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Commonwealth of Pennsylvania House of Representatives Appropriations Committee Hearing Budget Hearing

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Commonwealth of Pennsylvania House of Representatives Appropriations Committee Hearing Budget Hearing COMMONWEALTH OF PENNSYLVANIA HOUSE OF REPRESENTATIVES APPROPRIATIONS COMMITTEE HEARING BUDGET HEARING STATE CAPITOL MAJORITY CAUCUS ROOM HARRISBURG, PENNSYLVANIA THURSDAY, FEBRUARY 22, 2007 1:00 P.M. VOLUME III OF V PRESENTATION BY DEPARTMENT OF AUDITOR GENERAL BEFORE: HONORABLE DWIGHT EVANS, CHAIRMAN HONORABLE MARIO J. CIVERA, JR., CHAIRMAN HONORABLE STEPHEN BARRAR HONORABLE SCOTT H. CONKLIN HONORABLE CRAIG A. DALLY HONORABLE GORDON DENLINGER HONORABLE DAN FRANKEL HONORABLE JOHN T. GALLOWAY HONORABLE WILLIAM F. KELLER HONORABLE THADDEUS KIRKLAND HONORABLE BRYAN R. LENTZ HONORABLE TIM MAHONEY HONORABLE KATHY MANDERINO HONORABLE MICHAEL P. McGEEHAN 2 1 BEFORE: (cont'd.) 2 HONORABLE FRED McILHATTAN HONORABLE DAVID R. MILLARD 3 HONORABLE RON MILLER HONORABLE JOHN MYERS 4 HONORABLE CHERELLE L. PARKER HONORABLE SCOTT A. PETRI 5 HONORABLE SEAN M. REMALEY HONORABLE DAVE REED 6 HONORABLE DOUGLAS REICHLEY HONORABLE DANTE SANTONI, JR. 7 HONORABLE MARIO M. SCAVELLO HONORABLE JOHN J. SIPTROTH 8 HONORABLE MATTHEW SMITH HONORABLE KATIE TRUE 9 HONORABLE GREG VITALI HONORABLE DON WALKO 10 HONORABLE JAKE WHEATLEY 11 12 ALSO PRESENT: 13 MIRIAM FOX EDWARD NOLAN 14 15 BRENDA S. HAMILTON, RPR 16 REPORTER - NOTARY PUBLIC 17 18 19 20 21 22 23 24 25 3 1 INDEX NAME PAGE 2 JACK WAGNER 4 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 4 1 P R O C E E D I N G S 2 REPRESENTATIVE KELLER: The hour of 3 one o'clock having arrived, I'd like to call 4 to order the meeting. 5 General, good to see you. 6 AUDITOR GENERAL WAGNER: 7 Mr. Chairman, thank you. Nice to be here. 8 REPRESENTATIVE KELLER: I guess you 9 know, as Chairman Evans and Civera have said, 10 that we're not going to do any opening 11 statements. We're going to go direct to 12 questions. 13 I'd like to call on Representative 14 Siptroth, please. 15 REPRESENTATIVE SIPTROTH: Thank you, 16 Mr. Chairman. 17 AUDITOR GENERAL WAGNER: 18 Representative. 19 REPRESENTATIVE SIPTROTH: Auditor 20 General. 21 AUDITOR GENERAL WAGNER: How are you 22 today? 23 REPRESENTATIVE SIPTROTH: Good to see 24 you today. 25 For the benefit of some of the newer 5 1 members, including myself, would you offer the 2 various departments that you do audit in the 3 state? Would you offer the various 4 departments in the state that you do audits 5 for -- 6 AUDITOR GENERAL WAGNER: Yes 7 REPRESENTATIVE SIPTROTH: -- for us? 8 Thank you. 9 AUDITOR GENERAL WAGNER: Thank you, 10 Representative, for the question. 11 As Auditor General, it's important to 12 note that we audit virtually every department 13 of state government and a wide variety of 14 other entities that receive state taxpayer 15 dollars. Five hundred one school districts; 16 intermediate units; cyber chartered schools; 17 650 liquor stores; volunteer fire relief 18 associations, which is the financial arm of 19 volunteer fire departments; every state 20 department. It goes on and on. Nursing 21 homes, correctional institutions, state 22 universities, et cetera. 23 And I'm here today obviously to 24 address all of you for our 2007/2008 budget. 25 I very much appreciate the support that this 6 1 Committee and the General Assembly has given 2 the Department of Auditor General in the past, 3 and my request today is a request that is 4 slightly greater than what the Governor has 5 proposed. 6 Our budget in 2006/2007 is 7 approximately $50 million. I have to tell you 8 that $50 million goes a long way. This past 9 year we performed 4,836 audits. Many of those 10 audits were very lengthy, in-depth analysis, 11 performance audits, of state government. 12 Audits such as Megan's Law; SERS, the State 13 Employee Retirement System; PSERS, the Public 14 School Employee Retirement System. We 15 recently completed an audit of the gasoline 16 pump inspection program in the Commonwealth 17 and a variety, and I mean a wide variety, of 18 other audits. 19 Our request is slightly greater than 20 what the Governor's proposed suggestion is. 21 Our budget, as I indicated, was approximately 22 $50 million this present year. The Governor 23 proposed an additional one million one 24 thousand dollars for 51, approximately 51 25 million one thousand dollars. 7 1 We are requesting an additional $1.7 2 million and all of that additional increase is 3 a result of labor contracts. 4 We are a department that is heavily 5 dependent on personnel. We have our 6 approximately 750 auditors in the field every 7 day, all 67 counties of the Commonwealth of 8 Pennsylvania. We are a very mobile operation, 9 and the labor cost increase is that additional 10 $1.7 million. 11 In total our budget would be 12 approximately $52.7 million for fiscal year 13 2007/2008. That increase, again, is related 14 to labor costs. We feel very strongly that 15 those dollars will be well spent. 16 The Department of Auditor General is 17 two-tenths of one percent of the state 18 budget. And I would argue here today that the 19 taxpayers of Pennsylvania, the 12.5 million 20 taxpayers, get their bang for their buck for 21 us being the fiscal watchdog, making sure 22 there's no fraud, waste, and abuse in state 23 government. 24 REPRESENTATIVE SIPTROTH: Thank you, 25 Auditor General. As a treasurer of the relief 8 1 association of our local fire department, I 2 have direct contact with your auditors and 3 have been audited numerous times and have 4 served in that position for approximately 18 5 years now. So annually on a triangle basis 6 they do audit my books and I certainly hope 7 that doesn't become a conflict of interest 8 since I'm serving as a representative now. 9 But, nonetheless, I thank you very 10 much for your testimony and your budget 11 requests. 12 And, Mr. Chairman, that's all the 13 questions. 14 REPRESENTATIVE MCGEEHAN: Thank you, 15 Representative Siptroth. 16 I want to welcome you, Auditor 17 General Wagner. We're very glad to have the 18 testimony. To the rest of the state you may 19 be the Auditor General but among the House 20 members you're simply Representative Chelsa 21 Wagner's uncle. 22 AUDITOR GENERAL WAGNER: Thank you, 23 Mr. Chairman. 24 REPRESENTATIVE MCGEEHAN: For the 25 record I recognize Representative Reed. 9 1 REPRESENTATIVE REED: Thank you, 2 Mr. Chairman. 3 And thank you, Mr. Auditor General, 4 for appearing before us today. It's always 5 good to have another guy that spent a little 6 bit of time down at IUP down here in state 7 government, and we had Patrick Stapleton, Jr. 8 down here yesterday testifying before us and 9 he grew up in Indiana so it was great having 10 the Indiana County connections. 11 Before I read over some of the 12 Governor's budget book last night, I actually 13 didn't think I'd have any questions today; and 14 then, when you go through the particular funds 15 and requests, I think they're very reasonable 16 requests and you've done a pretty good job for 17 your term in office in executing the job of 18 Auditor General 19 Then I came along to the program 20 objective of the Auditor General, and I 21 actually came to something that kind of 22 compelled me a little bit. I want to dive 23 into it for just a couple moments. 24 It actually appears in the Governor's 25 executive budget on Page E 5.5. And I'm just 10 1 going to read the paragraph. The paragraph 2 states: The fiscal code also requires the 3 Auditor General to audit public assistance 4 payments to determine the eligibility of 5 persons receiving public assistance grants. 6 Recipients are subject to continuous audit. 7 These audits serve to adjust grants to persons 8 either ineligible or receiving over or 9 underpayments. 10 And I guess my first question would 11 be could you just give us a real brief 12 description of what programs under the 13 Department of Public Welfare your office would 14 audit? 15 I would assume Cash Assistance, 16 Medicaid, food stamps, volunteer management 17 care for long-term elderly. But could you 18 correct me if I'm wrong but those are not 19 programs you're auditing and could you expand 20 on that just real quickly please? 21 AUDITOR GENERAL WAGNER: Yes, 22 Representative Reed. I'll be happy to. 23 There are a wide variety of programs 24 within the Department of Public Assistance or 25 Public Welfare that we audit. We audit 11 1 routinely mental retardation facilities across 2 the Commonwealth. We audit camps where young 3 people are -- or correctional facilities where 4 young people are housed. We audit them also 5 on a regular basis. 6 We audit the county assistance 7 offices, of which there are over 100 of those 8 county assistance offices, on a routine 9 basis. 10 We don't audit every single 11 transaction that's part of those operations, 12 but we do random samples. 13 We have a number of complaints that 14 come into our toll free number, 1.800.922.8477 15 about potential fraud that exists within 16 public assistance. Generally speaking, those 17 individual items are turned over to the Office 18 of Inspector General of the Commonwealth.
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