Pennsylvania Auditor General Eugene DePasquale says forensic audit of Pittsburgh ICA 'very likely' | News | Pittsburgh | Pittsburgh City Paper

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Pennsylvania Auditor General Eugene DePasquale says forensic audit of Pittsburgh ICA 'very likely'

Investigation would also include 2004 legislation that set panel up without proper oversight

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Pennsylvania Auditor General Eugene DePasquale talks with City Paper editor Charlie Deitch about ongoing troubles with the Intergovernmental Cooperation Authority - PHOTO COURTESY OF OFFICE OF AUDITOR GENERAL
  • Photo courtesy of Office of Auditor General
  • Pennsylvania Auditor General Eugene DePasquale talks with City Paper editor Charlie Deitch about ongoing troubles with the Intergovernmental Cooperation Authority
On April 6, Pennsylvania Auditor General Eugene DePasquale told City Paper that his office is "very likely" going to conduct a forensic audit of the Intergovernmental Cooperation Authority, the city of Pittsburgh's besieged financial watchdog. And, DePasquale said, the audit won't just look at the ICA's actions, but also the legislation that authorized it in 2004.

The auditor general was asked by several Democratic state legislators as well as Pittsburgh Mayor Bill Peuto to conduct the audit in light of a Pittsburgh Tribune Review investigation that found records at the agency had been destroyed over the years. The investigation also looked into the financial troubles of its executive director, Henry Sciortino. On April 6, DePasquale released a statement from his office saying he would make a decision on the audit next week.

Speaking to CP later that afternoon, however, DePasquale confirmed that the decision has pretty much been made. DePasquale's team has already done an audit of the ICA in an effort to help settle a dispute between the ICA and the City of Pittsburgh over the release of gaming revenue into city coffers. Currently, by legislation, the gaming money is passed through the ICA. In recent years, however, the ICA has refused to release those funds and held them as leverage over the city to force its hand to make certain budgetary decisions and cuts. The office, DePasquale said, was a mess even at that time.

"When we went in last time, it was to try and help resolve the dispute over gaming money," DePasquale said. "We did note that they weren't following good record-retention practices, and we put that in our report and said they should change that. These allegations take that to a whole new level. The agency needs to change because this is unacceptable behavior if the allegations are correct.

"If we go again, and let me tell you, it's very likely that we will, our efforts will go well beyond just helping with the gaming money."

Among the allegations pointed out in the Trib investigation is that nearly all records of the ICA's spending have been destroyed. In addition, all contracts were destroyed, mostly "no-bid contracts to unnamed vendors." Allegheny County District Attorney Stephen Zappala has also announced that he would be conducting an investigation of the ICA. But how do you audit an agency when no records exist?

"You go into bank accounts, and you follow the money, DePasquale said. "There's always a trail. Somebody got paid, so there has to be a check or a wire transfer somewhere. Those contracts exist somewhere."

In 2012, CP  wrote about the lack of oversight and record keeping at the ICA. At that time, Sciortino and board members were not as forthcoming with how the agency's state allocations — then $5 million — was spent. Sciortino has collected a salary of $12,000 per month. In addition, the agency may have also been spending the interest earned on the city's gaming money. Again, no information was released on how that money was spent. The ICA failed to answer tough questions then and has been protected from doing so because the legislation that established the body didn't establish any oversight. When the city was placed under financial oversight in 2004, Republican state Rep. Mike Turzai and then-state Rep. Jane Orie insisted on the set up of the ICA and gave it the power it has enjoyed since then.

"Regardless of what happened now, the seeds of this were sown at the creation of the law when no one was given specific oversight authority, be it the attorney general, the auditor general or the county controller," DePasquale said. "Secondly, they weren't placed under the state's record-retention laws." 

When asked if he thought that was an unintentional or deliberate action by the legislature, DePasquale said: "I have to be open-minded on that question. But we will ask that question as well."

Once the forensic audit is complete, DePasquale said he will pass the information he finds, if any, on to Zappala for any further action. Zappala will then make the decision whether further legal action will be taken.

"What's going on there is either poor record-keeping or destruction of records," DePasquale said. "Either way, it's bad."

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