Frank J. Busalacchi
Secretary
Referred to committee on Transportation.
Agency Reports
State of Wisconsin
Legislative Audit Bureau
Madison
July 8, 2008
To the Honorable, the Assembly:
As required by s.
13.94(1)(em), Wis. Stats., we have completed our annual financial audit of the Wisconsin Lottery, which is administered by the Department of Revenue. We have issued an unqualified opinion on the Wisconsin Lottery's fiscal year (FY) 2005‐06 and FY 2006‐07 financial statements. We also found that the Wisconsin Lottery was in compliance with statutory spending limitations related to prizes, product informational advertising, retailer compensation, and administrative expenses.
Total ticket sales increased $57.8 million, or 13.3 percent, from FY 2002‐03 to FY 2006‐07. However, FY 2006‐07 ticket sales of $492.8 million were $16.2 million, or 3.2 percent, less than those of the previous year. Wisconsin Lottery staff attribute this decrease to the timing of large Powerball jackpots, which have a significant effect on ticket sales. Total operating expenses increased $42.5 million, or 13.6 percent, from FY 2002‐03 to FY 2006‐07, primarily because lottery prizes and retailer compensation fluctuate with ticket sales. In FY 2006‐07, lottery proceeds of $160.0 million were distributed to provide property tax relief.
We appreciate the courtesy and cooperation extended to us by Wisconsin Lottery staff in the Department of Revenue.
Sincerely,
Janice Mueller
State Auditor
__________________
State of Wisconsin
Legislative Audit Bureau
Madison
July 11, 2008
To the Honorable, the Assembly:
As required by s.
13.94(1)(dm), Wis. Stats., we have completed our annual financial audit of State Fair Park. We have issued an unqualified opinion on State Fair Park's fiscal year (FY) 2006‐07 financial statements. In addition, we have continued to monitor State Fair Park's financial condition and its efforts to improve its financial performance.
In FY 2006‐07, State Fair Park's revenue exceeded expenditures by $1.3 million, the first time since FY 1998‐99. As a result, State Fair Park was able to reduce the accumulated cash deficit to $9.9 million. The positive operating results are primarily attributable to reduced operating costs as a result of the licensing of the Milwaukee Mile racetrack to a private promoter. However, the promoter has reported financial difficulty, and in February 2008 the license agreement was renegotiated and the annual license fee paid by the promoter was lowered from approximately $1.8 million to $1.0 million. Further, a portion of the amount due has been deferred. As a result, State Fair Park will receive only $725,000 in license fees in 2008.
As part of our audit, we also reviewed conflict of interest allegations related to the management of State Fair Park's Agriculture Department. State Fair Park has begun to take steps to address concerns raised by members of the agriculture community. We include several recommendations for further improvement, including increased communication among the Board, management staff, various advisory committees, and the agriculture community in Wisconsin. In addition, we recommend State Fair Park seek an opinion from the Government Accountability Board on the perceived conflicts of interest between the Agriculture Director's outside business interests and his responsibilities to State Fair Park.
We appreciate the courtesy and cooperation extended to us by the staff of State Fair Park. A response from State Fair Park's executive director follows the appendices.
Respectfully submitted,
Janice Mueller
State Auditor
__________________
State of Wisconsin
Legislative Audit Bureau
Madison
July 17, 2008
To the Honorable, the Assembly:
A824
We have completed a review of the Environmental Cooperation Pilot Program (ECPP). The program is administered by the Department of Natural Resources (DNR) and was established by
1997 Wisconsin Act 27 to test innovative environmental regulatory methods. Since the program's inception, DNR has entered into seven agreements with power generation and manufacturing companies to reduce pollution. Statutes require the Legislative Audit Bureau to monitor ECPP and report to the Legislature on our findings.
During 2006 and 2007, DNR renewed six of the seven agreements with ECPP companies for a final five‐year term. One of two separate ECPP agreements with We Energies was not renewed because environmental goals had been attained and neither DNR nor the company anticipated any further benefits from the program.
Since our last review, DNR has reported environmental performance measures. However, these measures could be improved to identify performance by individual companies. In order to meet statutory requirements and better assess ECPP's effectiveness, we also suggest that DNR expand its efforts to measure the companies' and its own administrative savings, consider additional strategies for sharing environmental or technical innovations, and employ additional efforts to ensure adequate public involvement.
We appreciate the courtesy and cooperation extended to us by DNR and the ECPP companies we contacted in conducting this review.
Sincerely,
Janice Mueller
State Auditor
