An independent audit said high staff turnover, poor record keeping and a lack of basic accounting controls all contributed to problems in the first year of Wisconsin's premiere job-creation agency.
The draft audit released Monday looked at the first year of operations of the semi-private Wisconsin Economic Development Corp.
The agency has been beset with a series of problems, including not properly tracking $56 million in loans to businesses. Borrowers have fallen behind on payments on loans now worth more than $12 million.
The audit by Schneck SC said basic internal accounting controls over the loans were not in place. It also said loan agreements did not always contain approved staff or performance reviews.
WEDC officials said steps are being taken to improve operations.
WEDC, in announcing the hiring of independent auditors, blamed some mistakes on a loss of personnel. The auditors agreed that was a factor.
"This isn't what we hoped to find, but it's not unexpected when you go from 300 employees to 50 as a new agency," said WEDC interim CEO Reed Hall. "We're all looking to make sure this is corrected so we can go on to write new chapters of history at the agency."
Rep. Peter Barca, D-Kenosha, said the audit shows that the decision to transform the state Department of Commerce into WEDC "without any real planning is a huge problem."
The audit was also to be discussed at a full WEDC board meeting on Tuesday in Eau Claire.