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Hall has said that WEDC as an agency, not its unpaid board or others, bears most of the responsibility for the oversights. Even without a legal requirement to do annual audits, such work is an "inherent part of being a corporation," he said.

"It would have never occurred to me not to do an independent audit," Hall said.

Comprehensive financial statements might have provided an opportunity to catch the loan problems earlier, since such reporting requires a balance sheet that totals up assets such as loans to businesses and liabilities such as debt.

Most other state authorities require such financial statements be provided to state officials in the Legislature, governor or Department of Administration:

Echoing recommendations made in the 2010 "Be Bold Wisconsin" report, Walker pushed to replace the former commerce department with WEDC. In December 2010, he said the new agency would have " full disclosure and accountability."

In early 2011, Assembly Minority Leader Peter Barca of Kenosha and other Democrats repeatedly warned Walker and other Republicans that they were moving too quickly to create the WEDC and needed to take more time to plan. Barca was familiar with the process involved in creating an independent UW Hospital and Clinics Authority and pointed to the "detailed implementation plans" that went into that authority as an example of the kind of forethought that's needed in transitioning a public entity into a semiprivate one.

"Instead, there is a rather vague requirement for the authority to deliver a report to the Legislature," Barca said in committee testimony on the WEDC bill.

In its first year, WEDC had $57.9 million in revenue, nearly all from state taxpayers. Like the former commerce department, WEDC has to report each year on its subsidies to individual businesses, and it has the additional requirement of issuing a January report on its overall work and plans. It's also reviewed every two years by the Legislative Audit Bureau.

But it took until now for the board of WEDC to see a complete income statement and balance sheet for the agency, documents that will now go to the board every month.

Three WEDC board members have criticized the amount of information they were receiving, including Barca and Sen. Julie Lassa (D-Stevens Point). In a letter to Walker in September, Paul Radspinner, president and chief executive officer of FluGen Inc., also threatened to resign from the WEDC board if members weren't given more information to help do their jobs.

But most WEDC board members have been more reserved, at least publicly. Walker is chairman of the WEDC board; Dan Ariens, president and CEO of Ariens Co., is vice chairman; and Scott Klug, managing director of public affairs at the law firm of Foley and Lardner, is the board treasurer.

Even though Klug isn't on the audit committee, it is "puzzling" that as the board's treasurer he would not insist on greater rigor in financial reporting and better internal controls for dispersing money, said Jeffery Smith, associate professor and director at the Banta Center for Business Ethics and Society at University of Redlands in the greater Los Angeles area.

"The fact that you wouldn't have this agency, which is essentially a trustee of public funds, for them not to take seriously the importance of very diligent financial reporting seems to me at best ironic and at worst a breach of what we would expect as transparency when it comes to public interest," Smith said.

Another expert called the situation an "all-hands-on-deck magnitude problem." It is ultimately the board's responsibility to hire people to give it the information it needs to run the organization, said Paul Larson, chief equity strategist at Morningstar Inc. in Chicago.

"And from what I've heard, it sounds like they weren't doing that," Larson said.

No one on the WEDC board's audit committee is an accountant. Dreger, the chairman, is a grain farmer and owner of a seed store, though he did also head the audit committee for Dairyland Power Cooperative as well as help start an ethanol plant and serve on its audit committee. The other two committee members are Rep. Mary Williams (R-Medford) and Barca.

Dreger said the committee didn't see any full financial statements until Dec. 14, though he saw some preliminary numbers in the fall. He said the audit by the firm Schenck SC was brought forward at last week's board meeting because of the urgency surrounding it even though a few details are still being finished. FIPCO, a subsidiary of the Wisconsin Bankers Association, also performed a review that was released Tuesday. That review focused on WEDC's "incomplete management policies" and shortcomings in the agency's software systems and integration. It found WEDC staff to be "competent and conscientious," but frustrated with "existing software systems, lack of formal policies . . . and meetings that have not led to change."

Dreger said WEDC faced unusual challenges.

"There was not a road to go down. We made the road as we went down it," Dreger said.