We have completed a financial audit of the Unemployment Reserve Fund for fiscal years 1999-2000 and 1998-99. This audit was performed at the request of the Department of Workforce Development, which administers the Fund.
As necessary parts of the financial audit, we reviewed the Fund's control procedures, assessed the fair presentation of its financial statements, and reviewed compliance with applicable laws and regulations. We were able to provide an unqualified auditor's report on the Fund's financial statement, and we found no instances of material weaknesses in the internal control structure or material instances of noncompliance.
The Unemployment Reserve Fund's cash balance related to taxable employers increased $83 million during the past fiscal year, to nearly $1.8 billion as of June 30, 2000. This cash balance is used to determine the tax rate schedule to apply to taxable employers. Since the cash reserves exceed the amount that allows employers to be taxed under the lowest rate schedule, the Fund is able to charge employers the lowest authorized tax rates.
Copies of the 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 00-14. The report is also available on line at www.legis.state.wi.us\lab\windex.htm.
Sincerely,
Janice Mueller
State Auditor
State of Wisconsin
Ethics Board
December 5, 2000
The Honorable, The Senate:
The following lobbyists have been authorized to act on behalf of the organizations set opposite their names.
For more detailed information about these lobbyists and organizations and a complete list of organizations and people authorized to lobby the 1999 session of the legislature, visit the Ethics Board's web site at http://ethics.state.wi.us
Kay, Jason AARP
Kuehn, Ronald W Dells Boat Company, Inc.
Also available from the Wisconsin Ethics Board are reports identifying the amount and value of time state agencies have spent to affect legislative action and reports of expenditures for lobbying activities filed by the organizations that employ lobbyists.
Sincerely,
Roth Judd
Director
State of Wisconsin
Claims Board
July 27, 2000
The Honorable, The Senate:
Enclosed is the report of the State Claims Board covering the claims heard on June 27, 2000.
The amounts recommended for payment under $5,000 on claims included in this report have, under the provisions of s. 16.007, Stats., been paid directly by the Board.
The Board is preparing the bill(s) on the recommended award(s) over $5,000, if any, and will submit such to the Joint Finance Committee for legislative introduction.
This report is for the information of the Legislature. The Board would appreciate your acceptance and spreading of it upon the Journal to inform the members of the Legislature.
Sincerely,
Edward D. Main
S703 Secretary
STATE OF WISCONSIN CLAIMS BOARD
The State Claims Board conducted hearings in the State Capitol, Grand Army of the Republic Memorial Hall, Madison, Wisconsin, on June 27, 2000, upon the following claims:
Claimant Agency Amount
1. Roque Chavez Department of $3,306.18
Transportation
2. Veaster Tillmon, Jr. Department $2,997.42
of Revenue
3.Ameritech, Inc. Department of $6,266.57
Transportation
4. Hazel Samuel Department of $2,014.67
Corrections
5. Westra Construction Department of $55,971.08
Administration
In addition, the following claims were considered and decided without hearings:
Claimant Agency Amount
6. Jodi Dabson Department. of $10,097.23
Bollendorf District Attorneys
7. Robert & Carol Department $4,731.95
Hawthorne of Revenue
8. Georgianne Henning Department $15,695.00
of Revenue
9. Ronald Springer Department of $11,018.59
Transportation
10. Peggy S. Thran Department $250.00
of Corrections
11. Ken Truman Department of $96.97
Corrections
12. Anthony W. Department of $340.34
Wielgosz Natural Resources
In addition, the following claim, which was previously presented and decided at hearing, was reconsidered and decided without hearing:
Claimant Agency Amount
13. Barbara Hestekin Department of $5,000.00
Transportation
In addition, the board considered the question of whether or not to hold a hearing for the following claim prior to resolution of legal appeals.
Claimant Agency
14. Frederick Saecker Wrongful Imprisonment
The Board Finds:
1. Roque Chavez of Waukesha, Wisconsin, claims $3,306.18 for auto damage allegedly caused in an accident with a state employee in March 1999. The Claimant states that a state driver failed to give him the right of way and caused the accident. The claimant alleges that his vehicle, a 1986 Isuzu, had completely body restoration in 1997 and a new motor, clutch, and exhaust installed in 1998. He requests reimbursement for the estimated cost of repairs, $3,306.18.
The Department of Transportation recommends payment of this claim in the reduced amount of $570.00. The accident occurred at the intersection of E. St. Paul Ave. and Union St. in Waukesha, WI. The state driver was attempting to cross E. St. Paul Ave. from his residence a short block from the intersection. The state driver was approximately 3/4 of the way across E. St. Paul Ave. when the claimant struck his vehicle. The claimant does not carry any insurance on his vehicle. The claimant submitted two repair estimates, both of which exceeded the value of the vehicle. The claimant's vehicle is over 13 years old with well over 100,000 miles on the body. The claimant alleges that the vehicle had extensive repair and restoration several years ago, however, he has offered no documentation of these repairs, nor has he submitted a certified appraisal proving that the value of his vehicle prior t the accident. The DOT states that one of the repair estimates submitted by the claimant indicated that the general condition of the vehicle was "poor". The Kelly Blue Book value of the claimant's vehicle (trade-in value, fair condition) is $670. The amount of the settlement for totaled vehicles is the Blue Book value minus the salvage value of the vehicle. The submitted salvage bid was $100.
The Board concludes the claim should be paid in the reduced amount of $1,170.00 based on equitable principles. The Board further concludes, under authority of s. 16.007(6m), Stats., payment should be made from the Department of Transportation appropriation s. 20.395(4)(er), Stats.
2. Veaster Tillmon, Jr. of Tucker, Arkansas, claims $2,997.42 for overpayment of state income taxes for the years 1981, 1988, 1989 and 1990. The Department of Revenue garnished the claimant's wages from September 1992 until June 1993. The claimant states that he was not a Wisconsin resident during the years in question and believes that, in fairness, the money taken by the DOR should be returned to him.
The Department recommends denial of this claim. the claimant filed income tax returns in 1979 and 1980, reporting taxable income of $17,000 and $20,000, respectively. The Department issued an estimated assessment for 1981 on April 4, 1983 and estimated assessment for 1988 through 1990 on January 18, 1993. The DOR corresponded extensively with the claimant in 1986 and 1987 regarding his residency but the matter was never resolved. the Department began garnishment of the claimant's wages in 1992 and collected $2,997.42. On June 3, 1999, the claimant provided sufficient documentation to verify that he was not a Wisconsin resident during the years in question and the Department canceled the balance of the assessment. Section 71.75(5), Wis. Stats., prohibits the Department from refunding the collected amount since no refund was claimed within the prescribed two-year period.
The Board concludes there has been an insufficient showing of negligence on the part of the state, its officers, agents or employes and this claim is not one for which the state is legally liable nor one which the state should assume and pay based on equitable principles.
3. Ameritech, Inc., of Waukesha, Wisconsin, claims $6,266.57 for damage to fiber optic cable owned by the claimant. The claimant states that in July 1999, Department of Transportation employees, while digging to place a traffic signal, struck and damaged the fiber optic cable. The claimant states that s. 182.0175, Wis. Stats., requires hand digging within 18 inches of a marked utility and that the employees' failure to follow this statute caused the damages. The claimant requests $6,266.57 for repair of the cable.
The Department of Transportation recommends payment of this claim. The DOT acknowledges that on July 22, 1999, while installing a traffic signal in Ashland, WI, a DOT employee negligently damaged the fiber optic cable.
The Board concludes the claim should be paid in the reduced amount of $5,000 based on equitable principles. The Board further concludes, under authority of s. 16.007(6m), Stats., payment should be made from the Department of Transportation appropriation s. 20.395(3)(eq), Stats.
S704 4. Hazel Samuel of Sussex, Wisconsin, claims $2,014.67 for cost of supplemental insurance allegedly purchased due t an error by the Department of Corrections. The claimant states that when she retired in November 1994, she called the payroll office to request that they send a letter to Social Security indicating that she was retired and eligible for Medicare. The claimant states that she requested a copy of this letter so that she could purchase supplemental insurance. The claimant states that no one informed her that she was still covered by any state insurance but that she later found out that she was still covered by state insurance. She requests reimbursement for the cost of the supplemental insurance she purchased.
The Department of Corrections recommends denial of this claim. According to DOC and ETF records, the claimant, who originally planned to retire in May 1994, contacted ETF in May 1993, inquiring about her sick leave conversion to health insurance premiums. ETF sent her a pamphlet that clearly explained that premiums for health insurance coverage are first paid out of accumulated sick leave. The pamphlet also explained how health insurance coverage is maintained and that it is the employee's responsibility to set up a meeting with ETF to discuss health insurance after retirement, which the claimant did not do. In July 1993 the claimant wrote ETF and stated that she would not retire in May 1994 because she "did not have enough sick day hours left to compensated for health insurance." ETF responded, informing the claimant that if she had no sick leave left when she retired, health insurance premiums would be deducted from her annuity or the health insurance company would bill her directly. In October 1994, the DOC sent a letter to the Social Security Administration verifying that the claimant was an active employee until November 1994. DOC routinely notifies the SSA when employees are no longer covered under its insurance plan and that Medicare may be established when that person turns 65. When an employee retires, health insurance terminates from the employing agency and converts to a policy handled by ETF. On 11/7/94 the DOC sent the ETF certification that the claimant's unused sick leave provided 6.8 months of insurance premium coverage beginning 2/95. The claimant purchased supplemental Medicare insurance in 1/95. The DOC contends that the letter sent to the SSA was a technical letter intended to notify the SSA; it is not intended to provide the retiree with information about health insurance. The DOC points to the fact that three days prior to her retirement, the claimant had still not taken the common steps made by retirees to reliably inform herself about the status of her health insurance after retirement. She did not call anyone at DOC or ETF to answer any questions but instead, just went ahead and purchased insurance. The Department sympathizes with the claimant, however, DOC believes that it was the claimant's own misunderstanding and lack of preparation that caused her losses, not any negligence on the part of the state.
The Board concludes there has been an insufficient showing of negligence on the part of the state, its officers, agents or employes and this claim is not one for which the state is legally liable nor one which the state should assume and pay based on equitable principles.
5. Westra Construction of Waupun, Wisconsin, claims $55,971.08 for additional winter construction costs allegedly incurred on a project at Oakhill Correctional Institution. The claimant states that the project was bid on April 7, 1998, and that they anticipated a start date of no later than June 1, 1998. The claimant states that they indicated in an April 28, 1998 letter to DOA that construction had to begin no later than June 1, for building enclosure to occur before cold weather protection was required. The claimant states that General Requirements Item No. 25 Temporary Heat provided that the cost of fuel used after enclosure was to be provided by the state at no cost to the contractor and therefore the claimant did not include winter heating or cold weather protection in their bid. The claimant states that they informed the DOA in their fax dated June 6, 1998, that there would be additional costs due to the delay in the construction start date. The claimant was not authorized t proceed until a Pre-Construction Meeting on August 4, 1998. The claimant believes that a four-month delay between the bid opening and authorization to proceed is excessive. the claimant states that the State proceeded with the executing the contract and awarding the claimant the contract knowing that the claimant made an exception to cold weather protection. The claimant requests reimbursement for its winter protection costs.
The Department of Administration recommends denial of this claim. The claimant now claims $55,971.08 in cold weather protection costs. According to DOA records, in October 1998 the same claim was $94,970.00 and in January 1999 it was $70,817.00. DOA states that prior to the August 1998 meeting, the claimant was twice told verbally to get the project within budget and that the state would not pay cold weather protection. $211,000 was subsequently value engineered out to get the project within budget. DOA states that the claimant's contract was written with their April 28, 1998, letter attached with a handwritten note indicating that cold weather protection was the contractor's responsibility. According to DOA records, the claimant was again told at a November 1998 constriction meeting that DOA would not pay cold weather protection. In order to resolve the matter, DOA agreed to pay for fuel for temporary heat and the concrete plant charges to heat the concrete. A change order for $3,838 was prepared to compensate the claimant for these costs in full and final settlement of their claim.
The Board concludes there has been an insufficient showing of negligence on the part of the state, its officers, agents or employes and this claim is not one for which the state is legally liable nor one which the state should assume and pay based on equitable principles. [Member Main not participating.]
6. Jodi Dabson Bollendorf of Janesville, Wisconsin claims $10,097.23 for attorney's fees incurred because of an ethics grievance filed against the claimant. The claimant is an Assistant District Attorney in Rock County. In January 1999, she received notice form the Board of Attorneys Professional Responsibility that an ethics grievance had been filed against her. This grievance alleged that the claimant made false statements to the court at sentencing in the case of State v. Donald Lee Pippin, while acting in her official capacity as an ADA for Rock County. The claimant states that she cooperated fully with BAPR's investigators. The claimant states that she was advised by colleagues to obtain legal counsel to represent her interests at the BAPR hearing. At the investigatory hearing, BAPR concluded "there was not clear and convincing evidence that Ms. Bollendorf made any false or misleading statements to the court." The claimant's legal counsel sent a letter to BAPR pointing out the specific misrepresentations made n the complaint against Ms. Bollendorf. Based upon the entire investigation, in November 1999, the Administrator of BAPR found no violation of rules by the claimant and dismissed the matter. Since she was acting in her capacity as an ADA representing the State of Wisconsin and was found not to have violated the rules of professional responsibility, the claimant requests reimbursement for her attorney's fees.
S705 The Department of Administration recommends payment of this claim from the funds appropriated to the the Department of District Attorneys. The Rock County District Attorney, David O'Leary, also reviewed the actions of the claimant that were challenged before BAPR and concluded that the charges were without merit. He fully supports payment of the claimant's legal costs. In addition, the Department of Justice has reviewed this claim and also recommends payment stating, "it is very important for prosecutors to know that when they act ethically in carrying out their responsibility to fairly enforce criminal laws of this state, the state will stand behind them. A contrary result could chill effective prosecution and law enforcement." Before obtaining private counsel, it would have been appropriate for the claimant to have contacted the State Prosecutors Office in DOA and requested its assistance in obtaining DOJ representation for her before BAPR. The policy of DOJ is to represent prosecutors and others when actions are filed against them with the intent of negatively impacting their ability to carry out their job duties and where there is no other valid basis apparent for the action. DOA is re-issuing information to all prosecutors on the proper procedure to follow when such instances occur. DOA believes that payment of this claim will help assure the over 425 state prosecutors in Wisconsin that their efforts in support of public safety are valued, supported and protected by the state.
The Board recommends that the claim be paid in the amount of $10,097.23 based on equitable principles. The Board further recommends that payment be made from the District Attorney appropriation s. 20.475(1)(d), Stats. [Members Albers and Wiley dissenting.]
7. Robert and Carole Hawthorne of Waukesha, Wisconsin claim $4,731.95 for overpayment of corporate income taxes for the 1993. The claimants own their own cleaning business. The claimants state that they failed to file the taxes in question because of a series of personal family crises. Between 1992 and 1995 Robert Hawthorne was disabled and unable to work, Carole's mother was diagnosed with cancer and her father died, two of their children moved back home, Robert's mother died, and and Carole's mother was the victim of a car-jacking during which she was injured. Claimant Carole Hawthorne states that she was overwhelmed trying to run the business alone, while her husband was disabled. She alleges that she had their accountant do the taxes but that she put them in a file and forgot to mail them. She states that when she received the assessment from the DOR, she was so involved the the family difficulties that she simply paid the assessment without questioning it. The claimants state that once their personal situation improved, they went to an accountant and filed the taxes. They allege that their accountant had told them in 1998 that he would request a refund of the overpaid amount but that they found out in March 2000 that he never did so. Due to the inordinate number of personal hardships faced by the claimants during this period, they request a refund of their overpayment.
The Department of Revenue recommends denial of this claim. The DOR states that these claimants have a history of non-filing with the Department. According to the DOR's records, the claimants failed to file a 1993 corporate income tax return for their business. The assessment for this return was issued on October 30, 1995, and paid in full on April 12, 1996. Department records indicate that the actual 1993 return was filed on April 27, 1998. The Department is sympathetic to the claimants' personal challenges, however, section 71.75(5), Wis. STats., prohibits the DOR from refunding the amount collected on the original assessment since no refund was filed within the prescribed two-year period.
The Board concludes there has been an insufficient showing of negligence on the part of the state, its officers, agents or employes and this claim is not one for which the state is legally liable nor one which the state should assume and pay based on equitable principles.
8. Georgianne Henning of Fond du Lac, Wisconsin claims $15,695.00 for refund of overpayment of 1993 income taxes. The claimant's husband passed away in June 1999 and she alleges that it was not until after his death that she became aware that he had not filed taxes. The claimant states that her husband was responsible for handling all the household financial matters and that she was completely unaware that there were tax problems until began to open her husband's mail after his death. The DOR issued an assessment for the 1993 taxes, which was paid by a levey on Mr. Henning's bank account. Under section 71.75(5), Stats., the claimant had until October 1997 to file a claim for refund of the overpayment, however, she states that she was unaware that the assessment even existed and therefore had had no opportunity to file for a refund. The claimant also believes that the 1993 assessment made by the DOR was excessive. The 1992 income used by the DOR auditor to estimate the Hennings' tax liability was $120,000. The 1993 income amount used was $380,000--three times greater than the 1992 income amount. The claimant believes that the DOR uses inflated assessment figures for the purpose of creating an incentive for taxpayers to file their own corrected returns. However, in this instance the claimant believes this inflated amount constitutes cruel and unusual punishment because she did not even know the assessment existed and therefore had now way to contest it. Finally, the claimants is requesting refund of a $15,695 overpayment, while the DOR alleges that the overpayment amount is only $11,343.21. The claimant states that the DOR's own transcripts of the claimants' account were used in calculating the $15,695 overpayment, which the claimant believes is correct.
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