LAWRENCE COUNTY Former commissioners say they didn't know $1M was missing
The treasurer says there probably wasn't enough cash to repay the loan.
By LAURE CIOFFI
VINDICATOR NEW CASTLE BUREAU
NEW CASTLE, Pa. -- The fact that $1 million was unaccounted for in Lawrence County's budget last year is news to two former county commissioners, they said.
Roger DeCarbo and Brian Burick, who both left office at the end of 2003, say they knew money was borrowed from other county accounts at the end of 2002 to help pay year-end bills, but they believed the county treasurer would repay it. The third commissioner, Ed Fosnaught, who remains in office, also said earlier this week that he was unaware that the money had not been repaid to the accounts from which it was taken.
No one thinks the money was stolen, but it's just not clear how it was spent.
Learned of loan
The current board of county commissioners learned June 3 that the county borrowed $4 million from the Mental Health/Mental Retardation budget in December of 2002 and only $3 million has been paid back. An additional $400,000 was borrowed from Hill View Manor and was also paid back.
"The treasurer asked if -- to keep the bills being paid -- can he transfer money from one fund to another. We told him 'Sure, do what you have to do,'" Burick said. "I never knew where he made these transfers from. We assumed if he transferred it, it was his responsibility to transfer it back."
Active role
But Treasurer Gary Felasco says the county commissioners had a much more active role in the matter. He said they discussed which accounts could be used.
Felasco contends that the commissioners knew where the money came from and that they hounded him to repay the $400,000 to the Hill View Manor account. He said he wasn't questioned by commissioners about repaying the Mental Health/Mental Retardation account.
Felasco can't explain why it wasn't repaid, but indicated it was probably because the money wasn't available to repay it.
He said he made no attempt to tell commissioners that the $1 million was not repaid when they were working on the 2004 budget. He contends he was shut out of budget talks.
But Burick and DeCarbo both say Felasco was invited to budget meetings and chose not to attend.
"We couldn't get him to come to a meeting last year," DeCarbo said.
It's not clear how closely Felasco monitored the repayment of funds.
He said when auditors alerted the county that the $1 million was not returned to MH/MR, he did recall the 2002 transfer. Felasco said he wasn't sure if it had been paid back.
"I knew we had borrowed money from MH/MR, but you can't expect people who work with numbers every day to remember that off the top of their head," he said Friday. "Apparently that money was left in the general fund and used for expenses."
Log of loans
He said his office does keep a paper log of loans from various county accounts to the general fund, but he could not produce it Friday because the woman who handles it was off work.
"I take just as much responsibility for this as everyone else should. Everyone needs to step up to the plate. A lot of people, including myself, clearly dropped the ball on this one," Felasco said.
Fosnaught has questioned why Felasco, Controller Mary Ann Reiter and MH/MR Director John Klenotic were not aware of the matter.
Klenotic said his office was not informed that money had been taken from its accounts by the county.
Reiter said her office can't track the money because it wasn't provided paperwork for it by the treasurer's office.
Commissioner Dan Vogler said they are still waiting for auditors to complete their work to determine what happened to the money. He said he hopes the state will permit them to repay it in increments.
Stacey Ward, spokeswoman for the Pennsylvania Department of Welfare, the entity that oversees Mental Health/Mental Retardation funding, said state officials are also looking into the matter.
She said it isn't uncommon for all counties to borrow funds from MH/MR accounts to help their cash flow.
cioffi@vindy.com