The State of Wisconsin expects to publish its comprehensive annual financial report in December of 2012. The report will be prepared under generally accepted accounting principles.

Wisconsin Statute 238.07 (2) directs the board of the Wisconsin Economic Development Corporation to submit by October 1 an annual report on economic development programs of the corporation to the Joint Legislative Audit Committee and chief clerk of each house of the Legislature.

The report was approved by the WEDC Board of Directors on October 19, 2012. To ensure ease of accessibility, WEDC is hosting the report on its website at http://inwisconsin.com/act125report/

The 2011-13 Biennial Budget (2011 Wisconsin Act 32) was balanced in part on achieving the following required lapses and transfers of funds to the general fund:

• DOA-allocated lapse of $174.3 million from GPR and PR appropriations with cash balances, of which $51,005,664 remains to occur in fiscal year 2012-13;

• PR lapses related to employee compensation changes, elimination of long-term vacant positions and across-the-board reductions;

• GPR and PR lapses related to the 2 percent pay increase received by represented employees in June 2009.

A1052 This memo focuses on the allocation of the $51 million remaining from the $174.3 million DOA-allocated lapse requirement under s. 9255 (1)(b) and the review and approval process for all of the required lapses. Attached are the lapse allocation amounts for each of the lapses listed above. As in the past, specific exemptions were granted for high-priority programs, and lapses may not be taken from sum sufficient or federal appropriations. Unlike past biennia, the lapses may not be taken from segregated appropriations or any program revenue appropriations within the University of Wisconsin System. Finally, these lapse allocations may only be taken from sum certain GPR or PR appropriations that have a positive cash balance.

Agencies should submit lapse plans for those required under Act 32 to Brian Hayes, State Budget Director, by Monday, November 19th, outlining how the fiscal year 2012-13 lapses will be taken. These plans should minimize layoffs of state employees and should take advantage of high vacancy rates that exist in most state agencies. Any proposals that require changes in statutory language should be noted. After the plans have been reviewed and approved, a consolidated plan that outlines the DOA-allocated lapse under s. 9255 (1)(b) will be submitted to the Joint Committee on Finance under its 14-day passive review authority.

These lapses will present operational challenges and opportunities to state agencies. The Governor remains committed to putting Wisconsin's state government on a stable fiscal footing while ensuring that it functions as efficiently and effectively as possible.

We appreciate the efforts of you and your staff in identifying creative ways to manage these reductions.