Youngstown’s use of $305K ‘unallowable,’ state audit finds

Published: Thu, December 20, 2012 @ 12:07 a.m.

By David Skolnick


A long-delayed state audit of its 2010 finances found the city paid $305,568 from a federal grant to a company that failed to include required documentation, making that payment “unallowable.”

The audit, released today, questioned that expenditure from a federal Energy Efficiency Block Grant. The audit and its concerns have been forwarded to the U.S. Depart-ment of Energy, which oversees that program, for follow-up.

The audit states invoices from that company didn’t include “certified payroll records for work completed. Therefore, all payments made from” this grant are “considered unallowable.”

City Finance Director David Bozanich said, “We’re working to resolve that issue. The contractor did work but didn’t provide payroll records.”

Sean McKinney, the city’s buildings and grounds commissioner, said officials with the company, Valley Electrical Consolidated of Girard, will meet with him today to resolve the issue.

The company, he said, didn’t provide payroll records for two of its managers, and is expected to do so today.

Valley Electrical was the general contractor for a project at the city-owned 20 Federal Place office building to turn the fifth floor into usable space for an expansion of VXI Global Solutions, a call-center business, McKinney said.

This issue didn’t rise to the level of a finding for recovery of money.

The Department of Energy reviewed the grant and found the city in compliance, Bozanich said.

For the fourth-consecutive year, the state audit of the city doesn’t include a finding for recovery.

But including the federal-grant issue, the audit listed a total of seven noncompliance citations and 17 recommendations.

Many of the noncompliance citations and recommendations — including seven related to information-technology shortcomings — have appeared in annual audits going back 10 to 15 years.

“We’re continuing to make progress in terms of improvements,” Bozanich said.

The 2009 audit had four noncompliance citations and 20 recommendations.

The state audit was finished about eight to 10 months later than usual.

Ohio Auditor Dave Yost recently said that a “series of problems in city hall getting their financial information together” caused the delay.

Bozanich agreed with Yost that part of the delay was caused by the city changing its computer financial-management system.

Yost also had said the city took “a long time” to provide his office with needed information about federal money it received and spent in 2010.

Issues with that money were largely connected to one-shot federal stimulus-package funding, which already has been spent, Bozanich said.

The audit states the city failed to create a separate account for its stimulus funding, but doesn’t contend anything illegal occurred.

Other issues in the audit included ending 2010 with deficits in 20 funds, up from 16 in 2009.

“There’s almost no way to balance because of our calendar; the state fiscal year and the federal fiscal year aren’t the same,” Bozanich said. “At given times, there will be surpluses or negatives in those funds.”

The audit states the city overcharged residents for garbage pickup in 2010 by more than $1.2 million and used that extra money to subsidize the general fund.

Also, the audit states the city sold a fire station for $1 million and instead of putting it into a capital projects or bond-retirement fund, where it belongs, it went into the general fund.

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