Audit Report

Mayor Arnold W. Webster yesterday called on state officials to release the findings and recommendations of a team of auditors that began combing through the city's finances last summer. A state official responded that the efficiency report could not be released yet because it was not finished. In May, Webster invited the state Treasury Department to audit Camden's finances, at no cost to the city. The mayor said he hoped his administration and the city's residents would learn, from an objective source, exactly where the city stood financially.

SEPTA General Manager John K. Leary Jr. has proposed giving a $535,000 contract to a Chadds Ford consulting company that became embroiled in controversy last year when it was tapped to audit the transit authority. The proposed contract calls for Phoenix Management Services Inc. to develop a computerized system for managing bus maintenance. It is expected to be approved by the board at a meeting today, according to SEPTA officials. Under the earlier $295,000 contract awarded to Phoenix in December, SEPTA was given an option to retain the firm for help in carrying out proposals made in the audit.

The Montgomery County controller said Tuesday he had found "lax oversight" and "the potential for impropriety" in an audit of legal fees paid by the county from 2008 through 2011. Controller Stewart J. Greenleaf Jr., a Republican, applauded steps taken last month by a new Democratic-controlled administration in Norristown to address some of the problems. But he said the steps fell short of fully reining in potential abuses, by continuing to permit lax standards — "a loophole," he said — for the preferential awarding of contracts to firms that are small, local, or owned by minorities.

Gov. Ridge's nominee to head the state's Department of Labor and Industry won the support of a Senate panel yesterday after he responded to questions about his actions at a federal agency. The Senate Labor and Industry Committee questioned Johnny J. Butler about outside legal work performed by lawyers who worked under him at the Equal Employment Opportunity Commission's (EEOC) Philadelphia office. Butler told the committee he was "not in Philadelphia at the time" that lawyers in the EEOC office engaged in practices that ultimately came under internal investigation.

A Defense Department inspector general's audit report on the negotiations between the Air Force and the Boeing Co. on a new aerial refueling tanker indicates that investigations into possible criminal conduct have widened, according to officials who are knowledgeable about the report. The report finds that the Air Force tailored the contract specifications to the Boeing 767, and the Air Force and Boeing failed to meet important requirements that would make the aircraft fit for war, the officials said, speaking on condition of anonymity.

The Delaware County Intermediate Unit Board of Directors has appointed Thomas Pivnichny, director of vocational education and an administrative assistant with the Lower Merion School District, to a one-year term. Pivnichny, 42, who was appointed Thursday night, will receive an annual salary of $52,500. He will supervise the county's vocational-technical schools in Aston, Folcrost and Marple. He replaces Merrill Hughes, who retired last month . Pivnichny will assume his new position as soon as he reaches an agreement with the superintendent of Lower Merion School District.

Despite cries of foul from State Auditor General Barbara Hafer, Gov. Casey's budget office yesterday released the final report of a critical performance audit of Hafer's department. Earlier this month, Hafer fired a round of complaint letters to state and national accountancy boards, alleging misconduct by Coopers & Lybrand, the firm commissioned by the governor's budget office to conduct the audit. Although the budget office highlighted the critical audit findings, Hafer was generally cautious in her reaction.

Willistown earned more than $19,000 in two years on a fund earmarked for road improvement and repair, township officials said this week. At the Board of Supervisors meeting Tuesday night, Chairman D. Garth Wise said Willistown topped the list of Chester County municipalities to earn the most on funds generated by the state liquid-fuels tax, according to an audit report sent to the township by state Auditor General Don Bailey. Each year, the state collects a tax on gasoline, fuel oil and other liquid fuels and distributes a portion of the money to municipalities for road repair, Wise said.

In what is viewed by some as an unprecedented move, Chester County's president judge met yesterday with several workers from the county probation office to clarify issues surrounding rumored pay increases. In an interview before the meeting, Judge Howard F. Riley said he would tell employees that because of hourly pay discrepancies between adult and juvenile probation officers, the county is in danger of losing more than $600,000 in state grant money. Although the two groups of officers earn the same pay on an annual basis, the juvenile probation officers work a 37.5-hour week while the adult group works a 40-hour week.

The Montgomery County controller said Tuesday he had found "lax oversight" and "the potential for impropriety" in an audit of legal fees paid by the county from 2008 through 2011. Controller Stewart J. Greenleaf Jr., a Republican, applauded steps taken last month by a new Democratic-controlled administration in Norristown to address some of the problems. But he said the steps fell short of fully reining in potential abuses, by continuing to permit lax standards — "a loophole," he said — for the preferential awarding of contracts to firms that are small, local, or owned by minorities.

THE CITY controller's Valentine's Day gift to the school district came in the form of an audit report questioning its ability to survive. Gerald Micciulla, a deputy city controller, pointed to the district's budget shortfalls and said there's uncertainty "about its ability to achieve cost savings and obtain additional funding to overcome" them. "These conditions raise substantial doubt about its ability to continue as a going concern," he wrote. That one line in the district's internal audit of its books for the 2010-11 fiscal year could make it more expensive to borrow money.

The School District of Philadelphia's new chief recovery officer responded Friday to the city controller's request for information about bridging a funding gap of at least $61 million by June 30. But City Controller Alan Butkovitz said he was not sure whether the district fully had addressed his concerns about the school system's financial viability. He said an initial review of the responses contained in the three-page letter from Recovery Officer Thomas E. Knudsen "has done little to satisfy our concern, but there are ongoing written communications going back and forth to clarify our respective positions.

The School District of Philadelphia's new chief recovery officer Friday responded to the city controller's request for information about bridging a funding gap of at least $61 million by June 30. But City Controller Alan Butkovitz said he was not sure whether the district fully had addressed his concerns about the school system's financial viability. He said an initial review of the responses contained in the three-page letter from Recovery Officer Thomas E. Knudsen "has done little to satisfy our concern, but there are ongoing written communications going back and forth to clarify our respective positions.

Boeing Co. charged the Army excessive prices for helicopter spare parts, including $644.75 for a tiny black plastic motor gear that cost another Pentagon agency $12.51, according to a report by the Defense Department's inspector general. Boeing this year refunded $556,006 on the "spur gear" after an audit draft was issued. The contractor issued an additional $76,849 Army refund for a dime-sized plastic "roller assembly" that costs $7.71; Boeing charged the Army $1,678.61 apiece.

In late 2009, a federal auditor drove around Philadelphia to inspect 67 homes occupied by low-income families receiving Section 8 housing subsidies through the Philadelphia Housing Authority. He took along an appraiser. To escort them, PHA dispatched an employee and Section 8 expert - plus three outside attorneys who charged $330 an hour, or about $8,000 a day. For up to eight hours a day over two weeks, the entourage traipsed through homes, often getting in the way of families, never asking a question but sometimes taking notes.

I am concerned about the editorial "Records aren't reliable" (Wednesday), regarding an audit report released by the City Controller's Office. The report covers the time period of 2006-2008, three fiscal years, of which I worked seven days (I was appointed June 23, 2008). Furthermore, to say that this problem has continued under my administration is false. We have implemented policy and procedures to clean up the problems we inherited. We shared all of this with the controller's office and your Editorial Board.

The former chief executive of the Philadelphia School District yesterday disputed an audit that challenged how the district spent $140 million in federal grants during his watch. The audit contends the district failed to follow federal rules in spending the grants in 2005 and 2006. It calls for the district to repay about $17.7 million to the Department of Education and to provide "adequate documentation" to justify an additional $121 million. "Nowhere in the report does it suggest officials engaged in the misappropriation of federal funds during the audit period," Paul Vallas said yesterday.