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Written records invite skimming, says accountant reviewing Pittsburgh finances

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Thursday, June 20, 2013, 12:01 a.m.

Pittsburgh still uses pencil and paper to record some cash transactions, according to a financial accountant who is examining the city's books.

William G. Krieger, managing director for Downtown-based Gleason & Associates, on Wednesday said staff uncovered potential for skimming money and, in one case, an off-the-books bank account used to pay baseball umpires.

“This was very small dollars and very low risk in terms of the city,” Krieger said of the unauthorized checking account used for a Citiparks program. “While there are opportunities for cash-skimming, we have not observed any situations where there was fraud or cash-skimming.”

Gleason was retained by Pittsburgh's Intergovernmental Cooperation Authority, one of the city's two state-appointed financial oversight boards, to review cash-management policies along with the Controller's Office. The ICA called for the review after the FBI charged former police Chief Nate Harper in February with skimming city money through an unauthorized account.

The ICA, which has the authority to approve city budgets, met to resolvedifferences with Mayor Luke Ravenstahl's administration over issues including implementation of a financial management system that was supposed to be in place last year. The ICA threatened sanctions, including revoking approval of the city budget and withholding state aid.

Chuck Half, innovation and performance manager for the city, said it is seeking bids for software and should have the system completely online by 2014.

ICA Chairman Dana Yealy said he was satisfied with the response.

“The change in the attitude and behavior, it was embracing the need to work cooperatively,” he said after the meeting. “What you heard today were people continuing to make a commitment to work together.”

Krieger described a hodgepodge accounting system more suitable for the Dark Ages.

He noted that in some cases, the same person receiving cash also records the transaction and deposits the money. He said the review also uncovered instances where deposits are being made only once per year and cash registers are not used regularly.

“With certain departments, this is not inconsistent of what we would see in any organization,” he said.

Controller Michael Lamb said his office has advocated for a standard cash management policy and found similar problems during audits. He said much of what the review uncovered centered on volunteers handling small amounts of money at senior centers and recreation centers.

“We still want to be sure that it's properly accounted for,” he said.

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

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