When the Wisconsin Economic Development Corporation was established in July 2011, its primary mission was clear: Respond quickly to the needs of the business community by working hand-in-hand with companies, economic development organizations and other partners to help grow Wisconsin’s economy and create jobs.
The organization developed a bold and innovative approach to helping businesses seeking to start, grow or relocate in Wisconsin. Since its inception, WEDC has worked with more than 1,000 companies in every corner of the state on projects expected to create or retain more than 93,000 direct jobs. Beyond the immediate job impact, WEDC also has worked with its key partners in industries such as energy, manufacturing and water technology to take a strategic approach to addressing issues and pursing opportunities in those industries.
One of those partners is The Water Council in Milwaukee, which has received international acclaim for its leading role in water technology. Dean Amhaus, president of the council, notes that WEDC played a vital role in the success of the new Global Water Center by taking “bold steps to create new approaches and procedures that break the mold. It was WEDC’s ability to be inventive and flexible with its programs and services that enabled the Global Water Center and the BREW to get underway and now flourish.”
There have been lessons learned along the way. WEDC’s first state audit – released in May 2013 – documented our need for better systems to track loans, oversee expenditures and monitor the performance of award recipients. After that audit, we have implemented significant changes to rebuild accountability, transparency and public trust in its operations.
As a result of our efforts, our loan delinquency rate dropped from 2.7 percent in 2013 to 0.2 percent in 2014. The uncollectable loan balance declined from $5.5 million in 2013 to $1.3 million in 2014, and the percentage of performance reports that are late fell from 55 percent to 5.4 percent in two years.
The improvements we’ve made aren’t going unnoticed. In April 2014, WEDC received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association of the United States and Canada (GFOA), the highest form of recognition in governmental financial reporting.
On Friday, the Legislative Audit Bureau (LAB) released its latest full audit of WEDC. The audit contains more than two dozen recommendations that will be reviewed carefully by WEDC staff and our board as we work to continue improve our operations.
While the new audit highlights some of WEDC’s improvements, it also raises some issues about WEDC that require clarification. For example, one of WEDC’s core missions it to work with businesses to help create and retain jobs. We want to ensure the public that efforts are having a measurable, positive effect and actually growing jobs in the state. That’s why we have implemented stringent measures that include requiring companies to provide detailed payrolls records and a signed attestation to verify their job creation and retention figures.
WEDC consistently follows state statutes and its own policies. Some of the main issues raised in this area are a result of differences in opinion between WEDC and LAB about how the organization administers its contracts. For example, LAB noted that WEDC contracts use the word “may” instead of “shall,” even though the same audit noted that the word “shall” does not in any way affect WEDC’s legal ability to enforce the contract.
WEDC staff and the board will continue to review its operations and determine whether additional measures are needed in this area.
We firmly believe that we are balancing our ability to be responsive to the needs of business while being careful, responsible stewards of taxpayers’ dollars. We are continuously looking at ways in which we can improve our processes or increase productivity, and we welcome the recommendations in this audit as another tool in that ongoing evaluation.
Reed Hall is secretary and chief executive officer of the Wisconsin Economic Development Corporation.
