In addition, we questioned $127,164 in costs claimed by the Department of Commerce because it did not fully document payroll and related costs charged to federal and state matching accounts, as required by federal grant rules. Finally, we questioned $16,722 in costs for a variety of findings at various state agencies.

Although questioned costs were not at issue, we disagree with how the Department of Natural Resources accounts for some federally reimbursed costs. For certain federal programs, part of the reimbursed costs are charged to state general purpose revenue appropriations, while the reimbursement is credited to the account for federal programs. If both the reimbursement and the reimbursed costs were assigned to the federal program account, general purpose revenue could be available to be lapsed. This lapse would be on a one-time basis. The amount of potential lapse is not known, though our analysis of one large project suggested that the recommended treatment could have allowed the lapse of $220,211 in general purpose revenues during fiscal year 1995-96.

Our unqualified audit opinion on the State's financial statements was included in the Comprehensive Annual Financial Report for the fiscal year ended June 30, 1996. This report was published by the Department of Administration in December 1996 and is available from the State Controller's Office in the Department of Administration.

Our single audit report is lengthy and detailed. We are, therefore, limiting our initial distribution of the report to those required by law to receive copies, the audited state agencies, and the federal agencies providing funding to the State. However, if you are interested in receiving a copy of the single audit report, please contact our office and request report number 97-11.

As stated in SS 227.485(9), each state agency is required to notify the legislature of claims in which attorney's fees have been paid. On behalf of Secretary William J. McCoshen, I am submitting this information for the Wisconsin Department of Commerce.

During FY97, there was one case in which attorney's fees were judged against the Department of Commerce. this was a PECFA claim sent for judicial review, Tack Oil (Case #94-CV-545). The petitioner was awarded $5,090.60. The date of the order was January 10, 1996.

Please feel free to contact me with any further questions. Thank you.

The Town of Delafield by its adoption of resolution 97-437 registers its support for the Joint Finance Committee's Motion 7045 and urges your vote in support of it when the 1998 Revenue Bill reaches your chamber.

We believe Motion 7045 will promote reasonable and measured growth and expansion and providing for open discussions between contiguous jurisdictions. The result will be development of which everyone can be proud. In an arena in which all entities are treated with respect, everyone wins.