Audit Finds State Job Creation Agency Wrote Off Many Bad Loans

WEDC Wrote Off Almost 20 Bad Loans Over 6-Month Period


A state audit of the Wisconsin Economic Development Corporation, the state’s main job creation agency, suggests that the corporation made fewer bad loans because many were written off.

WEDC uses tax dollars to give grants and loans to Wisconsin companies in an effort to create jobs. The report by the Legislative Audit Bureau shows that there were 49 potentially uncollectible loans worth $13 million last June, but that six months later that had dropped substantially to only 30 bad loans worth $5.5 million. The audit found that most of the decrease was due to deferred payments, or to the agency shifting past due loans to the Department of Administration.

The finding concerns state Rep. Samantha Kerkman, R-Salem, the chairwoman of the Legislature’s audit committee. She said the report provides a roadmap for WEDC as it continues efforts to improve.

Stay informed on the latest news

Sign up for WPR’s email newsletter.

This field is for validation purposes and should be left unchanged.

“In the next 24 months down here in Kenosha, we’re going to be adding about 4,200 jobs locally,” she said. “Some of those jobs are coming because of programs within WEDC. It’s very exciting. So I need WEDC to be in tip-top shape so we can continue to bring those jobs to Wisconsin.”

Auditors recommend that WEDC establish goals for determining delinquency rates. The current system tallies up loan payments 90 days or more past due, and does not look at the entire loan balance. For this reason, auditors say it is limited as a measure of risk of uncollectible loans.

WEDC CEO Reed Hall wrote in a statement that WEDC has already implemented some of the audit recommendations:

“Today’s LAB audit highlights the significant progress WEDC has made in reforming its internal fiscal controls, processes and procedures while fulfilling its mission of working with businesses and communities to create jobs and grow Wisconsin’s economy. We remain committed to full transparency and accountability in all aspects of our operations.”