Thursday, March 22, 2007

Cleaning up the PHEAA mess

Two Republican state senators plan to introduce legislation to bring some accountability and fiscal sanity to PHEAA, the student-loan agency that has wasted nearly $1 million to pamper its employees and the legislators who serve on its board.

It's about time.

State Sen. John Rafferty (R-Montgomery) and state Sen. Jane C. Orie (R-Allegheny) recently unveiled a plan to restructure the current appointment, reporting and accounting procedures of the Pennsylvania Higher Education Assistance Agency (PHEAA) board.

The legislation will require PHEAA to contract with a third party accounting firm to conduct an annual forensic audit of the PHEAA board which must be submitted to the House and Senate Finance Committees by April 1 of each year.

PHEAA would also be required on that date to submit a report to the Senate and House Finance Committees which contains all expenses and revenues associated with the operations of the PHEAA board.

Imagine that. An audit of an agency that spends hundreds of millions of dollars, much of it taxpayer dollars, during the course of the year.

Why didn't the executive director of PHEAA think of that? This legislation also requires that all appointees to the PHEAA board selected by the House and the Senate be approved by a majority vote in their respective chambers.

It would prohibit standing legislators from serving more than 2 consecutive terms on the PHEAA board. (Some of the current PHEAA board members have served for 20 years).

This is where it gets good. The PHEAA board, made up mostly of state legislators and members of Gov. Rendell's administration, has been asleep at the wheel for decades while the agency wasted hundreds of thousands of dollars.

Some familiar legislative names on the PHEAA board include Rep. William F. Adolph Jr., Sen. Sean Logan, Rep. Ronald I. Buxton, Sen. Jake Corman, Rep. Craig A. Dally, Sen. Jane M. Earll, Sen. Vincent J. Fumo, Sen. Vincent J. Hughes, Rep. Sandra J. Major, Rep. Jennifer L. Mann, Rep. Joseph F. Markosek, Sen. Michael A. O'Pake, Sen. James J. Rhoades, Rep. James R. Roebuck Jr., Rep. Jess M. Stairs, Sen. Robert M. Tomlinson.

"Our goal is to bring greater accountability and fiscal responsibility to PHEAA and ensure that funds are not spent in a wasteful or unnecessary manner," Rafferty said. "The recent stories of financial mismanagement and over-the top-spending have made it necessary for us to take a closer look at the agency’s fiscal bottom line."

Orie added that the legislation will ensure that PHEAA revenue is used for the purpose it was intended – to provide low-interest grants and loans to students.

"Lavish trips, tuxedos, and spa visits are not defensible expenses and should be stopped," Orie said. "This legislation will ensure that money is spent prudently and put PHEAA on notice that it has to be accountable to the Legislature and the citizens of Pennsylvania."

Ken Schaefer, chairman of Vote For Integrity, a citizens' watchdog group, has called for the immediate resignation of Richard Willey, president and CEO of PHEAA.

Willey, who makes $470,000 a year and was awarded a $180,000 bonus last year, should step down immidiately or be fired. The $900,000 was wasted during his tenure and the agency cannot regain public confidence as long as Willey remains CEO.

All incumbent PHEAA board members should also step down. These career politicians failed to perform their oversight duties over PHEAA.

(It's also interesting to note that most of the legislators on the PHEAA board voted themselves huge pay raises in July 2005. These people have a serious judgment problem.)

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