Wisconsin Legislative Audit Finds Waste in 2 COVID Grant Programs

A sign on the front door of a business spells out new rules for customers in Elkhorn, Wis., on May 15, 2020. (Scott Olson/Getty Images)

The nonpartisan Legislative Audit Bureau (LAB) released a limited review (pdf) of two programs that used supplemental federal funding intended to assist Wisconsin businesses that were negatively affected due to forced COVID lockdowns.

The Department of Revenue (DOR) awarded $595.9 million in grants to businesses grants through its “We’re All In” and “Wisconsin Tomorrow” programs. These were supported by supplemental federal funds provided through the Coronavirus Aid, Relief, and Economic Security (CARES) Act and the American Rescue Plan Act (ARPA).

The report confirmed that the state handed out money to ineligible businesses.

The Audit Bureau also reviewed 87 “We’re All In” program grants totaling $805,000 and found 25 ineligible grants. Twenty out of 85 “Wisconsin Tomorrow” grants that were also reviewed were found to be ineligible.

LAB also reviewed “172 program grants totaling $4.1 million [and] found that DOR did not follow the written eligibility requirements for 45 grants totaling $475,000,” auditors stated in their report. However, the report goes on to state that only 0.2 percent of the 135,000 total grants were reviewed, not a statistically representative sample.

“Because our review is not based on a randomly selected and statistically valid sample of grants,” the report states, “it is not appropriate to extrapolate the results of our review to all grants that DOR awarded.” Auditors also stated that they did not know how many of the grants were ineligible or given away to scammers since the state’s Department of Revenue did not have proper fighting tools to deal with fraud when the grants were handed out.

Wisconsin state Senator Robert Cowles (R-Green Bay), who sits on the legislature’s Joint Audit Committee, praised the review as a good start.

“Thanks to the important work of LAB and their review of these grants, DOR is now undertaking necessary efforts to identify inappropriate and fraudulent activity targeting these grants,” Cowles said in an issued statement from his office. “I believe that this effort is going to be a very important element to not only ensure the proper administration of the We’re All In and Wisconsin Tomorrow Grants, but also to potentially kickstart other state agencies to identify and report fraudulent activity in programs they’ve administered with federal COVID relief funds.”

The findings represent the latest in a series of state audits conducted on the over $2 billion in federal COVID relief funds distributed by Wisconsin Gov. Tony Evers, a Democrat. Back in September 2022, the Audit Bureau raised concerns in a report (pdf) about the oversight of broadband providers that received millions of dollars in expansion grants.