Wednesday, April 18, 2007

Cleaning up the mess at PHEAA

Say goodbye to the $150 cigars, the $10,000 bar tabs, the gourmet meals and those facials and foot rubs.

The days of living large at the Pennsylvania Higher Education Assistance Agency appear to be coming to an end. It was great while it lasted.

Pennsylvania Auditor General Jack Wagner announced his department plans to audit PHEAA in light of the $750,000 in questionable spending by the agency in recent years.

On Wednesday, state Sen. John Rafferty, R-44th Dist., said he has asked a Senate committee to hold hearings on PHEAA expenses.

The jig is up, boys.

Rafferty has also introduced legislation to shake up the PHEAA board, which is made up mostly of fellow lawmakers who have been asleep at the wheel while PHEAA employees lived the lifestyles of the rich and famous on money that could have been used to provide grants and loans to Pennsylvania college students.

In a release announcing the hearings, Sen. Raffery said he is "outraged by the excessive and wasteful spending by PHEAA" and wants the Pennsylvania Senate Republican Policy Committee to conduct public hearings in May on the policies regarding expenditures of PHEAA employees and board members; and review legislation to provide better oversight.

Over the last few years, lavish expenses for board members and employees for trips, spas, golf, alcohol and even falconry lessons were approved, according to Rafferty.

Sen. Rafferty has introduced legislation that will require PHEAA to contract with a third party accounting firm to conduct an annual forensic audit of the PHEAA board that 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 that contains all expenses and revenues associated with the operations of the PHEAA board.

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 two consecutive terms on the PHEAA board.

"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."

Among the legislators serving on the PHEAA board are 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; and Sen. Robert M. Tomlinson.

No response yet from PHEAA President and CEO Dick Willey to Rafferty's call for Senate hearings, but Willey did issue a statement regarding Wagner's call for a performance audit, essentially saying, "Bring it on."

"PHEAA is typically audited more than 40 times every year by our regulating authorities and other entities," Willey said. "We have become very accustomed to the auditing environment and take advantage of audits to not only validate, monitor and account for our financial and compliance activities, but also as an effective tool to help us better manage and improve our operations."

Hey, when you're the second highest-paid public official in the state (Willey makes $290,000 a year, not counting bonuses), you can afford to be cavalier.

Rafferty's efforts to clean up the PHEAA mess are commendable. But any reform at PHEAA will have to start with the departure of Willey and the replacement of everyone on the agency's board.

1 comment:

Carey said...

I agree with you that PHEAA's spending was out of control. But what I can't agree with is the blame that is being placed on the PHEAA employees. It was clearly stated in news articles across the state, by Representative Adolph, that the extravagent spending was done by the Board, not the PHEAA employees. It is unfair to drag the hard-working employees through the mud, when they were not responsible for this mess.

I agree it is time for some financial responsibility at PHEAA, but I do believe changes are being made. They are taking full responsibility for their actions, and working towards building Pennsylvania's trust once again.

PHEAA has done many great things for our Commonwealth. They offer free programs, like assisting parents and students with completing the FAFSA. Loan forgiveness programs for nurses and our military men and women.

And if we need to start asking questions about the State Grant program, how about Mr. Rendell's promise to give financial support for the State Grant Program? He broke a promise that will affect the program and the students, not PHEAA.

I do agree that our legislators need to take responsibility for their actions (spending) and start acting like true diplomats. And they must remember they are working for the people, not vise versa.