Evaluating incentive programs - governance and controls

| Posted in economic development, incentives, transparency | | No Comments

The report on the Wisconsin Economic Development Corporation (WEDC) released by the State’s Legislative Audit Bureau (LAB) earlier this month has been called scathing and a “punch in the face.”  Here is an excerpt:

WEDC did not have sufficient policies, including some that are statutorily required, to administer its programs effectively. We found that WEDC awarded some grants, loans, and tax credits to ineligible recipients, for ineligible projects, and for amounts that exceeded specified limits. In addition, WEDC did not consistently perform statutorily required program oversight duties, such as monitoring the contractually specified performance of award recipients, and could report more clearly on the number of jobs created and retained as a result of its programs.


And that’s just the cover letter.

There are clearly big problems at WEDC, and most appear to be serious governance and internal control issues.  The report provides tremendous value in describing these issues, but it is less clear if there are problems within the incentive programs per se.

A substantial number of awardees have not bothered to submit required reports in order to determine overall compliance.  Nor was submitted information independently verified. Nor have performance requirements been consistently and clearly applied within and across programs. 

Last month I wrote that trust, collaboration and good data are necessary for high quality evaluations of economic development programs.  I’d say these qualities are lacking in Wisconsin right now.

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