__________________
State of Wisconsin
Department of Agriculture, Trade and
Consumer Protection
Madison
July 28, 1995
To the Honorable, the Legislature:
A423
Pursuant to a nonstatutory provision under 1993 Wisconsin ACT 352, and in the manner provided under s.
13.172(2), Wisconsin Statutes, the Department of Agriculture, Trade and Consumer Protection is pleased to submit a report to the Legislature on its study of the extent of predatory pricing of prescription drugs and unfair discrimination in drug pricing.
Approximately 29,000 separate wholesale drug purchase transactions were analyzed and compared as part of the study. Although no predatory pricing activities could be demonstrated, the study does conclude that some sellers may be engaged in drug price discrimination under s.
100.31, Wisconsin Statutes.
Please contact Paul Dingee, Trade Practices Section Chief, at 224-4925 if you have any questions regarding this report.
Sincerely,
alan T. tracy
Secretary, DATCP
Referred to committee on Consumer Affairs.
__________________
Communications
State of Wisconsin
Department of Natural Resources
Madison
June 28, 1995
To the Honorable, the Legislature:
The report, Cryptosporidium spp. and Giardia spp., Occurrence, Distribution and Levels in Wisconsin Waters, is being peer reviewed at this time. I will forward a final copy to you by August 31, 1995.
I appreciate your patience in this matter.
Sincerely,
George E. meyer
Secretary, DNR
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State of Wisconsin
Legislative Audit Bureau
Madison
July 10, 1995
To the Honorable, the Legislature:
We have completed an evaluation of the investment practices of the State of Wisconsin Investment Board, as requested by the Joint Legislative Audit Committee. A second report, to be released later this summer, will examine the structure of the Investment Board's employe salary bonus plan and the process used to select investments for the Board's private placement portfolio.
On March 17, 1995, the Investment Board publicly disclosed that the State Investment Fund, which at the time had assets of approximately $6.8 billion, had incurred a $95 million loss. The loss resulted from the Investment Board's efforts to enhance earnings through the use of derivatives without an adequate understanding of the risk some investments presented. Staff contend they were misled in the purchase of a Mexican interest rate swap by an investment dealer, but a careful analysis of documents presented and a few simple calculations would have identified the risk in this transaction. Further, when this and another derivative investment experienced substantial losses, investment staff restructured the investment agreements in an effort to minimize loss, but in doing so put even more funds at risk.
Effective management oversight mechanisms might have prevented the loss, but the Investment Board's decentralized organizational structure and existing oversight mechanisms were inadequate to detect potential problem investments. We make recommendations for the Executive Director and the Board of Trustees to improve investments reporting and oversight.
Since the $95 million loss was disclosed, $1.4 billion has been withdrawn from the State Investment Fund's Local Government Investment Pool. The loss, together with local officials' concerns about the Fund's management and state officials' concerns about local governments' ability to leave the Fund without penalty, suggest that changes in the State Investment Funds are needed.
The loss in the State Investment Fund also raised questions about derivative holdings in the Wisconsin Retirement Funds. On May 30, the Investment Board disclosed a net unrealized loss of $93 million from approximately 200 derivatives in the Retirement Funds. However, this is not as significant as the loss in the State Investment Fund because it is a loss based on market prices, which regularly change, and because of the size of the Retirement Funds and the long-term nature of their investments.
We appreciate the courtesy and cooperation extended to us by the State of Wisconsin Investment Board's trustees and staff. A response from the Board's Executive Director is Appendix VI.
Respectfully submitted,
dale cattanach
State Auditor
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State of Wisconsin
Department of Corrections
Madison
July 13, 1995
To the Honorable, the Legislature:
Attached is the second quarter report on Prison Industries for the fiscal year ending June 30, 1995, as required by Section
303.019 of the Wisconsin Statutes. This report includes the year-to-date cash balance of each industry.
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Prison Industries had a cash deficit of $3.1 million through the Second quarter ending December 31, 1994. The actual cash expenditure for the time period was $7,775,314. Revenues for the same time period were $4,655,224. Prison Industries have adequate fixed assets, inventories and receivables to cover the overdraft. The cash deficit is attributable to an uncommonly large accounts receivable during this time period. In addition, raw materials for Dodge Correctional expansion were purchased during this time period. Manufacturing and shipping of the products will not be completed during this same quarter.
The projected profit on the accrual basis for the fiscal year ending June 30, 1995 is $575,000.
Sincerely,
Michael J. Sullivan
Secretary, DOC
James R. Klauser
Secretary, DOA
__________________
State of Wisconsin
Department of Corrections
Madison
July 14, 1995
To the Honorable, the Legislature:
This is the annual report on Prison Industries for the fiscal year ending on June 30, 1994, as required by Wisconsin Statutes 303.018. This report includes the cash balance of each industry and the total amounts expended by state agencies for wood furniture and printing. It also shows what portion of the total wood furniture and printing state agencies purchased from prison Industries and includes year-end cash balance.
The cash deficit decreased by $1,159,795 (from $4,087,459 to $2,927,664) in fiscal year 1994. Total assets of plant, equipment and inventories of $5,925,529 exceed the cash deficit by $2,997,865.
See Appendix A for a summary of the cash balance for each industry and the overall financial condition of Prison Industries.
The net income on the accrual accounting basis was $1,089,234 for the fiscal year ending June 30, 1994.
State agencies spent $3,892,458 on wood furniture in FY 94. Of that amount, $729,975 or 19% was purchased from Prison Industries. During the same period, state agencies purchased $38,088,655 in printing from all sources. Of that amount, $1,096,415 or 3% was purchased from Prison Industries. State printing bulletins now require that all forms for which Prison Industries has negotiated a contract be purchased from Prison Industries. Appendix B provides comparisons with FY 93.
Sincerely,
michael sullivan
Secretary, DOC
James R. Klauser
Secretary, DOA
__________________
State of Wisconsin
Department of Corrections
Madison
July 27, 1995
To the Honorable, the Legislature:
Re: CLAIMS UNDER SECTION 227.485 AND 814.245, WISCONSIN STATUTES
The Department of Corrections has no claims under the above to report for the fiscal year ending June 30, 1995. Our legal counsel personnel have reviewed settlements during FY 95 and have determined that none apply to ss.
227.485 and
814.245 of the Wisconsin Statutes.
Sincerely,
michael J. sullivan
Secretary, DOC
