Pennsylvania mayor won’t comment on whether the misuse of transit agency funds was criminal, but adds, “I didn’t know it was that bad.”
WILLIAMSPORT – The mayor of Williamsport is hesitant to say whether the embezzlement by the city’s Transportation Bureau as identified by auditors amounts to the level of crime.
“I will let the facts unfold,” Mayor Derek Slaughter said Friday after the report was released.
But, he cited terms used by listeners, Lancaster’s RKL, at two town hall meetings that included fraud, illegality, impropriety, shell play and commingling.
RKL has no comment beyond what is in the report, a spokesperson said.
Slaughter called the report a ‘blister’ and said, ‘I didn’t know it was that bad. “
Auditors found that state and federal public transit funding was repeatedly used to pay for expenses on behalf of other entities.
The report might just be the first shoe to drop. Local authorities are awaiting the outcome of an investigation by the state attorney general’s office that has been ongoing for months.
The office, River Valley Transit (RVT), has been made aware of some grants and other activities are under review by various state agencies.
The discovery that management used operating funds to pay for debt service and other ineligible expenses could lead to future denial of funding, the audit report said.
RKL discovered that management had the ability to bypass financial controls and recommended corrective actions, including a way in which employees could anonymously report non-compliance with policies.
“The audit procedures performed revealed the inappropriate use of grant funds as well as inadequate records to support the expenses funded by the grant,” the report said.
“Due to these questions, we have not been able to determine whether the amounts reported as assets held, liabilities incurred, income earned and expenses incurred, grants receivable or deferred income were correctly reported” as of June 30, 2020.
RKL is of the opinion that the financial statements of the office for this year do not fairly present the position of the office.
Uncertainty over the city’s financial situation makes it difficult to prepare a 2022 budget, Slaughter said. The results of the city’s financial audits for the past two years which are expected could provide more information, he said.
RKL’s Mark Zettlemoyer pointed out at Thursday’s city council meeting that it is possible that the Pennsylvania Department of Transportation could seek reimbursement for poorly spent money or cut funding to make up for it.
According to the report, the auditors also found:
There was a shortfall of $ 11,222 on the local amount of $ 405,909 required for a PennDOT operating grant and $ 36,906 recorded as coming from suburban communities towards this twinning was not received.
RVT used without PennDOT’s approval $ 61,675 of public funds to purchase three pickup trucks, then reimbursed the Commonwealth by taking the same amount from fees collected for running the Endless Mountain Transportation Authority in Bradford County.
Zettlemoyer, in one of his presentations, called it a kind of shell game.
When Slaughter took office in January 2020, he immediately fired William E. Nichols Jr., who had been RVT’s general manager since 1978. He was also the city’s chief financial officer.
Adam Winder, since becoming chief executive, has worked closely with PennDOT to ensure the office is in full compliance, the mayor said.
RVT serves most of the populated area of Lycoming County and provides service from Williamsport to Lock Haven on Fridays and Saturdays.
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