Meadville Tribune

Local News

March 20, 2014

Counties may sue to recover more than $450K

MEADVILLE — Crawford County is among six Pennsylvania counties that may sue the former management agency of the Northwest Pennsylvania Workforce Investment Board to recover more than $450,000.

On Wednesday, officials from Crawford, Erie, Forest, Venango, Clarion and Warren counties voted unanimously 6-0 to hire Dale Woodard Gent law firm of Franklin to negotiate with Regional Center for Workforce Excellence (RCWE) to recover the money.

The estimated $457,279 the counties are seeking is the outstanding balance on a $517,279 loan the RCWE made to RCWE Holding Co. in February 2012 to buy an office building at West Eighth and Sassafras streets in Erie.

Robert Snyder Jr., a Forest County commissioner who chairs the six chief local elected officials (CLEOs) — one from each county who now oversee the WIB — said the counties are prepared to file a lawsuit if needed.

“We’re hoping to negotiate first — I don’t know if they have any assets or cash,” Snyder said of the RCWE, the former fiscal agent for the WIB. The WIB is responsible for job training in Crawford, Erie, Venango, Warren, Forest and Clarion counties.

The $517,279 the RCWE loaned to RCWE Holding Co. used approximately $221,000 in industrial partnership job training funds, leaving the WIB without job training funds available, Snyder said. The industrial partnership job training money is 25 percent funded by local industries for job training.

The CLEOs became the WIB’s oversight board last summer after a forensic audit by the Pennsylvania Department of Labor and Industry found questionable spending of job training funds. The audit covered the period July 1, 2009, through July 30, 2013, when the RCWE was the then-fiscal agent of the WIB.

The state audit looked at more than $6 million in questionable spending and found $227,476.29 in unallowed expenses by RCWE that Pennsylvania now wants repaid.

The counties, in turn, are looking to recover the $457,279 in outstanding balance on the RCWE loan to the RCWE Holding Co. as a way to repay the state. Snyder said he didn’t know when or if a formal lawsuit would be filed against the RCWE if negotiations for the $450,000 failed.

The counties then would seek repayment to the state through the RCWE’s errors and omissions insurance policy, but they would have to file a formal lawsuit, Snyder said.

“I think it’s essential,” Commissioner Jack Lynch, Crawford County’s representative on CLEOs, said of the unanimous vote to pursue a potential lawsuit against RCWE. “I don’t know if there is an alternative at this point.”

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