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State Economic Development Programs |
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June 2012 | |
Report Highlights | |
The State’s economic development programs are intended to retain and
attract businesses, create jobs, or otherwise encourage economic growth.
The Department of Commerce and the departments of Agriculture, Trade
and Consumer Protection (DATCP), Natural Resources (DNR), Tourism,
and Transportation (DOT); the University of Wisconsin (UW) System; the
Wisconsin Housing and Economic Development Authority (WHEDA);
and the Wisconsin Technical College System (WTCS) administered
196 economic development programs at some point during the
In response to the findings and recommendations in our 2006 review
of state economic development programs (report 06-9), 2007 Wisconsin
Act 125 defined economic development programs, required agencies to
report publicly on program results, and required us to complete another
review of the State’s economic development programs by
In July 2011, Commerce was abolished and the Wisconsin Economic Development Corporation (WEDC) became the State’s lead economic development organization. Insufficient time has passed since WEDC’s creation for us to assess its administration of economic development programs. However, as required by statutes, we will assess WEDC’s financial management and evaluate its programs in 2013.
Economic Development Programs
At some point during the
These 196 economic development programs typically assisted multiple types of recipients, including 171 programs that assisted businesses or individuals, 69 programs that assisted nonprofits or other organizations, and 48 programs that assisted local governments. As of June 2011, the last month of our review period, 139 economic development programs existed.
In the
Financial Assistance
During the
Seven state agencies awarded
During the
Under tax incentive programs,
Commerce and DATCP allocated
tax credits to businesses and
individuals who contractually
agreed to complete projects.
Development zone programs were
intended to encourage economic
development in specific geographic
areas, while early-stage investment
tax credit programs were intended
to increase funding for new
businesses. After an agency verified
that projects were completed,
businesses and individuals were
given a specified number of years
to claim the awarded tax credits
against their income taxes. In 2007
and 2008,
Program Results
and Accountability
2007 Wisconsin Act 125 required the eight agencies to measure the effectiveness of economic development programs and report publicly on results. We evaluated agency compliance with the requirements of Act 125 and identified concerns with the completeness of information that the eight agencies tracked and reported.
Act 125 required the eight state
agencies to develop goals and
accountability measures for each
economic development program.
The eight agencies provided us
with information on the results
of 101 of the 123 programs that
were active at some point during
the Act 125 required each of the eight state agencies to establish rules for overseeing recipients of grants and loans. As of May 2012, only Commerce and DOT had established the rules.
To obtain additional information on
program effectiveness, we reviewed
the files for 113 grants and loans
totaling Act 125 also required Commerce to collaborate with the other seven agencies to report publicly by October 1 of each year on each economic development program they administered. The reports were to include such information as quantifiable performance measures and expected and actual program outcomes.
The October 2010 report included
information on slightly more
than two-thirds of the programs
we identified as having been
administered by the agencies in
fiscal year (FY) To improve accountability and achieve compliance with the requirements of Act 125, more complete information about program results is needed. Agency managers also need information about program effectiveness to better manage the programs they administer. Statutes require seven state agencies to consult with WEDC when they develop goals and accountability measures for each of their economic development programs. As the State’s lead economic development organization, WEDC should use its expertise to provide the seven state agencies with such guidance.
Recommendations
We include recommendations for WEDC to:
We include a recommendation for
WEDC, DATCP, DNR, Tourism,
DOT, UW System, WHEDA, and
WTCS to ensure that accurate and
complete information on program
outcomes is included in the annual
economic development reports
We include a recommendation for
each state agency administering an
economic development program
that awards grants or loans to
comply with statutes and annually
verify the performance measure
information reported by the
recipients of a sample of grants
and loans
We include a recommendation for
each state agency administering
an economic development
program that awards grants, loans,
or tax benefits either to comply
with statutes and establish rules
that allow it to recoup payments,
withhold payments, and impose
forfeitures on award recipients, or
report to the Joint Legislative Audit
Committee by
We include a recommendation for
each state agency administering an
economic development program
that awards grants or loans either
to comply with statutes and
establish rules that require it to
contractually require recipients
of awards of at least $100,000
to submit verified financial
statements, or report to the Joint
Legislative Audit Committee by
We include a recommendation
for the Legislature to consider
modifying |
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