By M.D. Kittle
MADISON —The Evers administration wrongly issued hundreds of thousands of dollars in business grants based on changed eligibility requirements, according to the latest state audit of the billions of dollars in federal COVID relief Evers has spent at his discretion.
DOR handed out a total of $595.9 million in grants from the programs to small businesses, restaurants and lodging establishments. The programs were intended to assist Wisconsin businesses that experienced economic damages during the pandemic and Evers’ stay-at-home orders that closed or severely limited untold “non-essential” businesses.
The audit found the Department of Revenue failed to follow its written eligibility requirements in awarding 45 grants totalling $475,000. That’s 26 percent of the 172 program grants under review, and nearly 12 percent of the $4.1 million in awards examined in the limited scope audit.
“Written eligibility requirements for program grants were specified in DOR’s supplemental federal funding agreements with the (Wisconsin) Department of Administration and additional written requirements that DOR developed. “DOR at times adjusted the eligibility requirements and awarded grants to additional businesses that met these adjusted requirements,” the audit states.
But those weren’t the same rules other grant requesters had to play by.
Revenue officials told auditors that the agency adjusted the eligibility requirements in order to meet the needs of businesses that had experienced economic damages as a result of the public health emergency. But the agency did so without modifying the existing agreements with the Department of Administration or modify the written eligibility requirements it developed to reflect the adjustments.
The report doesn’t make clear just what businesses benefitted from Revenue’s adjustments. Auditors reviewed just a fraction of the program grants — 172 totaling $4.1 million.
State Sen. Rob Cowles (R-Green Bay), who co-chairs the Joint Legislative Audit Committee, noted the Audit Bureau’s questions caused DOR to backtrack and recoup some funds that should not have been allocated. How much is not clear, and likely won’t be until the committee holds a hearing into the matter.
“My point is, if they hadn’t been asking the questions there would have been more of a problem,” Cowles told Empower Wisconsin.
The audit notes that the Department of Revenue has undertaken certain program integrity efforts to identify fraudulent grant applications and recover grants awarded inappropriately. And DOR officials told auditors they anticipated undertaking additional efforts to identify and recover such grants.
As Cowles noted, the Department of Revenue doesn’t have experience running such grant programs.
“Somehow it ended up at DOR. We don’t know how that happened,” the senator said.
The audit bureau recommends the agency recover the erroneously awarded grants and report to the Joint Legislative Audit Committee by Feb. 15 on the status of those efforts.
This is the latest in a series of state audits conducted on the $2 billion-plus in federal COVID relief funds Evers has effectively been able to distribute at his discretion. In September, the Audit Bureau raised concerns about oversight of providers that received millions of dollars in broadband expansion grants.
Cowles said he’s hopeful the audit committee will be able to soon hold a hearing into the latest audits to get some more answers.
“Hopefully this sends a message to other agencies that you have to get your act together or this is something we’re going to catch you on and embarrass you,” the senator said.
Empower Wisconsin | Nov. 30, 2022