDC's loan program. It was suspended after the 2015 audit found the agency had troubles tracking its loans.

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