Miscalculation causes WEDC to pay more in tax credits than compa - WKOW 27: Madison, WI Breaking News, Weather and Sports

Miscalculation causes WEDC to pay more in tax credits than companies actually earned

Posted: Updated:

MADISON (WKOW) -- The early findings of an internal review being conducted by the Wisconsin Economic Development Corporation (WEDC) show the agency overpaid companies for $412,195 worth of tax credits they never earned, a number that is expected to rise.

In April, WEDC officials told members of their board they had uncovered a discrepancy in how they calculated tax credits and would be reviewing 222 different awards that had already been handed out to companies since 2006, dating back to the former Wisconsin Department of Commerce.

In a memo sent to board members Thursday, WEDC Secretary Mark Hogan said the discrepancy relates to how full-time jobs were calculated when determining how much to award in tax credits. Hogan indicated the most common reason for discrepancies came from how mid-year hires were counted in the verification process.

As of Thursday, 18 of the 222 awards have been fully reviewed with WEDC officials finding the $412,195 in overpayments.

The final total is expected to be well into the millions of dollars.
"It's troubling from a couple of perspectives - one that the taxpayers are on the hook and will not be able to recover monies that never should have been awarded - but secondly, even for companies that will now be asked to repay this amount of money that was paid out to them through no fault of their own," said Rep. Peter Barca (D-Kenosha), a WEDC Board member who has been critical of the agency's management.

Secretary Hogan indicated none of the 18 companies that received the overpayments have been notified yet and indicated any notifications must be handled carefully.

"Specific contracts may be discussed in Closed Session because this review and our corrective action may trigger litigation risks and we will discuss our legal strategy for handling this possibility," wrote Hogan.

In a statement to 27 News, a WEDC spokesperson said the memo shows the agency is making progress in identifying the problem.

"WEDC's goal is to continuously improve as stewards of taxpayer dollars and we are proactively reviewing and transparently self-identifying any adjustments to past verifications," wrote WEDC Communications Specialist Steven Michels.

Powered by Frankly