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Audit shows Allegheny County Public Works delinquent in paying contractors

| Thursday, May 23, 2013, 2:24 p.m.

Allegheny County's Department of Public Works paid contractors as much as a year late in some instances, partly because it failed to seek state and federal reimbursements to which it was entitled, an audit found.

“We are still getting requests from contractors who have not been paid. We have 15 to 20 contractors regularly call our office,” said county Controller Chelsa Wagner, whose office conducted the audit released Thursday.

Wagner said many calls come from small businesses experiencing financial problems because of late payments. If they cannot rely on timely payments, she said, “then in many cases they are effectively shut out from doing business with the county.”

This year, Public Works has a capital budget of about $84 million and an operating budget of about $19 million.

County officials did not dispute the results of the audit, covering January 2009 through December 2011, but said it largely fixed the problem of paying contractors on time.

Public Works Director Steven Johnson, on the job since March, said late payments resulted from funding problems and delayed payments from PennDOT.

“These have been timing issues only. (The department) has never defaulted on any of its contractual obligations and has no intention of ever doing so,” Johnson said in a letter to Wagner.

Many problems the report identified were corrected late last year, when the county issued bonds for the 2012 and 2013 capital programs and improved its process of obtaining money owed from PennDOT, Johnson said.

One contractor, owed $1.5 million when Johnson arrived, now is owed $395,000, according to county officials.

“We believe that many of the issues in the audit have been resolved. The audit confirmed what the county executive told me about the situation when I was hired,” Johnson said.

Wagner did not agree, insisting, “I still have frequent and regular requests to help expedite payment.” The department requested only 54 percent of the reimbursement PennDOT owed it, she said.

She did not know the total amount Public Works owes contractors, saying, “That information is not available to us.”

The administration said it couldn't immediately provide that amount.

Wagner did not identify contractors who have experienced problems with the department, but mentioned one company with annual revenue of $6 million that was owed $1 million from the county for more than a year.

A sampling of the Public Works Department's invoices revealed that 66 percent of payments to contractors were not made on time and 16 percent were more than six months late.

Rick Wills is a Trib Total Media staff writer. Reach him at 412-320-7944 or rwills@tribweb.com.

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