ShareThis Page

Auditors find $42K in undocumented expenses in Pittsburgh Great Race account

Bob Bauder
| Friday, Nov. 10, 2017, 4:06 p.m.
Runners come into the home stretch of the 40th annual Pittsburgh Great Race on Sunday, September 24, 2017 at Point State Park.
Jack Fordyce | Tribune-Review
Runners come into the home stretch of the 40th annual Pittsburgh Great Race on Sunday, September 24, 2017 at Point State Park.

A nonprofit that used a private bank account to collect Richard S. Caliguiri City of Pittsburgh Great Race registration fees and donations spent money with virtually no city oversight, according to an audit by City Controller Michael Lamb's office.

Auditors reviewed account activity from January 2012 through April and found no evidence of wrongdoing or misappropriation by City Source Associates of the South Side, but noted the nonprofit failed to keep adequate records.

City Source Executive Director Bill Harlak could not be reached Friday for comment, but noted in a written response attached to the audit that the account has always passed an annual review by private auditors. “We had no irregularities in our account and have always provided information necessary to rectify any questions or comments by the race director,” Harlak wrote.

Auditors noted the nonprofit mixed funds from various sources in the Great Race account and spent $103,371 on items unrelated to the Great Race. Harlak said the transactions should have been omitted because the money came from private sources.

The audit also reported 33 undocumented transactions totaling $42,482, including $15,761 spent to purchase gift cards.

Harlak wrote that the company could have supplied documentation if given more time to sort through bank statements, deposit slips and canceled checks.

He said six city auditors visited his small office and there wasn't room to sort through years of paperwork.

“There was not enough room to have six people going through records, and we could not get in the conference area to find documents the auditors needed,” he wrote.

In a summary of his auditors' findings, Lamb wrote, “Operating practices were inadequate, thereby increasing the risk of misappropriate and/or fraud to occur and not be detected.”

Mayor Bill Peduto in May ordered the Office of Municipal Investigations to look into spending from two accounts associated with the Great Race, including the City Source account and a city trust fund, after an unidentified city employee reported possible problems.

Money in the two accounts comes from race sponsors, registration fees, private donations and merchandise sales.

City auditors reviewed deposits totaling about $1.8 million and expenditures totaling about $1.5 million from January 2012 through April 2017. City Source made expenditures after receiving authorization in a memo from the Parks Department, but appeared to operate with no other oversight from the department, according to the audit.

Parks Director Jim Griffin declined to comment.

The Pittsburgh Parks and Recreation Department managed the Great Race until this year when Pittsburgh turned it over to the Pittsburgh Marathon. Peduto's office said the private Great Race account was closed in April.

Invoices obtained by the Tribune-Review indicated the parks department spent $343,326 from the trust fund in 2016 and at least 40 percent went for expenses other than the Great Race. Unrelated expenses included a clown for park events, repairs to a city swimming pool and rental of a stump grinder for Frick Park.

City Source is primarily a property maintenance contractor for Pittsburgh and the Pittsburgh Urban Redevelopment Authority, but also acted at the request of the city as a pass-through for Great Race funds. The company provides the same service for Pittsburgh recreation and senior center activity accounts funded exclusively by participants.

Bob Bauder is a tribune-Review staff writer. Reach him at 412-765-2312, or via Twitter @bobbauder.

TribLIVE commenting policy

You are solely responsible for your comments and by using you agree to our Terms of Service.

We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.

While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.

We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers

We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.

We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.

We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.

We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.