The Port Authority of Allegheny County wasted $561,000 on a computer contract and misplaced nearly $900,000 in computer equipment, according to a state audit released Tuesday.

A performance audit of Port Authority records by state Auditor General Robert P. Casey Jr.'s office cited the problems in a 43-page report that faulted some of the agency's management decisions more than its accounting practices.

"It's not badly run," Casey said. "It's just there are some changes that need to be made."

Port Authority Chief Executive Officer Paul Skoutelas said the criticisms are exaggerated, even incorrect in places, and tell just one side of the story.

Casey says Port Authority lacked foresight when it chose to contract with Spear Technologies Inc., of California, for $4 million in December 2000 to install a computerized bus maintenance tracking system.

The computer system would track specifics about maintenance, including type of work, cost and names of mechanics.

In late 1998, with fears about Y2K looming, the authority hired Chief Technology Officer Maureen Bertocci and asked her to hire a staff familiar with computers and technology.

Just two months into the Spear Technologies contract, and after spending $311,000, the authority decided to cancel it and have its new technical staff do the work. The authority paid a $250,000 penalty for terminating the agreement.

Casey said the bad management decision wasted $561,000. The authority should have had the foresight to recognize its internal staff was capable of performing the work, he said.

"There's no question the half a million dollars could have been saved if they had begun the process with a focus on developing it with the in-house expertise," Casey said. "I think that was done very poorly."

Skoutelas says the authority saved about $1 million, even after factoring internal costs and the purchase of computer hardware.

"The staff came to me and said, 'For what we're going to spend ... we can do it in-house now with the capabilities we have, and we can do it for less money,' " Skoutelas said. "We saved a lot of money."

The audit also says the authority could not locate 466 pieces of computer equipment purchased for more than $875,000, saying management was unable to explain what happened to them for 10 months.

Skoutelas called the claim inaccurate, saying the authority had not yet completed an inventory that would have specified where the equipment was located. The audit was completed on Sept. 20 and the authority's inventory was done later that fall, he said.

"We were not complete with our review," Skoutelas said. "They seized upon that and said, 'Oh, you can't find these items.' "

The computer equipment in question is hardware and software that Skoutelas says is 15 years old -- some of it even older. The $875,000 value cited by Casey is the price of the equipment when the authority bought it 15 years ago, Skoutelas said.

The real value, considering depreciation, is about $1,700, he said.

However, Casey's office said Port Authority officials could not find the equipment for 10 months after auditors raised red flags.

"They should be able to fulfill that kind of request immediately if they have an inventory system in place," Casey said. "The idea that you can't locate the equipment is outrageous. A public agency should be able to locate them at any time. I think that's pretty basic."

Pittsburghlive

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