ICA: Fed probe may impact funding

Published by Tim McNulty on .

The head of the state fiscal oversight board sent the Ravenstahl administration a tough letter recently taking it to task for dragging its heels on financial software, buying security cameras without budget approval and not gaining approval from nonprofits for ongoing payments into the city budget -- as well as getting entangled in a federal investigation, which it warned could jeopardize its state funding.

If the board doesn't get an explantion, chairman Dana Yealy wrote, it "is prepared to take appropriate action" at its next meeting on Wednesday.

The board controls all gambling revenues earmarked for the city of Pittsburgh's use, so could turn off the spigot (something it has flirted with before to the Ravenstahl admin's annoyance), force it to resubmit another 2013 budget, or take other actions.

The administration and the Intergovernmental Cooperation Authority have long fought over buying a new financial managment system for the city. The letter Yealy sent to city budget director Scott Kunka June 7 also questions the way it purchased security cameras for Homewood using 2014 capital funds that haven't yet been budgeted (a complaint repeated by two council members) and a contention by Kunka in May that nonprofits will continue to pay the city $3.2 million annually after 2013. The ICA discussed the contribution with nonprofit leaders and found that was not the case.

Yealy ends his letter by tying its problems with the city's fiscal oversight to an ongoing federal probe (which led to charges against former Police Chief Nate Harper) that has also reached the mayor's office:

As you know, the ICA has designated the use of Act 71 [gaming] funds for certain specific legacy-related purposes, such as pensions, the OPEB trust, and worker compensation obligations. However, in light of the current federal investigation, the continuing revelations of the facts surround the indictment of Mr. Harper, and the ongoing forensic investigation currently underway by Gleason & Associates, you are hereby on notice that no further Act 71 funds for these or other purposes will be released to the City until the ICA Board is satisfied by the internal controls in place at the City to ensure that these funds reach the recipients for which they are intended.

The full letter is below:

 ICA letter to Kunka June 7 2013

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