EAU CLAIRE, Wis. (WEAU) – Governor Scott Walker was in the Chippewa Valley Tuesday, discussing a recent report which found big financial problems in the state’s top jobs agency.
The Wisconsin Economic Development Corporation held its meeting at the Marshfield Clinic in Eau Claire.
Gov. Walker created the organization to help create 250,000 jobs in his first term.
But a new audit has found deep financial troubles in the agency.
Hot topics usually reserved for Madison were brought to the area for the meeting.
The WEDC heard from the auditing firm that found the organization was plagued by sloppy accounting practices, poor monitoring of loans and understaffing.
“If any private business had operated this way it probably would have been out of business by now,” said State Rep. Peter Barca, the Assembly Minority Leader.
Reports indicate the audit by Schenck SC found the agency failed to keep track of more than $50 million dollars in loans, including $12 million in overdue loans.
Auditors also found that $19 million of those loans will most likely not be collected.
“There's a lot of dedication to programs, but there wasn't enough dedication to fundamental accounting principles,” said Reed Hall, the WEDC’s Interim Executive Director.
Gov. Walker replaced the Department of Commerce with the public-private agency in July 2011.
Hall said part of the problems stem from that transition, where a massive amount of employees were lost.
“The important thing is that everyone knows that we're fixing it and have a good operation going forward,” Hall said.
Assembly Minority Leader Peter Barca is one of the board members.
While the democrat said there's no evidence yet of fraud or embezzlement, those things are concerns when you're working with millions in public funds.
It's quite remarkable in many respects that anybody thought that this could work without any significant planning taking place. Nobody would start a business without a business plan,” Barca said.
In an interview with WEAU 13 News, Walker said that until several months ago, his administration wasn’t aware of any problems.
He blamed a lot of the money troubles on the agency’s previous management.
“They were tied into management back office oversight issues which are obviously very important but they weren't affecting the ability to create jobs on a state-wide basis. In fact, what we reaffirmed today again is that the staff involved in job creation, economic development projects was doing an exceptional job. They were far out-pacing some of the expectations we’ve had over the last couple years,” Gov. Walker said.
Gov. Walker said fixes to the financial problems are already being put into place.
There are still other audits in the works.
MADISON, Wis. (AP) -- A new independent review of Wisconsin's quasi-private agency charged with leading economic development activities says considerable work needs to be done to fix operational problems that largely stem from the agency's hasty creation last year.
The Wisconsin Economic Development Corp. board received the report Tuesday.
Financial Institution Products Corp., a subsidiary of the Wisconsin Bankers Association, performed the review in the wake of a series of missteps at the agency created in July 2011 to replace the Department of Commerce.
The report says WEDC started with an incomplete infrastructure without a defined set of management reports and policies.
It also says issues at WEDC have been exacerbated by multiple turnovers in senior positions.
The report says that all of the issues presented ought to be able to be resolved.
MADISON, Wis. (AP) -- The quasi-private board charged with creating jobs in Wisconsin is meeting to discuss a highly critical audit of its first year in operation.
The Wisconsin Economic Development Corp. board meeting Tuesday in Eau Claire comes the day after an audit by accounting firm Schenck SC cited numerous problems with the new agency including sloppy bookkeeping, poor accounting practices and critical staff vacancies.
The board was receiving a second independent report looking at its Tuesday meeting by Financial Institution Products Corp. That subsidiary of the Wisconsin Bankers Association was looking at the operations of WEDC and what improvements could be made.
Creating WEDC to replace the Commerce Department in July 2011 was one of Gov. Scott Walker's top priorities.