Monday, April 2, 2007

Suckers in the Allegheny

Most people who catch suckerfish, like the Redhorse Sucker pictured above, throw them back into the Allegheny River. That's one of the reasons why the Allegheny River and County is full of suckers. Suckers for wanting a boy mayor to learn-on-the-job, for pursuing low yielding resource-consuming investments (see "Money Talks" in today's PG letters, for example) and for electing officials who shy away from the essential functions of their office.

Today, the PG reports:

Allegheny County Controller Mark Flaherty will audit the Port Authority's ledgers and help provide oversight of spending and other financial matters at the troubled county entity.

It's believed to be the first time that the controller will be so actively involved in the agency, which has operating and capital outlays approximating $400 million a year, including $25 million of county funds.

"We've invited the elected, independent controller to look at the problems we've discovered and changes we think need to be made," Mr. Onorato said. "We think this will be a helpful tool" in view of the crisis facing the Port Authority. The agency last week approved a 15 percent service cutback.
This is the first time that the controller will be actively involved in the agency? An authority to which the county turns over $25 million annually? Mr. Onorato thinks that inviting the elected, independent controller will be a helpful tool. Onorato said the fiscal 'crisis' has been years in the making. Why didn't he assign Flaherty to oversee the budget when he stepped into office 3yrs ago. Why didn't Flaherty assert his rightful authority to oversee the Port Authority's budget so as to ensure the sustainability of such an important piece of the region's economic infrastructure? Why is this the first time the controller will be actively involved in the Port Authority?

From the Trib:
The audit appears to be the first by the controller's office of Port Authority, which has "resisted" previous interest by the county's elected auditor, said county Chief Executive Dan Onorato.

"It's going to be this administration that's going to fix the problem," Onorato said during a morning press conference in his office.
The authority requested Flaherty's involvement. Onorato called Flaherty on the authority's behalf Friday afternoon after the transit agency's board approved cutting routes and scaling back management benefits to cut costs.

The controller's office generally has not been welcome to audit financial records of many authorities, including Port Authority, Onorato said. The county contributes $25 million a year to Port Authority's budget.
So, what Onorato is saying is that only when he thinks it is important to keep the political heat off himself will he call the controller on the Port Authority's behalf to audit its budget. That doesn't seem to be an acceptable policy for fiscal responsibility. In fact that seems to be part of the process that got us into this mess and motivation for his challenger Rick Swartz to call for opening up the process of governing. Reframing this issue, it seems that Onorato's administration has been 'weak' on overseeing the management of public monies for public transit.

The Port Authority "resisted", the controller's office "not welcome"? Does that mean an armed resistance? Does that mean they basically told the county to "screw off" when it asked questions about the $25 million it hands over each year? Does that mean the county controller and executive respond by saying, "duh, ok" and turn around to walk home when the Port Authority doesn't want to turn over its books to be audited? Any other organization that receives $.50 from the county would have to jump through all kinds of hoops to account for their spending of county money. No, the controller IS mandated to audit all county expenditures and failed to be responsible to the taxpayers. From the controller's office:
The Controller is the chief elected fiscal officer of Allegheny County and provides general supervision and control of the County's fiscal activities.

The Controller has the responsibility to prescribe and maintain the accounting systems of the County and the authority to conduct audits of all County expenditures and offices. The Controller is the final, independent check on the fiscal activities of the executive and legislative branches of County government, as well as the independently elected row offices.

Even better, the Audit Services Division of the office:
  • To examine and inspect books, records, files, papers, documents and information relating to all financial affairs of County offices and departments, political subdivisions and organizations which receive appropriations from the County.
  • To review both the administrative control and internal control systems as established by row officers and department heads, and to determine that such control systems are adequate and effective in reaching their goals.
  • To hold County officials accountable in their use of public funds and other resources at their disposal. This includes examination of financial statements and the legality and prudence of expenditures; the efficient use of resources including the elimination of wasteful practices; and the satisfactory implementation of programs.
  • To determine whether County programs are achieving their desired objectives.
  • To issue Audits & Reports resulting from post-audits of County departments and agencies detailing findings.
What happens in the future? What will Onorato put in place so that these kinds of crises are prevented? What are the controller candidates going to do about auditing the county funds used by the Port Authority? Onorato says it's going to be 'this' administration that's going to fix the problem but it seems as though 'this' administration was part of the problem in overlooking the financial management of the Port Authority. Controller candidates certainly have an opportunity before them. I don't wanna be a sucker.


EdHeath said...

Well, I gotta differ a bit here, the County’s contribution is one 16th of the operating budget and capital outlays. I think the county should know what agencies are doing if it gives money to them, I think the county should look at any county funded agency’s books and annual report. But to go in and do an audit, where you start pulling receipts and invoices, where you go into bank accounts and desks, and then “provide oversight” of spending? The Port Authority is not, strictly speaking, a County agency, it is an Authority. Steve Bland does not report to Dan Onorato, not even 1/16th of Steve Bland.

That, said, this is a shrewd move by the Port Authority and an ambitious County Executive. The state legislature hardly wants to increase funding, they seem annoyed that PAT gets as much as it does. And PAT has not helped its case with the various mini scandals it has had, like renting that Heinz Building space when it has a building on the North Side. But pulling in the County auditor relieves some pressure on the Authority. An outside auditor gives the Authority more legitimacy for its costs.

I don’t think this is really about rules and regulations, I think the monopoly party will push anybody’s spending to the ethical edge of the envelope as best they can. This story is about political expediency, and what the market will bear.

I my opinion, the County may have wanted to stay away, or at least might want to dis-entangle themselves as soon as possible. Now if the Authority raises rates or cuts routes, or even just has a mini-scandal, people will say “Where was the county in all this?”

Although when I say I differ, this is still a quite good post, imho.

Skip said...

Ed, hear ya. I see how I use 'audit' and 'reviewing how tax dollars are spent' interchangeably. You say that, "This story is about political expediency, and what the market will bear" and I couldn't agree more, particularly when you look at how the authority decided which routes would be cut. They were based on ridership and not neighborhood need, without considering inefficiencies in other routes.
It seems like a couple of folks whose letters to the editor today are on the same line of thinking as this post. See Mr. Santarcangelo's letter for example.

Mark Rauterkus said...

Well, the Allegheny Controller is 100% of the job of Controller in the county.

Furthermore PAT operates 100% within Allegheny County.

So much for 1/16th of the county contribution.

MPF (present controller) and Dan Onorato (past controller) have been sleeping on the job. Sleeping is nice. They've been more like dead than alive.

The move isn't shrewd. It is too little, too late.

Of course Onorato and his buddies wanted to dis-engage and dis-entanle. That's what they've been doing, nothing.

Rocking the boat causes waves, takes energy and isn't the best way to make friends. Being honest is often 'brutal.' But, that 'tough love' is what we need for all agencies and authorities.