By Keith Gushard
Crawford County and five other counties of northwestern Pennsylvania must repay the state more than $225,000 in questionable and wasteful spending of job training funds by the former fiscal agent of the Northwest Pennsylvania Workforce Investment Board.
A forensic audit by the Pennsylvania Department of Labor and Industry looked at more than $6 million in questionable spending and has found $227,476.29 in unallowed expenses by the nonprofit Regional Center for Workforce Excellence (RCWE).
The audit covered the period July 1, 2009, through July 30, this year when the RCWE was the then-fiscal agent of the Northwest Pennsylvania Workforce Investment Board (WIB). The WIB is responsible for job training in Crawford, Erie, Venango, Warren, Forest and Clarion counties while the Department of Labor and Industry oversees job training at the state level.
Though the counties have 20 days to appeal the state’s ruling on the $227,476.29, they won’t, according to Robert Snyder Jr., a Forest County commissioner who chairs the six chief local elected officials (CLEOs) — one from each county — now overseeing the WIB.
“If we appeal anything, then they (Labor and Industry) may look at everything they said was forgiven,” Snyder said.
The counties’ individual shares of the money owed are proportioned at 53 percent or $120,562.43 for Erie; 18 percent or $40,945.73 for Crawford; 11 percent or $25,022.39 for Venango; 8 percent or $18,198.10 each for Clarion and Warren; and 2 percent or $4,549.53 for Forest.
The counties plan to seek repayment to the state through the RCWE’s errors and omissions insurance policy, Snyder said.
Snyder had a blunt personal opinion of what may happen in the near future with the RCWE.
“It’s time to start putting some names to some documents legally and saying ‘Hey, you know what? You did this wrong, you knew you were doing it wrong and you did it anyhow. You need to be held responsible,’” Snyder said.
Crawford County Commissioner Jack Lynch, who serves as one of the six CLEO members, agreed with Snyder’s assessment.
“We need to go through every possible recourse before we’d go back to the taxpayers (for money),” Lynch said.
The unallowed expenses had $112,000 spent to pay for economic development personnel salaries; $25,500 spent with the Jefferson Education Society for its annual global summit; $21,254.47 paid to a grant writer as a bonus; $18,269.04 in salary and benefits paid to staff for working on Destination Erie Project; and $4,000 in meeting and travel expenses.
However, the $227,476.29 owed may only be part of what must be repaid by the six counties.
There is an additional $122,846.18 in costs being questioned by the state — $113,474 in “food meeting” costs; $3,953.45 for a 10-foot cherry conference table and 10 chairs; and $5,418.73 in “miscellaneous costs” — spent during the audit period and require justification and documentation or the money will have to be repaid by the counties.
Snyder said the counties still are working with the state to see what, if any, of the additional spending may not be allowed. Crawford County’s share of that additional spending could be as much as $22,112.31.
“We have a lot of work ahead of us to determine who owes what from where,” Snyder said.
Snyder said the CLEOs plan to meet with Labor and Industry officials after the first of the year to determine a repayment schedule as well as if any of the additional expenses being questioned will need to be repaid.
Local government officials were the ones who initially sought audits by the state.
In August, a 51-page audit released by the Governor’s Budget Office blasted spending and the lack of fiscal transparency by the RCWE, the then fiscal agent of the WIB.
Formed in 2003, the RCWE was put in Meadville to be centrally located for the six counties. According to the state report, the RCWE received $12 million in federal job training funds from July 1, 2009, through June 30, 2012.
The state audit found the RCWE “has pushed the limits of their authority,” and had “not always been clear in the information provided to decision makers.” In some instances, the fiscal agent “ignored the guidance or requests” of the CLEOs, the auditors said.
On Aug. 19, the CLEOs who oversee the WIB unanimously voted to suspend the then 46-member WIB board and have the six act as the WIB’s executive committee; and appointed the state Department of Labor and Industry as the acting fiscal agent. The state has subsequently given the CLEOs an extension to Jan. 16, 2014, to act as the WIB’s executive committee, Snyder said.
The initial audit had five major findings — board members, former board members and business partners of board members benefited financially from relationships with the WIB; the RCWE exceeded its authority and lacked transparency; unallowable, wasteful and misuse of workforce development funds; a lack of internal controls over accounting; and inaccurate accounting and use of grant funds.
Among the audit findings were instances of meeting minutes that were edited by RCWE personnel to omit specific information, and that financial statements “lacked clarity.”
Keith Gushard can be reached at 724-6370 or by email at email@example.com.