At their most recent meeting, the Wisconsin Economic Development Corporation (WEDC) board of directors approved an operations plan and budget for fiscal year 2014, and adopted 101 new policies and procedures to ensure the pseudo-agency complies with all state laws. At that same meeting, Gov. Walker, who also serves as chairman of the WEDC board, signed into law a bill that requires WEDC employees and board members to comply with many of the same ethics rules as other state agency employees.

FY 2014

The plan and budget adopted by the board detail WEDC’s plan to encourage business growth in Wisconsin in the upcoming year. Among the initiatives detailed in WEDC’s operations plan are the following deliverables:

Economic Development Tools

WEDC will deploy Salesforce, a powerful customer relationship management (CRM) solution across the state’s economic development network to facilitate real-time data sharing and foster collaboration among partner organizations working collectively to retain and expand Wisconsin businesses.

The agency will also introduce a more user-friendly searchable database to track its investments. This online reporting tool will feature more complete award outcome information than is currently featured and an interactive map that allows users to filter data according to a geographic, industry, program and other parameters.

Minority Business Development

WEDC’s FY14 plan calls for full activation of four minority business revolving loan funds through minority chambers of commerce in Wisconsin and extends needed technical assistance to effectively activate these funds.

Community Development

WEDC is introducing two new programs to increase the resources available to redevelop Wisconsin’s downtowns and industrial sites. The Idle Industrial Sites Redevelopment Program offers grants to Wisconsin communities for implementation of redevelopment plans for large industrial sites that have been idle, abandoned or underutilized for a period of at least five years. The Community Development Investment Grant Program will support urban, small city and rural community development efforts by providing financial incentives for shovel-ready projects.

Entrepreneurism

WEDC’s support for entrepreneurs is demonstrated in its continued financial commitment through WEDC investment programs and partner organizations. Partners such as the Wisconsin Women’s Business Initiative Corporation and the Center for Technology Commercialization provide a statewide network of resources and expertise with the goal of helping high-potential new businesses, including minority-owned business, move forward. WEDC also aims to increase startup activity by expanding its Seed Accelerator Program, which implements innovative business modeling, financing and mentoring. Investment capital for Wisconsin startups and emerging growth companies is supported through the Qualified New Business Venture tax credit program and WEDC’s Capital Catalyst Program, which co-invests in seed financing to provide critically-needed capital to advance startups and innovative businesses. WEDC will also enhance collaborative efforts with the University of Wisconsin System, including partnering with the University of Wisconsin-Madison and pursuing funding for commercialization activities throughout the state.

Global Business Development

WEDC will plan and execute six trade ventures designed to match Wisconsin companies with international business opportunities in priority markets around the world. In addition to collaborative international business development trips such as the Midwest U.S.-Japan Conference in Tokyo, WEDC is planning international trade ventures include Columbia, Chile and Brazil; Russia, Poland and the Czech Republic; Asia (Inbound); Singapore and Indonesia; United Arab Emirates and Saudi Arabia; and India.

Industry Advancement

WEDC will also help address Wisconsin’s skills gap challenges with high-impact workforce development pilot programs deployed statewide and the implementation of a workforce retention/layoff aversion initiative coordinated with Workforce Development Boards throughout the state.

WEDC will continue to make strategic investments in targeted industry development to promote industry growth, employment growth and new business creation in priority industry sectors that have the most promising potential for short-term and long-term positive economic impact.

Marketing

With legislative approval, WEDC also plans to increase efforts to market Wisconsin’s business climate to company leaders looking to start, grow or relocate their operations here.

New Accountability Measures

WEDC also presented an update to the board on accountability measures the organization has adopted to address weaknesses in its financial controls and operations identified in the Legislative Audit Bureau’s (LAB’s) May 2013 Report; the LAB’s Single Audit (FY 2011-12); the 2013-15 State Budget; Financial Institutions Products Corporation (FIPCO) December 2012 Review; and the June 2012 Schenck Audit:

ORGANIZATIONAL IMPROVEMENTS

Finance

• Stephanie Walker joined WEDC as chief financial officer in June 2013.
• Credit and Risk Vice President Jake Kuester hired in April 2013. New division centralizes risk management function.

Compliance

• Reorganized compliance functions under the organization’s legal services department. Chief legal counsel serves as compliance officer, reporting to CEO. Staffing has  expanded to include staff counsel, program-focused compliance personnel, and a risk manager charged with internal audits of WEDC policies.

POLICY DEVELOPMENT

• Board approval of 101 systems policies designed to provide clarity on organizational standard practices reflective of WEDC’s mission, operating structure and governance framework.
• Committee formed to develop and review needed policies according to a new Policy Development and Approval Policy.
• Comprehensive process implemented for drafting, reviewing and approving all of the guidelines directing the administration of WEDC’s programs.

PROCESS IMPROVEMENTS

Financial Awards

• Created checklists of the statutory and policy requirements governing each program to be used with each award contract.
• Adopted an Awards Administration Policy that covers the organization’s underwriting guidelines, approval processes and requirements for administering WEDC’s award programs.

Required Reports from Award Recipients

• Adopted a comprehensive internal systems policy for tracking whether award recipients have submitted required performance reports and detailing the required follow-up actions when reports are not submitted on time.
• Created and filled the position of business analyst to oversee the implementation of this new policy to ensure timely and accurate performance reporting.
• Adopted a comprehensive Internal Audit Policy requiring regular reviews and audits of performance reports to ensure accuracy and compliance with statutory requirements.

Collections

• Formalized collections process as part of its policy development and deployment project.
• Contacted every company on its delinquency list and updated its status.
• LAB requested that WEDC’s governing board report to the Joint Legislative Audit Committee by October 1, 2013, on the status of all outstanding economic development loans for which it was responsible from January 2013 through September 2013, including the number and outstanding balance of loans it referred to the Department of Justice for collection proceedings, and the number and outstanding balance of loans it has written off.
• Will report to Joint Legislative Audit Committee by October 1, 2013, on the status of all outstanding economic development loans for which WEDC was responsible from January 2013 through September 2013, including the number and outstanding balance of loans WEDC has referred to the Department of Justice for collection proceedings and the number and outstanding balance of loans the agency has written off.

Procurement

• Developed and implemented a robust Procurement Policy which details vendor selection requirements and approvals needed for various expenditure levels.

Financial Management

• Finance team now reviews expenditures monthly for proper monitoring.
• Finance also works closely with all divisions to reconcile account balances and keep divisions informed of those balances.
• Presented to WEDC Board a comprehensive FY14 budget with funds allocated both by division and by program.
• Each quarter, WEDC will present its Board for review updated financials, including actual spending and forecasted spending compared to budgeted amounts.
• Budget amendments transferring funds from one division to another or from one program to another are now brought to the Board for approval.

Employee Purchasing

• With reference to WEDC’s use of credit cards to purchase iTunes gift cards, these were needed for the organization’s IT staff to activate employee iPads. The actual purpose of  the purchases was not suspect; rather, the documented reason for them was lacking.
• Cancelled credit cards for 17 staff deemed to have insufficient need and adopted a revised procedure for issuing credit cards to staff to address these issues.
• Adopted a Travel and Expense Reimbursement Policy and trained management and staff extensively on this policy to ensure proper documentation of business expenses.
• Contrary to reporting on this issue, WEDC is not prohibited from purchasing alcohol with state funds, though such purchases do need to be made in conjunction with hosted  business development events. WEDC will continue to enforce this policy.

Gifts/Code of Ethics

• Implemented a policy on accepting and tracking items of value. This policy was presented to the organization’s board July 23, 2013.
• Implemented personnel policies in accordance with the new statutory requirement regarding state ethics law compliance.
• All staff have been trained by the Government Accountability Board on state ethics laws.

IT IMPROVEMENTS

• After extensive research and systems comparisons, WEDC has decided to replace the Department of Commerce’s outdated financial software with sophisticated technology designed to manage contract requirements relating to the agency’s specific financial assistance programs.
• A request for proposals (RFP) was issued in June to financial software companies to identify the best information technology solution to meet WEDC’s, tracking, reporting, and collections objectives. RFP responses are currently being reviewed with vendor selection anticipated in August.

BOARD INVOLVEMENT

• Created three new Board Committees—Awards Administration; Policy; and Contracts— all of which held their inaugural meetings in July 2013
• In addition to board members, these committees also include expert industry representatives suggested to WEDC by the deans of the University of WisconsinMadison Law School and Business School.

The WEDC board formally adopted the procedures and policies governing these initiatives at its meeting.

Ethics Bill Signed Into Law

At the WEDC board meeting, Gov. Walker, who is also chairman of the WEDC board, signed 2013 Wisconsin Act 43 into law. The new law imposes many of the same ethics requirements other agency employees must follow on WEDC board members and employees.

Board members and employees must now:

• Notify WEDC’s legal counsel if they have a controlling interest in an entity negotiating, bidding for, or entering into a contract with the WEDC.
• Prohibits any board member or employee with a private financial interest in a control from participating in the making of the contract or to exercise an official function that requires the exercise of discretion in regard to the contract.
• Prohibits the WEDC from entering into any contract with an entity in which a board member or employee has a controlling interest.

Act 43 passed on a bipartisan vote of 80-15 in the Assembly and the Senate on a voice vote.