PA Officials Seek Better Oversight Of State ‘Authorities’

By Dave Lemery | Watchdog.org

Pennsylvania is one of the states with the most units of government in the U.S. – third, after Illinois and Texas, according to the U.S. Census Bureau, with about 5,000. In addition to the typical local governments such as cities, villages, townships, counties and school districts, the state has another unit of government known as an authority.

The state has more than 1,900 of these entities empowered to “incur debt, own property and finance its activities by means of user charges or lease rentals.” Authorities are run by appointed boards and are exempt from paying taxes.

Responsibilities of authorities seen in Pennsylvania include sewage systems, mass transit operations, parking facilities, airports and more.

Legislators concerned about the lack of oversight of Pennsylvania’s authorities have introduced Senate Bill 597, which would give the state’s auditor general the power to examine the finances and operations of these entities to ensure that they comply with best practices and are appropriately using the funds collected. Currently, the auditor general’s office is only empowered to look at units of government that receive state funds, which includes school districts but excludes authorities.

The sponsors in the Senate of SB597 are state Sen. Patrick Stefano, R-Connellsville, and Sen. Kim Ward, R-Greensburg. The current auditor general, Democrat Eugene DePasquale, has come out strongly in favor of the legislation.

DePasquale appeared Feb. 21 before the Senate Appropriations Committee as part of annual budgeting hearings, and discussion of his push for oversight of the authorities dominated the early part of the proceedings.

In response to a general question from Sen. Mario Scavello, R-Tannersville, to explain the impetus behind SB597, DePasquale zeroed in on the subject of accountability.

“All of us, we stand for office,” DePasquale said. “If the public doesn’t like decisions we make, we can be voted out of office, and there’s an accountability measure for that. That’s whether it be the governor, myself, my fellow row officers, obviously members of the General Assembly, Congress, the president, across the board. … So many decisions have now been delegated to the authorities, many people don’t even know who sits on them, how they get appointed, and minus some malfeasance, their ability to be removed from office is very small.”

DePasquale said that the average Pennsylvania citizen doesn’t have much knowledge of the process behind the rates set by authorities.

“If you were, as members of the General Assembly, to hypothetically pass a revenue increase … voters can go to the ballot box and throw you out,” he said. “Sewer rates go up, and nobody even knows who the people are that are raising their sewer rates. … There is a board, but nobody, average people don’t even know where to go to lodge their complaints.”

DePasquale said that he would not be auditing each authority every year – he said that when it comes to Pennsylvania’s many school districts, his office gets to each one at least once in a four-year period.

“Clearly I would not be looking at all 1,900 authorities every year, I don’t think that would be a good use of taxpayer dollars,” he said. “But I think knowing that we could get to a couple a year would help keep them on their toes.”

Sen. Ward, the bill’s co-sponsor, asked DePasquale about a provision of SB597 that would require an authority subject to an audit to pay for the costs of the audit.

“One of the issues that the authorities talked about was, it’s going to cost them so much,” she said. “So is there an issue, a problem with saying, ‘OK, you don’t have to pay for an independent audit if the auditor general comes in and does this?’”

But DePasuqale said that by their nature, audits are money-saving measures.

“The idea that it would cost them money to do this is somewhat silly,” he said. “Every state agency is subject to me potentially auditing them. Every school district has me do the audits, and the idea is to actually save money or to make the operations better.”

Some authorities are so small, worried Sen. John Eichelberger, R-Hollidaysburg, that there’s no way they could support the cost of an audit.

“I was a county commissioner before I was in the Senate. We had some authorities that were pretty bad, and I was the number one complainer about that,” he said. “Generally, I think most of the small authorities that I work with now in the Senate that are small water and sewer authorities, things like that, they’re struggling to do the best job they can. Some of them, I think, the audit fees for a lot of these authorities, they can’t afford [that]. … They don’t have regular staff, it’s really a problem, but I just I’m concerned. I know there’s abuses.”

Appropriations Committee Chairman Patrick Browne, R-Allenton, admonished DePasquale that he shouldn’t be worrying about auditing authorities when there are other audits his staff could be doing that more clearly fit within his agency’s mandate. Browne asked DePasquale how much auditing his agency was doing of private companies that have contracts with the state.

“Section 403 [of the law establishing the Auditor General’s Office] … delineates associations, corporations, public agencies or any person [that gets state money as being subject to audits],” Browne said. “So until that is done, I’m not sure that the responsibilities under Section 403 are actually being met. And listen, if there’s not the capacity to do it, then we have to talk about that.”

“I agree that that is a responsibility, and I would also agree that we don’t currently have the capacity to go after all of it,” DePasquale replied.