Wagner notifies four authorities of final extended deadline to comply before legal action is taken
(PITTSBURGH) January 28, 2015 Allegheny County Controller Chelsa Wagner today notified County Executive Rich Fitzgerald, Mayor Bill Peduto, the directors and lawyers of four County-affiliated authorities of a final courtesy to comply with audits initiated by the Controller’s Office. Wagner called upon Executive Fitzgerald and Mayor Peduto to also call upon the authorities to open their books, and avoid the additional costs and delays of unnecessary litigation.
Wagner is seeking a review of contracting processes at the Airport Authority, Port Authority and the Allegheny County Sanitary Authority (ALCOSAN), and a review of ticket distribution by the Sports and Exhibition Authority (SEA), but each authority has failed to cooperate. Today, Wagner announced that if she does not receive a response from each authority by Monday, February 2, she will resort to legal action.
“These authorities have enabled our region to achieve many strides in economic development, but they run on taxpayer money,” Wagner said. “Together they have budgets that approach $1 billion annually. They cannot claim their right to taxpayer funds while also denying the responsibility of transparency and accountability.”
Wagner also pointed out that each of these authorities has been audited by the County Controller’s Office, some multiple times. In the case of the Airport Authority, the Controller’s Office conducts multiple audits per year. Therefore, the new attempts to stop audits, or to only permit certain types of audits, are entirely unprecedented.
“Each of these authorities have been audited by the Controller’s Office. These audits are not new; what is new is the outrageous attempt to stop the County’s chief fiscal officer from reviewing the books. These newfound attempts to deny very basic checks and balances suggest they have something to hide.”
Controller Wagner has been working for months to initiate audits at the authorities, with a particular focus on contracts at the authorities, but has been met with resistance from each in a consistent pattern. Wagner called attention to cooperative meetings she conducted with representatives of three of the authorities (the SEA, Airport Authority and ALCOSAN), after which each authority retracted. In the case of the Airport, auditors were turned away when they arrived on Dec. 8, 2014 to begin the audit, as previously agreed to as the on-site start date for auditors to begin.
The SEA and the Airport Authority have claimed that they are not subject to audits by the County Controller’s Office. ALCOSAN sought a delayed but undefined start date, but later failed to provide the minimum requested data, including a list of all contract awards, which the Controller indicated would be acceptable in order for her to grant ALCOSAN a delayed start date. The Port Authority claims it is not a County authority and, therefore, is not required to comply with the Controller’s performance audit.
Wagner noted the millions upon millions of dollars that are awarded in contracts at each authority. In using the example of the Airport, Wagner noted, “They are suggesting that the Controller should only be auditing a rental car agency or the retail stores, (referring to a recent audit of Hertz Rental Car that recovered approximately $750,000 last week for the County and the annual audit of Airmall, the retail operation at the airport) but should not be able to see the largest cost drivers. This is like telling your accountant about what you spend on milk and eggs and hiding the new Porsche in your garage.”
In reference to the Airport, Wagner also referred to the open-ended, add-on contract with Orbital Engineering, which is owned by the Board’s Vice Chair, Bobby Lewis. Wagner’s office alerted the Authority of the conflict of interest and requested immediate redress.
Wagner referenced the combined operating and capital budgets of these authorities amount to $854,191,076, as follows: Airport Authority, $140,268,069; ALCOSAN, $125,710,109; SEA, $16,132,649 (SEA’s 2014 budget); Port Authority, $572,080,249.
Wagner noted that her office has been overly generous by extending opportunities to cooperate to date, but communicated that each authority has until Monday, February 2, to submit to the audit requests, or she will proceed with legal action.
“We are hopeful that cooler heads will prevail and we want to give the authorities a final path for cooperation. Yet we also must be clear that their failure to cooperate will result in immediate legal action, and I have no doubt that if we must pursue that route, transparency will prevail. If February 2nd arrives without that cooperation, it will be a dark day for Allegheny County. My intention is to ensure that these authorities, like the County, operate in daylight.”