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ICA board chair resigns citing time demands

| Monday, Oct. 7, 2013, 2:15 p.m.
Dana Yealy, chairman of the Board of Intergovernmental Cooperation Authority, leads one of the two agencies that oversees Pittsburgh's financial situation. J.C. Schisler | Tribune-Review

A state agency responsible for helping Pittsburgh overcome its financial problems has fiscal problems of its own, according to its treasurer and city officials.

The Intergovernmental Cooperation Authority is spending more money than it receives each year from the state, according to board Treasurer Ann Dugan, who said Executive Director Henry Sciortino has not produced a monthly financial report since June 12. The city's Finance Department said the ICA last year bounced two checks totaling $10 million from state gambling proceeds.

The problems came to light on Monday during a meeting where the board announced chairman Dana Yealy had resigned, citing time constraints with his full-time job as a banking executive. Yealy, 54, of Marshall did not attend the meeting and could not be reached for comment. The mayor's office declined comment.

Dugan said the ICA's finances are in “disarray” and that the board was attempting to straighten them out. “We have no operating statements,” said Dugan, founder and assistant dean of the University of Pittsburgh's Institute for Entrepreneurial Excellence.

Sciortino and other board members deny any fiscal problems and say Dugan and city finance officials don't understand the ICA's budget. Cathy Qureshi, an assistant city finance director, said the ICA has been uncooperative.

“We've for years asked for financial statements and we have never gotten them,” she said.

Sciortino said he creates monthly financial reports, but they're on paper and not digitized as Dugan prefers.

He said the ICA's sole revenue source — the state Department of Community and Economic Development — is typically 15 months behind in turning over the ICA's annual appropriation. The ICA has offset that this year with about $300,000 left over from a $385,000 appropriation in 2012, he said.

“If we have money left over from a previous year, we're allowed to spend that,” Sciortino said.

He blamed the problem with the checks on someone at the state treasurer's office, which holds Pittsburgh's gambling money and wired $10,000 to the ICA's bank account instead of $10 million. The state corrected the problem the next day, and the city received its money within a week.

Calls to DCED and the Treasury Department were not returned.

The ICA is an independent body created by the Legislature in 2006 to help Pittsburgh overcome chronic financial problems. It is controlled by a five-member board appointed by legislative leaders and the governor. It must approve the city's annual budget and the spending of $10 million the city receives each year in gambling revenue.

Nick Varischetti, 29, of Brockway, a member of the board and an attorney at Burns White on the North Shore, will replace Yealy. He pledged transparency and accountability on the board.

“There should be monthly reports,” he said. “I look forward to working with Henry and other board members to make sure monthly reports are distributed in an appropriate fashion.”

Each year the DCED appropriates money for the ICA's expenses, budgeted at $520,000 for the 2012-13 fiscal year. But the appropriation totaled $385,000 for 2011-12 and $228,000 for 2012-13 and 2013-14 each.

Dugan noted that the $228,000 for 2012-13 is less than half the $520,000 budget. The board on Monday passed a resolution to request $550,000 from DCED for the next fiscal year so it can catch up, Sciortino said.

Dugan voted against the request, citing the absence of financial statements.

Matthew Simon, who chairs the ICA's budget committee, said Sciortino prepares monthly financial statements and distributes them to board members. But they've been on paper and not on financial accounting software, he said.

The board last month approved spending up to $3,800 on software and training for Sciortino to prepare digitized financial statements.

“It's a formatting difference,” said Simon. “I get the numbers. We all get the numbers, and we understood them.”

Bob Bauder is a staff writer for Trib Total Media. He can be reached at 412-765-2312 or bbauder@tribweb.com.

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