When Allegheny County Controller Mark Patrick Flaherty issued an audit this week citing a human services contractor for misusing more than $300,000, it continued a trend of providers improperly spending county funds over the past five years.

Despite the continuing problems, Mr. Flaherty said yesterday, the county refuses to give him money to create a better auditing system to oversee 402 outside agencies that receive hundreds of millions of dollars through the county. Instead, the county relies on certified annual audits the agencies provide, followed by spot checks by Mr. Flaherty's staff.

"The problem is that all this money is coming in, but there isn't additional money coming along with it to pay for the audit and make sure the programs are using their allocations according to the guidelines," said Mr. Flaherty.

About 30 percent to 40 percent of federal, state and county funding flowing into agencies that provide varied social services is either misused, misappropriated or sometimes stolen in fraudulent schemes, said Mr. Flaherty.

Marc Cherna, director of the Human Services Department, said the county requires annual certified audits of all contractors that receive more than $500,000.

The problem with certified audits, Mr. Flaherty said, is they are not a thorough analysis of how an agency may be spending its funds.

"All they are looking for in a certified audit is whether the agency has a checkbook and whether the money it's spending matches with the money it's getting," said Mr. Flaherty, adding that he has consistently requested funding from the county administration to create a dedicated auditing unit that would specifically audit outside agencies.

"I have been asking for this for a long time, but it just hasn't been a priority of the administration."

Kevin Evanto, a spokesman for Allegheny County Executive Dan Onorato, said the controller not only has the authority to audit any executive branch office, but also the funding.

The controller's budget has increased by about $2.3 million since 2004 to $6.3 million, Mr. Evanto said. He noted the county reimburses Mr. Flaherty for auditing county departments, so the controller could do more audits and submit the bills to the county, he said.

Mr. Flaherty's latest audit cited problems with Community Empowerment Association, a Homewood-based truancy-prevention program and a life-skills support or mentoring program for African-American youth.

He said the agency received $1.5 million from July 2007 to July 2008 and can't provide proper paperwork for more than $300,000.

The audit showed the agency billed the county for "$303,000 for unsupported service hours and operating expenditures" and spent $47,608 in checks, cash and credit card payments of "unsupportable and unallowable expenditures," among them a plane ticket to Seattle.

Mr. Flaherty has recommended that the agency repay Allegheny County more than $350,000, the amount of money he said the agency misused. Randolph Brockington, a deputy director of the Human Services department, said the county and the agency will soon craft a repayment plan.

When reached for comment this week, the agency's founder and executive director, longtime community activist T. Rashad Byrdsong declined to comment on the controller's audit.

Despite its accounting issues, Community Empowerment Association operates "a good program that meets its goals" Mr. Cherna said.

It is the latest in a string of agencies cited for misusing county funds.

The most prominent of such cases was a 2006 audit, which compelled the Department of Human Services to terminate its contract with Morningstar Personal Care Home Inc., which operated four small group homes in the Tarentum area.

In that audit, the controller found that Morningstar's bookkeeper had made 151 checks, totaling $138,855, payable to himself, with no indication the money supported operation of the group homes.

Furthermore, auditors said the owners of the group home used government funds for purchases that included a motorcycle and personal products such as perfume from the QVC home shopping channel.

In 2007, the department another contract with Cheswick-based Dugan's Residential Care Inc., which operated six group homes for individuals with mental disabilities after an audit revealed that the agency's owners and operators misused $823,545 of $2.8 million in overall spending through government contracts in a two-year period.

From July 2003 to June 2005, the audit showed that the owners of the group home, which had contracts with Allegheny and Butler Counties, had used $564,505 of operational funds to pay for numerous personal items.

In 2005, the former executive director of Training Toward Self Reliance, an organization that contracted with the county to provide care and treatment to individuals with development disabilities, contracted with his former agency and overcharged it $196,350 for services that were not provided. A controller's audit also recommended that the agency reimburse the county some $288,341 in "unsupported and ineligible expenditures."

A 2007 report showed that Macedonia Family and Community Enrichment Center -- a nonprofit arm of Macedonia Baptist Church, which works with the families of neglected and abused children-- not only owed $308,000 in delinquent taxes, but had racked up $48,709 in "unsupported expenses not related to the program."

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