At a press conference to announce a new fraud hotline this morning, Pittsburgh Controller Michael Lamb heaped criticism on the mayor's administration, accusing finance department employees of mislabeling funds that came into the police bureau's special events office.
Mr. Lamb, who is running against Mayor Luke Ravenstahl, said the way the city finance department accounted for the funds may have provided the opportunity for fraud. Federal authorities are now investigating allegations that funds were misappropriated from the special events office, which organizes off-duty security jobs for police officers.
At issue is the hundreds of thousands of dollars the city is supposed to recoup in a surcharge to businesses that hire police officers through the special events office, which also is being audited by the controller's office. Businesses also get billed for officers wages, so all of that money was being accounted for in a single line item for premium pay, which is used to pay wages for officers' private security details.
It has the effect of "padding" that line item, allowing the bureau to spend more than it is allocated or providing the opportunity for undetected theft, he said.
"If someone were going to pilfer checks, it would have gone unnoticed because there was still money in those accounts," he said.
Mr. Lamb blamed this on the city's Office of Management and Budget because it was labeling the funds to go into the premium pay account. He reported the accounting practice to federal authorities investigating the special events office.
"It's not accurate," he said.
City finance director Scott Kunka has said that Mr. Lamb was responsible for keeping an eye on the funds.
"The controller is supposed to audit to make sure it's correct," he said in an interview earlier this month.
Mr. Lamb said recent events have demonstrated the necessity for a fraud hotline, which will allow city employees, city vendors and members of the public to report fraud and misuses of taxpayer dollars by calling 412-255-4777. The hotline, which will be manned by auditor Ryan Herbinko, will go live on March 1.