The state's highest auditor launched an investigation Tuesday into the Intergovernmental Cooperation Authority, Pittsburgh’s state-appointed financial overseer.
Pittsburgh Mayor Bill Peduto requested the audit in August, asserting the ICA has illegally withheld $12.8 million in state gambling funds the city earns by hosting Rivers Casino. The ICA was established in 2004 to help Pittsburgh avoid bankruptcy. It controls millions the state gives Pittsburgh every year and can disapprove city budgets.
“This is clearly becoming a challenge for the city and the ICA, and I thought by entering into this I could help resolve some of these differences to move the city forward,” State Auditor General Eugene DePasquale said at the Allegheny County Courthouse on Tuesday.
The authority has said it would withhold the money until the city establishes an in-house payroll system, which Peduto insisted would be in place by the end of 2015. Peduto filed suit against the ICA in July.
He told 90.5 WESA's Essential Pittsburgh at the time: “You (the ICA) have a mandate, we (the City) have a mandate. We have fulfilled ours; you have broken the law on yours. Now we’ll have a judge just come in and clear this mess up.”
DePasquale lacks the legal authority to audit city finances, but City Controller Michael Lamb said in July the city is on target to meet revenue expectations and possibly end with a surplus.
The review will take about six weeks, DePasquale said.
ICA Chairman Nicholas Varischetti said in a statement the authority is already working with the auditor. It's critical that a positive working relationship is re-established, he said.
"I am hopeful that the auditor general's involvement in this process will enable us to move this discussion toward a more cooperative working relationship," he said.
DePasquale called Pittsburgh's quarrel a state issue. He previously chaired a task force on municipal pension reform.
“There is growing bipartisan consensus that something has to be done on that as well," he said. "I looked at this as a further extension of my efforts to try to bring about municipal pension reform as well."
