Audit faults oversight of Wisconsin's state-owned residential properties

MADISON — Wisconsin hasn't properly tracked all state-owned residential properties that are leased to state employees such as park rangers and University of Wisconsin faculty, an audit released Dec. 6 found.

The report from the nonpartisan Legislative Audit Bureau said that mismanagement resulted in the undercharging of nearly $63,000 in rent this year alone because no increases had been implemented since 1998. The audit came as the result of a tip to the state's waste, fraud and abuse hotline.

State Sen. Rob Cowles, co-chair of the Legislature's audit committee, said the Legislature would work with state agencies to bring the rental properties and policies back into compliance with the law. The audit found inattentiveness that spanned decades and multiple administrations.

Cowles and co-chair Rep. Samantha Kerkman, both Republicans, said in a statement that the audit was an example of how valuable the state's fraud hotline is.

The audit examined 32 state-owned residential properties occupied by 32 employees of the Department of Natural Resources and 114 properties managed by the University of Wisconsin System occupied by 171 employees. Among those who live in the properties are employees at state parks, forest and fish hatcheries and UW researchers, faculty and staff.

The state Department of Administration, which is in charge of tracking the properties, did not monitor compliance with the law or its own policies, which had not been updated since 1975, the audit found. It also determined that the state last conducted required appraisals of the properties in 1995, but not after the 2000 or 2010 census, as it was supposed to do.

The audit also found that IRS guidelines were not being followed for a majority of the properties. It said the DNR incorrectly applied a 50% rental payment discount to some of its lease agreements with state employees.

The audit recommended that the state comply with requirements under the law, reassess its practices related to the properties and increase monitoring and oversight.

The Department of Administration generally agrees with the audit's findings and is working on coming into compliance, said the agency's secretary Joel Brennan in a letter to the audit bureau.

UW President Ray Cross, in his response, said it was important to recognize that the audit did not identify any intentional fraud, waste or mismanagement. He also noted that the number of UW properties where problems were identified amounted to just 3% of the university's entire inventory.

Both the state and UW plan to update lawmakers by April 10 on progress toward meeting recommendations of the audit.