Pa. auditor general to audit ECGRA in response to request from state lawmakers

The state Auditor General’s office intends to conduct an audit of the Erie County Gaming Revenue Authority, according to a Feb. 20 letter from state Auditor General Tim DeFoor.

The letter was sent to state Sen. Dan Laughlin, along with a slate of state lawmakers and Erie County Executive Brenton Davis, all of whom requested the audit due to their concerns about the distribution and reporting of gaming revenue in Erie County.

DeFoor indicated that he “cannot make any guarantees” on a specific timeline for the audit.

Erie County Public Information Officer Chris Carroll said the administration was excited by DeFoor’s decision.

“This is an opportunity to answer some questions that have lingered, that previous administrations and previous council members have brought up for years,” Carroll said. “It’s a ‘look under the hood’ to make sure that we’re handing this money out legally and appropriately in the way the gaming law outlines.”

ECGRA Board Chairman Dale Barney said ECGRA will fully cooperate with the audit and that the authority has "nothing to hide."

"We've always been transparent," he said. "So if they find something, it would be an honest mistake and we'd have no problem correcting it. We do an audit every year."

Questions surround necessity and motivation behind audit

DeFoor’s letter comes after Laughlin, Davis and five other lawmakers co-signed a Feb. 1 letter to ECGRA, indicating they were compelled to request a state-level audit because of “collective concern regarding information we have received” about ECGRA’s financial practices.

The letter, which was sent by Laughlin’s office, was signed by Davis, along with Republican state Sen. Scott Hutchinson; Democratic state Reps. Pat Harkins and Bob Merski; and Republican state Reps. Jake Banta and Brad Roae.

The letter didn’t specify what “information” they received. However, it cited an example of how “reports of the uses of (gaming) funds” were not being reported on the ECGRA website or any public forum as required by state gaming laws.

ECGRA Solicitor Tim Wachter informed the ECGRA board in a Feb. 6 memo that Laughlin had contacted his office about the matter and that ECGRA addressed the issue within a day.

“The senator disagreed with the monthly disclosure regime that ECGRA had undertaken since 2017 and was of the opinion that the reports should be listed cumulatively, and with more detail,” Wachter stated. “Upon notifying the ECGRA staff of the senator’s desire, the staff uploaded all such financial materials within 24 hours of being notified of the request.”

Wachter added, “I have reviewed the financial reports that are on the website and have found them to be comprehensive and in line with the senator’s desire. I see no legal concerns with the disclosures nor with compliance with the provisions of (gaming law).”

The Erie Times-News reached out to Laughlin to inquire about his additional concerns surrounding ECGRA but was unable to reach him.

Erie County Council Solicitor Tom Talarico notified Laughlin in a Feb. 14 letter that council questioned the “source and validity of the information" he received and the basis of his inquiry into ECGRA.

"If you have any so-called 'information' regarding the propriety of the manner in which the Gaming Authority has paid its staff or distributed gaming revenue, County Council would like to see it," Talarico wrote.

Merski said he became aware of issues surrounding ECGRA because of recent news media coverage, which had been reporting on Davis' public scrutiny of the authority.

Accountability or overreach?

In recent weeks, Davis has taken aim at ECGRA for its operating costs and executive director’s salary; rebuked it in the news media as a “slush fund of walking-around money;” and floated the idea of dissolving the ECGRA board altogether, placing all gaming revenue funding decisions squarely in the hands of county government.

Davis has blamed the news media for politicizing his comments and argued his goal is merely accountability of all authorities that dole out taxpayer money.

He's requested an exhaustive list of financial information from the authority and, along with Laughlin, requested the authority refrain from any long-term obligations, such as renewing ECGRA Executive Director Perry Wood's contract, until the state audit was done.

The ECGRA board voted 4-2 in favor of Wood's contract extension at their Feb. 15 meeting.

Barney has characterized Davis’ actions as an “overreach.”

“We are troubled by the continual overreach and untrue accusations of mismanagement being leveled by County Executive Davis,” Barney stated in a Feb. 5 letter to Laughlin. “There is no evidence to support any of his accusations and there is no reason for any additional audit, particularly considering the annual audit being performed by accounting firm Maher Duessel is currently underway. Per our charter we perform an independent audit every year.”

Board members Whitey Cleaver, Kelly Hess and Angela Amatangelo signed onto Barney’s letter.

"It's strictly political," Barney told the Erie Times-News of Laughlin's request for a state audit. "But since it's been decided that that's what the auditor general would like to do, we're in cooperation with them. We have no problem with it."

A.J. Rao can be reached at arao@gannett.com. Follow him on X @ETNRao.

This article originally appeared on Erie Times-News: Pa. auditor general to audit Erie County Gaming Revenue Authority