Even though only a small amount of misappropriated funds was
discovered in an investigation of this region’s counter-terrorism
task force, the state auditor general expressed concerns that the
findings could be “indicative of systemic problems.”

Not only did the auditor general find possible systemic problems
with the regional task force that includes Elk and McKean counties,
but he suggests that lack of local and state oversight could have
allowed allow members of the task force to take advantage of funds
provided to them through the federal government.

The March report also points to an apparent conflict between the
auditor general and the Pennsylvania Emergency Management Agency in
how the program has been managed.

PEMA is responsible for reimbursing the nine regional
counter-terrorism task forces across the Commonwealth. Those task
forces are reimbursed with Homeland Security federal grant funds to
ensure they are prepared in case of emergency or terrorist
attacks.

The findings in the audit report arose when Elk County auditors
brought a completed 2004 audit on the Northwest Central
Pennsylvania Emergency Response Group to the auditor general’s
attention. Following an investigation, Auditor General Jack Wagner
found the program administrator “benefited financially when he
failed to make proper disposition of $2,250 in NCPERG funds.”

The Elk County Auditors had also suggested possible abuse of
funds could occur due to lack of oversight by the county
commissioners as the county is the host county to the
counter-terrorism task force.

Elk County had been acting as the host county since 1999 until
December of 2005 for the funds for the six-county task force, which
includes Elk, McKean, Cameron, Clarion, Jefferson and Clearfield
counties.

By acting as host, Elk County would reimburse the task force
members and, in turn, request reimbursement from PEMA, who buys
specialized emergency response equipment and provides grant funds
to the local task forces for counter-terrorism training.

At issue in the investigation were several missing receipts or
improper receipts provided to the county for reimbursement of task
force related items such as training, office rental or expenses.
Several reimbursements to members of the task force were
highlighted and questioned by the county auditors while they
conducted their audit.

What remained after the auditor general began his investigation
was the $2,250 amount submitted by Gregory Butterfuss, the program
administrator of DuBois. That amount is the total amount of a $500
insurance reimbursement and a monthly office rent amount of
$1,750.

PEMA, in response to the state auditor’s report, said in a press
release that they did find some problems with the NCPERG but took
“corrective action where necessary.”

In the auditor general’s report, it is also stated that they
only investigated $69,000 in expenditures of the task force and not
training because “they were not privy to the needs assessment” or
equipment purchases, which PEMA conducts itself.

When asked what type of oversight they provide to the task
force, Maria Smith, press secretary for PEMA and the Office of
Homeland Security, said they have a representative attend the
monthly meetings of the regional task force to provide direction
and require the task force to send them two interim reports and one
final report.

These reports are the same ones the auditor general mentioned in
his report that were not being produced previously by the task
force administrator. They include reports showing how grant funds
were being spent and the status of the terrorism prevention
program.

As for oversight on the funds used by the task force, chief
counsel for PEMA, Jose Morales, said recently, “PEMA wouldn’t have
the capacity to oversee (each individual item) where they go. There
are 150 employees at PEMA.”

The Elk County Commissioners say clerical errors caused the
appearance of misappropriated funds. PEMA said the funds were
either paid back by the program administrator, or previously issued
checks returned to them.

“All of the money has been recouped,” said Morales, reminding a
reporter that this was an investigation by the auditor general and
not an actual audit.

According to Ivan Anderson, communications specialist for the
auditor general, the organization can conduct either audits or
investigations and explained that an audit is conducted as a
“routine matter,” and an investigation is performed “when there are
allegations of fraud, waste or abuse of tax dollars.”

Anderson also said this was the first task force to be
investigated by their department in the state.

“The monies provided to PEMA to fund these task forces falls
within our jurisdiction and may be subject to future audits,”
stated Ivan in a faxed response to questions posed by a reporter.
“There are no plans at this time to conduct an audit of NCPERG or
other such entities.”

The report was also distributed to members of the emergency
preparedness committee, the appropriations committee, state
treasurer, governor and state Attorney General Tom Corbett.

Following the auditor general’s findings in the investigative
report, there is a response from PEMA Director James R. Joseph.

“PEMA makes clear that Homeland Security grants awarded to
NCPERG total $3,305,054. Although PEMA does not condone improper
expenditure of federal or state funds, the total amount of improper
funds expenditures uncovered by the Special Investigation pale in
comparison to the amount of money the task force is managing with
the assistance of Elk County. Moreover, the host county did their
job by auditing the NCPERG which discovered the aforementioned
practices,” said the comments.

Also in the auditor general’s report, statements by the director
of PEMA and the auditor general reveal some problems in
communication between the two during the investigation.

PEMA writes in response to the report, “Lastly, it should be
noted … that all parties involved have fully cooperated with the
Special Investigation.”

The auditor general responds in the end, “We must disagree with
PEMA’s statement that ‘all parties involved have fully cooperated
with the Special Investigation.’ Although cooperation was
forthcoming in the early stages of the investigation, it ceased
when we began asking for documents relating to the lease for office
space … From that point forward, telephone calls were not returned,
requests for documents went unanswered, and all communication –
with any party – had to be funneled through PEMA.

“In fact, the former chairman of NCPERG (believed to be William
Swathworth at the time) told the Office of Special Investigation
that NCPERG was instructed not to cooperate with this office,” said
the statement of response.

“When asked who told NCPERG not to cooperate, he replied,
‘PEMA.’ We were forced to negotiate with PEMA in order to obtain
necessary documents and information, which caused considerable
delays in conducting and completing this investigation,” added the
report.

The report can be found online at the state auditor general’s
Web site.