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WisDOT grant program gets failing grade

The big green arrow on the Wisconsin Department of Transportation’s website shouts “success” for the agency’s grant program.

The symbol key on the page, though, rains on the celebration. The arrow means WisDOT’s “performance is trending in a favorable direction” in its efforts to ensure that Transportation and Economic Assistance grants are delivering the required results.

WisDOT gives the grants to local governments for roads, railways or other transportation projects that lead to a specific company’s adding jobs. In exchange, the local government promises WisDOT the company will add a certain number of jobs within three years of receiving the money and will retain those jobs for another four years.

If the company fails to fulfill the jobs promise, WisDOT can recoup all or part of the grant money from the local government. The system is set up that way because it is easier to take the grant money from a community than from a business that has gone bust.

It is a straightforward deal, but only if you happen to be in government (state or local).

WisDOT, by extracting promises from local governments, needs a system to monitor the progress in adding jobs. The agency’s solution is to receive annual reports, sometimes from the local government and sometimes from the company, depending on the wording in the grant contract.

A 2012 audit by the Legislative Audit Bureau found WisDOT had collected only 54 percent of the jobs reports it should have from 2007 to 2011. A Wisconsin Economic Development Corp. audit published in October found that 87 percent of the reports WisDOT was supposed to collect were submitted.

WisDOT can call that a trend toward accountability, but the agency is overlooking the larger problem: No one can say for sure whether those reports are accurate.

Because WisDOT lets that part of the program operate on the honor system, the agency should replace that big green arrow with a big yellow escape hatch from accountability. Officially, the agency trusts that companies or local governments are honest, even though a small-budget village could be required to pay back to the state hundreds of thousands of dollars if the company benefiting from the grant falls short of the job-addition goal.

Sometimes bureaucrats prefer not to know that their good intentions came to a bad end. “Job growth” makes for a better press release headline than “WisDOT takes back money from small village.”

There are excuses for why the honor system is the only option. WisDOT certainly does not have the manpower to conduct an in-person yearly head count at every company that benefits from the grants.

The agency also claims it tried, then ruled out, using official payroll data from the state Department of Workforce Development. The DWD receives payroll records from every company for the purposes of collecting taxes for unemployment benefits. WisDOT argues the numbers are not always specific enough.

But those excuses avoid the fact that if WisDOT cannot prove the grants work, it should not be running the program.

WisDOT wants the taxpayers, who pay for the grants, to adopt the honor system, to trust WisDOT just as WisDOT trusts the local governments, which trust the companies benefiting from the grants. WisDOT gave itself a big green arrow, so it must be worthy of the public’s trust.

If it is an A for effort that WisDOT wants, it can have it on a curve set by the worst cases of agencies fumbling grant money. But when grading accountability in how government spends taxpayers’ money, “trending” is just another word for “failure.”

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