Thank you for your consideration.
Sincerely,
GEORGE E. MEYER
Secretary, DNR
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State of Wisconsin
Wisconsin Housing and Economic
Development Authority
Madison
December 12, 1997
To the Honorable, the Assembly:
Pursuant to section 234.25, Wisconsin Statutes, attached is the fiscal 1997 annual report of the Wisconsin Housing and Economic Development Authority (WHEDA). This report contains information about WHEDA's fiscal 1997 operations and accomplishments, our strategic plan and the year-end report of our public auditor. Please note that each of the housing programs described in the following pages are consistent with the goals, policies and objectives of the state housing plan.
Should you have any questions or comments on this report, please call me or Jim Langdon at 266-3529. Thank you for your interest in WHEDA.
Sincerely,
FRITZ RUF
Executive Director, WHEDA
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State of Wisconsin
Department of Public Instruction
Madison
December 1997
To the Honorable, the Legislature:
The department is pleased to submit the 1997 Annual Report on the Status of Bilingual-Bicultural Education programs, as required under s.
115.96, Wisconsin Statutes.
The report provides a review of the state's administration and funding of bilingual education in Wisconsin and factors contributing to program expansion and the resulting continuously lower annual reimbursement rates for school districts. The number of pupils served from minority languages, the locations of the state-funded programs during the 1997 fiscal year (July 1, 1996, through June 30, 1997), and staff-related data are included in the report to inform those with responsibilities for ensuring the continued success of bilingual education programs in Wisconsin. I am confident that you will find the report informational, useful and of concern given the rising numbers of pupils to be served absent a corresponding increase in fiscal support by the state.
If you have questions on any aspect of this report, please contact Barbara A. Bitters, director, equity, 266-9609. She will be happy to discuss these at your convenience.
Sincerely,
John T. Benson
State Superintendent
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State of Wisconsin
Department of Administration
Madison
December 12, 1997
To the Honorable, the Legislature:
This report is transmitted as required by sec. 20.002(11)(f) of the Wisconsin Statutes, (for distribution to the appropriate standing committees under sec. 13.172(3) Stats.), and confirms that the Department of Administration has found it necessary to exercise the "temporary reallocation of balances" authority provided by this section in order to meet payment responsibilities and cover resulting negative balances during the month of November, 1997.
On November 19, 1997 the Wisconsin Petroleum Inspection Fund balance was -$1.30 million. This shortfall continued until November 20, 1997 when the balance reached $8.08 million. This shortfall was due to the timing of revenues.
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On November 3, 1997 the
Wisconsin Health Education Loan Repayment Fund balance was -$2 thousand. This shortfall continued through November 21, 1997 when the balance reached $13 thousand. This shortfall was due to the timing of revenues.
The Wisconsin Petroleum Inspection and Health Education Loan Repayment Fund shortfalls were not in excess of the $400 million ceiling and did not exceed the balances of the Funds available for interfund borrowing.
The distribution of interest earnings to investment pool participants is based on the average daily balance in the pool and each fund's share. Therefore, the monthly calculation by the State Controller's Office will automatically reflect the use of these temporary reallocations of balance authority.
Sincerely,
Mark D. Bugher
Secretary, DOA
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State of Wisconsin
Legislative Audit Bureau
Madison
December 22, 1997
To the Honorable, the Legislature:
As required by
1995 Wisconsin Act 5, we have completed an evaluation of state-funded loan guarantee programs administered by the Wisconsin Housing and Economic Development Authority (WHEDA). The programs, which guarantee commercial loans to eligible small businesses and farmers, are managed in the Wisconsin Development Reserve Fund. A 40 percent decrease in the Reserve Fund balance, from $21.1 million at the end of fiscal year 1991-92 to $12.9 million as of June 30, 1997, heightens the need for effective fiscal management of the Fund and guarantee programs. The Reserve Fund balance could decrease even more quickly if any one of several events occurs, including changes in the economy or a default on a large guaranteed loan.
In light of the decreasing balance, WHEDA has taken a number of steps to help improve the efficiency and reduce the costs of the guarantee programs. However, we identified several areas in which WHEDA needs to continue to improve its fiscal management of the Reserve Fund. For example, because it does not record or monitor actual time or costs spent on the guarantee programs, WHEDA is unable to adequately support the appropriateness and necessity of costs allocated to the Reserve Fund. In addition, staffing levels and expenses appear relatively high compared to those of commercial lenders and other state agencies. WHEDA also lacks adequate investment policies and strategies to guide investment decisions for the Reserve Fund.
In the future, additional state funds are likely to be required to maintain WHEDA's loan guarantee programs. However, whether to provide additional state funding in the future will depend on program need, demand, and results. WHEDA's loan guarantee programs for small businesses, which are the most costly to administer, are similar to those provided by the federal Small Business Administration. To help the Legislature assess the continued need for the small business loan guarantee programs, WHEDA needs to measure and report program results, such as the number of actual jobs created and retained.
We appreciate the courtesy and cooperation extended to us by WHEDA. A response from WHEDA is the appendix.
Sincerely,
Dale Cattanach
State Auditor
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State of Wisconsin
Legislative Audit Bureau
Madison
December 30, 1997
To the Honorable, the Assembly:
We have audited the financial statements of ECB Radio and Television Networks, which are public telecommunications entities operated by the Wisconsin Educational Communications Board, for the period July 1, 1996 through June 30, 1997 and have issued our reports on these statements, dated December 5, 1997.
The audit was requested by the Educational Communications Board to fulfill audit requirements of the Corporation for Public Broadcasting. The Corporation requires audited financial statements of public broadcasting entities and certifications of these entities' non-federal revenue sources in determining future funding levels. The audit reports include no major findings, conclusions, or recommendations.
Copies of the audit report have been distributed to members of the Joint Legislative Audit Committee and those required by law to receive them. If you are interested in receiving a copy of this report, please contact our office and request report number 97-24 and 97-25.
Sincerely,
Dale Cattanach
State Auditor
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State of Wisconsin
Legislative Audit Bureau
Madison
December 30, 1997
To the Honorable, the Assembly:
We have audited the financial statements of WHA Radio and Television, which are public telecommunications entities operated by the University of Wisconsin-Extension, for the period July 1, 1996 through June 30, 1997 and have issued our reports on these statements, dated December 9, 1997.
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The audit was requested by the University of Wisconsin-Extension to fulfill audit requirements of the Corporation for Public Broadcasting. The Corporation requires audited financial statements of public broadcasting entities and certifications of these entities' non-federal revenue sources in determining future funding levels. The audit reports include no major findings, conclusions, or recommendations.
Copies of the audit report have been distributed to members of the Joint Legislative Audit Committee and those required by law to receive them. If you are interested in receiving a copy of this report, please contact our office and request report number 97-26 and 97-27.
Sincerely,
Dale Cattanach
State Auditor
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State of Wisconsin
Investment Board
Madison
December 30, 1997
To the Honorable, the Legislature:
Attached is the Investment Board's annual report to the Legislature on investment goals and long-term strategies, as provided under section
25.17(14g) of the Statutes. Objectives for each of the major funds managed by SWIB are described and significant changes since our last report are noted.
The Board currently manages over $48.2 billion for the Wisconsin Retirement System (WRS), the tenth largest US public pension fund and the 21st largest public or private pension fund in the world. The Board also manages over $4.8 billion in cash balances of state agencies and local governments in the State Investment Fund (SIF). Cash balances of the WRS are also managed in SIF.
Our investment objectives remain fundamentally the same from year-to-year. A long-term focus guides the investment strategy for the Retirement System trust funds, in keeping with their long-term obligations. The SIF emphasizes safety of principal and liquidity, commensurate with a reasonable rate of return.
Key points of note in this report:
Wisconsin Retirement System Trust Funds
* The basic investment objective for th Fixed (or balanced) Retirement Fund is to achieve an average 8% annual return over the long-term. This month, the Employe Trust Funds Board approved the actuary's recommendation to increase the expected spread between salary inflation and investment return from 2.7% to 3.2%. This will result in a relative increase in the portion of liabilities funded from investment returns. In June 1998, the ETF Board may consider reductions in contribution rates based on investment returns for 1997.
* The assets of the Fixed Fund are diversified among various markets in order to produce needed rates of return over the long-term and to manage risk. The overall asset mix for the Fixed Fund is similar to what is typical for other large public pension funds.
* Due to the run-up in the domestic stock market, we moved some funds from stocks to bonds in 1997 in order to achieve the strategic targets for these assets. Together, domestic and international stocks continue to represent about 55% of Fund assets.
* We have shifted a portion of our large-company domestic stock portfolio from active management to an S&P 500 index fund. This enables us to direct more of our analytical resources to the small and mid-size companies where there are greater opportunities to add value with active management. The use of index funds also facilitates rebalancing among asset classes.
* Trustees and staff are engaged in a major planning exercise to examine the funding needs of the WRS and investment market trends over the next five to ten years. With the assistance of outside experts we are reviewing where investment managers are most likely to add value in the markets of the future. By the fall of 1998, we expect to complete an assessment of the implications for SWIB.
State Investment Fund
* The State Investment Fund (SIF) continues to maintain a short average maturity because the current market offers relatively little added return for investments of longer maturity. Interest rates for 81% of the portfolio reset within three months or less. This strategy has served the Fund well over the last several years.
* We restructured the Wisconsin Certificate of Deposit Program to make it more attractive to Wisconsin financial institutions. Because of these changes, participation has grown from 20 banks with $54 million in CDs to over 121 banks with over $239 million in outstanding CDs purchased by SWIB.
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With the assistance of the UW Survey Research Laboratory, we surveyed WRS members and local governments participating in SIF. These surveys are helping us to improve services and to better understand the types of information participants want to receive from SWIB about the management of their funds.
By March 31 we will submit our annual investment performance report to you. Please feel free to contact me if you have any questions about this report of other matters.
Sincerely,
Patricia Lipton
Executive Director, SWIB
