Traditional Industries receipts for the period July 1, 1997 through March 31, 1998 were $13,867,208. Cash expenditures for the same time period were $14,364,739. Through the 3rd quarter of this fiscal year, expenditures exceeded revenues by $497,531.
Traditional Industries are projecting an $800,000 profit on a cash basis for the fiscal year. On an accrual basis, a $600,000 profit is projected for the period ending June 30, 1998. With this profit Traditional Industries will become debt free for the first time in 20 years.
Private Sector Ventures
Private Sector Venture receipts for the period July 1, 1997 through March 31, 1998 were $1,528,732. Cash expenditures for the same time period were $1,788,138. Through the 3rd quarter of this fiscal year, expenditures exceeded revenues by $259,406. This is partially offset by receivables of $133, 283, capital equipment (depreciated) of $48,971, and work in process inventory of $18,701, for a total of $200,955.
From July 1, 1997 through March 31, 1998, inmates employed by the private sector ventures contributed $507,156 towards state, federal and social security taxes, room and board, crime victim restitution and child support.
In the first quarter report, the Department of Corrections identified program changes to the Private Sector Program to reduce the cash deficit. Attached is a progress report on the remaining items. The Department is confident that these and other changes identified in our ongoing assessment of this program will result in the program breaking even and recovering its one-time start-up costs by June 30, 2000. Although the Department is projecting a $190,000 overdraft this fiscal year, it should be noted that the Department is starting to see the impact of these program changes which result in a 3rd quarter cash profit of $213,780.
In viewing the cash deficit, it should also be noted that these numbers do not reflect the financial benefits realized by the State in the form of room and board payments, state and federal taxes, crime victim restitution and child support payments. For the FY-97, this amount was in excess of $320,000. For FY-98, the Department estimates collections will be approximately $600,000.
The Department would be happy to respond to any questions you may have on this matter.
Sincerely,
MICHAEL J. SULLIVAN
Secretary, Department of Corrections
MARK D. BUGHER
Secretary, DOA
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State of Wisconsin
Department of Natural Resources
Madison
May 21, 1997
To the Honorable, the Legislature:
The Department of Natural Resources, under s.
227.24(2), Stats., is requesting the Joint Committee for Review of Administrative Rules to extend Natural Resources Board Emergency Order No. AM-29-97(E) for 60 days. This emergency order pertaining to emission limitations for motor vehicles took effect on January 1, 1998 and is to expire on May 31, 1998.
The extension of the emergency rule is needed so that the enforcement of these emission limitations can continue in the current less restrictive limitations. The rule was modified because recent technical informative indicates that many older vehicles cannot reasonably maintain a level of emissions which would comply with the final cutpoints in the current permanent rule. The new permanent rule will be adopted by the Natural Resources Board at its May meeting.
A copy of the emergency order is attached. If you have any questions, please contact Tom Steidl, Bureau of Legal Services at 266-0235.
Sincerely,
George E. Meyer
Secretary, DNR
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State of Wisconsin
Legislative Audit Bureau
Madison
May 28, 1998
To the Honorable, the Legislature:
We have completed our annual financial audit of the Division of Gaming within the Department of Administration, as required by s.
13.94(1)(eg), Wis. Stats. We have issued an unqualified opinion on the Division's financial statement for the Racing, Indian Gaming, and Charitable Gaming programs for the years ended June 30, 1997 and 1996.
The Racing program's pari-mutuel tax revenue has decreased significantly in recent years. Between fiscal year (FY) 1994-95 and FY 1996-97, pari-mutuel tax revenue declined by approximately 45 percent, from $4.7 million to $2.6 million, and the Division projects pari-mutuel tax revenue will decline to $2.3 million in FY 1997-98. Charitable Gaming program revenue has remained relatively stable at $976,129 in FY 1994-95, $952,781 in FY 1995-96, and $975,627 in FY 1996-97. During our audit period, the Division's primary revenue from the Indian Gaming program was the $350,000 received annually from the 11 tribes as reimbursement for the State's regulatory costs.
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Despite the reduction in pari-mutuel tax revenue, we found that Racing program revenues paid for some administrative expenditures that should have been charged to the Indian Gaming and Charitable Gaming programs in FY 1996-97. Specifically, the salary and fringe benefit expenditures for the Division's administrative staff were charged entirely to the Racing program, even though the duties and responsibilities of the staff encompass all three programs. Had these employe-related costs been allocated according to work effort, we estimate that an additional $164,500 in racing proceeds would have been available for transfer to other programs. By statute, transferred funds are first to be used for programs to aid local fairs and for educational programs related to livestock, both of which are administered by the Department of Agriculture, Trade and Consumer Protection. Any excess funds are then to be transferred to the General Fund.
In future sessions, the Legislature will determine how to appropriate additional funds the State will receive as a result of Indian gaming compact negotiations. However, the Legislature will first need assurances that all gaming regulatory costs are fully recovered and charged to the correct programs. Therefore, we have included a recommendation for the Department of Administration to develop an equitable process to allocate administrative costs to all its gaming programs.
We appreciate the courtesy and cooperation extended to us by the Department of Administration's Division of Gaming. The Division's response is the appendix.
Sincerely,
Janice Mueller
State Auditor
