PA workforce agency seeks repayment relief following scathing audit

By Rachel Martin | Watchdog.org

PITTSBURGH — A job training agency in northwest Pennsylvania is asking the state for a repayment plan after a finding that nearly $250,000 was misspent. A 51-page audit gave the side-eye to everything from lunch meetings to goldfish.

The state’s Office of the Budget did a performance audit of the Regional Center for Workforce Excellence, covering July 1, 2009, to July 30, 2013. The RCWE was the fiscal agent for the Northwest Pennsylvania Workforce Investment Board, an agency that covers six counties in the northwest corner of the state, including Erie County.

The auditor raised a multitude of concerns.

One of the issues was that board members participated in what looked like insider contracts.

“While purchasing from board members may not be a direct violation of the conflict of interest policy, the procurement activities exhibited by the WIB and Fiscal Agent give the public the perception taxpayer dollars may have been spent for personal gain or squandered,” noted the report.

The auditor was also concerned with a seeming lack of transparency.

The report also found that “meeting minutes were edited by personnel to omit specific information and financial statement disclosures lacked clarity, which caused information shared with the public to also lack transparency.” Additionally, “Specific topics discussed were often omitted from meeting minutes, which routinely used phrases like ‘discussion ensued’ rather than documenting the actual dialogue.”

The auditor also raised an eyebrow at the $113,000 “expensed to the ‘Food Meetings’ category in the Fiscal Agent’s accounting system” between 2010 and 2012, as well as $5,000 worth of “glossy report handouts” for an annual dinner meeting.

Additionally, “Workforce investment funding was spent on helium and balloons, gold fish, tulle, goblets, flowers, monthly coffee service, building photos, and pictures,” the audit found.

The RCWE bluntly contested a variety of the auditor’s findings and characterizations. Under a single finding, it used the sentence “The auditor is incorrect” four times.

In one particularly snippy response, it stated, “The auditor provides various examples of what it considers to be waste or abuse of funds by RCWE. That is the perspective of the auditor. The other perspective, and the one that is correct, is that these expenditures of funds were to enhance the mission … as well as to promote the services.”

After reviewing the audit, the Pennsylvania Department of Labor and Industry determined that $227,000 in unallowed expenses were made by RCWE. The amount is divided proportionately between the counties.

Officials approved a letter to the Department of Labor and Industry on Nov. 19 that asks the amounts be repaid from workforce funds over three years, to minimize the impact on job services.

The Department of Labor and Industry didn’t immediately return a request for comment, and two of the chief local elected officials now overseeing the WIB were also not available for comment.

Notwithstanding the apparent money mishaps, a subsequent audit by a federal agency found the WIB generally met its performance goals for 2010-2011. The Office of the Inspector General’s report noted some bookkeeping problems, but found “the Board met its performance goals to provide (Workforce Investment Act)-funded services to participants to meet the workforce development needs of the local area.”

While the state audit found what seemed to be substantial problems, it was not a simple — or cheap — task to ferret them out. Local reporting noted the audit took over a year to complete and cost $216,000 because of the substantial complexity.