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Financial overseer says Peduto late on Pittsburgh's payroll management system

| Tuesday, June 3, 2014, 11:57 p.m.

Pittsburgh must fix its internal accounting systems before it can think about implementing a five-year financial plan that includes a tax hike and new borrowing, the city's second set of fiscal overseers said on Tuesday.

The Intergovernmental Cooperation Authority released a letter to Mayor Bill Peduto and City Council saying the city should cut expenses by 20 percent and install electronic systems to track payroll, assets and expenses before the plan is adopted.

The Peduto administration promised to have the payroll system in place by April, the letter notes.

“We think it's prudent to make sure we have the proper financial management systems in place before we go out and raise revenues off of taxpayers' backs,” ICA Chairman Nicholas D. Varischetti said. “From our perspective, why in good conscience go to the taxpayers and raise taxes when we know first-hand that the system in place is flawed and wastes money.”

Peduto, who is attending a leadership conference in Denver, responded that his administration is working on the financial systems. He also questioned the 20 percent cut.

“Until we have the systems in place to thoughtfully and deliberately analyze the performance of our departments, programs and services, indiscriminately slashing our operating budget by 20 percent would be irresponsible and would likely result in a less effective, less responsive city government,” Peduto wrote.

State officials appointed the ICA and Act 47 teams to help Pittsburgh resolve financial problems after classifying the city distressed in 2004.

Act 47 coordinators last week released a plan designed to earn the city's release from oversight in five years.

The ICA board urged the city for years to purchase computer systems for tracing finances and allocated gambling funds to pay the costs.

Pittsburgh in 2010 implemented a general ledger system for paying bills and performing basic accounting functions at a cost of about $4 million.

The city was scheduled to go live with an in-house electronic system for computing employee payroll in 2013, but there were multiple delays. Peduto has said the system did not work and cited nearly $1 million in cost overruns.

Peduto said in his response to the ICA that the administration is hiring a consultant to get the work back on track.

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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