Allegheny County Controller Chelsa Wagner today called for an overhaul of the County’s grant award process, upon releasing her audit of the County’s gaming funds. Wagner’s office reviewed $40.5 million from two separate gaming funds administered by the County’s Economic Development Department over a four-year period. The audit revealed that no objective criteria had been used to distribute gaming proceeds and that the Redevelopment Authority of Allegheny County (RAAC), the independent board that is vested with the responsibility for distributing the funds, does not in fact decides who receives funding.
The audit revealed that while the Board’s role is to choose awardees, it only sees a portion of the applications, preselected by Economic Development, and ratifies those decisions. The Board, whose role is to provide final approval over which projects receive funding, is awarding funding to a predetermined list of applicants, therefore creating winners and losers without justification for the decisions.
Economic Development – a County department, rather than the independent Board – has selected the winning applicants and the Board has never acted contrary to a funding recommendation made by Economic Development. Therefore, the Board has acted only to ratify the decisions, without full information, specifically without knowledge of any other eligible applications. CITF’s Program Guidelines outline a robust role for the Board in its independent governing capacity, including the authority to select winning applications. The limited information that is shared with the Board suggests a derogation of Board responsibility and consolidation of decision making within the County’s Administration, without the independent checks and balances intended as the responsibility of the Board.
“The really telling aspect of this audit is that the Board has little, if any, ability to operate as its own fiduciary, independent entity because it doesn’t receive all the information and because it operates with only the limited information provided by the Administration,” Wagner said. “There is no evidence to show how or why funding is being administered to one grantee versus another. This is unacceptable – both applicants as well as taxpayers deserve to know how these projects in our neighborhoods are chosen. While I acknowledge that there are many worthy applicants, and tough decisions to make, the lack of transparency and accountability is a disservice to taxpayers. It also means this process is ripe for abuse.”
Wagner called on the County Administration and the Board to overhaul the process, so that the Board sees all applications.
“How can the Board deny a municipality or nonprofit when they don’t even know they’ve applied?” Wagner asked.
She also emphasized that the audit revealed an absence of checks and balances in distributing almost $30 million of taxpayer money.
“When gaming was initiated in Pennsylvania in 2004, it was agreed that the taxpayers would receive a benefit in exchange for permitting this activity. Rules were established so that these funds would be more than a slush fund or walking-around money.”
The County’s Department of Economic Development’s Community Infrastructure and Tourism Fund (CITF) and Gaming Economic Development Fund (GEDF) are intended to provide financial assistance to entities to facilitate economic development projects in Allegheny County, through infrastructure assistance, tourism promotion, stabilization or correction of existing infrastructure problems, or planning and preparing sites and buildings for future use. In the four-year period analyzed by Controller Wagner, there were 953 applications to these programs and 211 grants were awarded.
Other findings outlined in the report include:
- Lack of adherence to prevailing wage criteria
- The need for strengthened internal controls and defined policies and procedures
- Not all financial audits of individual grants had been completed as required