The Wisconsin Economic Development Corp. has hired an outside agency and an accounting firm to review its processes after it lost track of loans totaling about $12 million. According to a report in the Wisconsin State Journal, Reed Hall and Ryan Murray, the interim secretary and deputy secretary, admitted the company did not place proper emphasis on the agency’s loan tracking capabilities when the company was quickly formed from the old Dept. of Commerce (DOC) in July 2011. When that occurred, what once was a DOC staff of 300 was slashed to just 50 WEDC employees (most transferred to other state agencies, others retired). WEDC now has about 90 employees.
According to the WSJ report, as of Nov. 2, there were 64 overdue loans with past due amounts of $2.5 million on loans with principal balances of $12.2 million. WEDC is currently contacting customers and arranging payment schedules. The oversight cost Chief Financial Officer Mike Klonsinski his job. Klonsinski submitted his resignation in October.
The Financial Institution Products Corp. (FIPCO), a subsidiary of the Wisconsin Bankers Association, and Schenck, SC accounting of Appleton have since been hired to review the agency’s processes and financial policies and to suggest risk-control steps and tips for avoiding future missteps.
