Audit shows U. overcharges Philadelphia

The University did not provide services the city paid for and overcharged the city in two situations, according to a city audit released in December. A Department of Human Services annual audit for the 1990-91 fiscal year said the city paid the University $90,000 to provide 144 training opportunies for supervisors and senior managers in DHS, but the University only provided 75 opportunities. In addition, the audit, done by the City Controller's office, said the University "erroneously" billed DHS $18,000 twice in June 1990 and overbilled DHS $2000 for fringe benefits. University Comptroller Alfred Beers said it was premature to comment on the audit. Currently, the Comptroller's officer is checking its records to see whether the allegations of double-billing and over-billing for fringe benefits are correct or not, he added. According to City Controller Jonathan Saidel, part of the blame for the situation lies with the city because it did not keep checks on the program. "It is the city's responsibility to see if it [the program] is cost effective," Saidel said. "It is not as much a criticism of Penn as a criticism of the system." The University and DHS made changes in the original contract, said Burton Cohen, director of the School of Social Work, with the school providing the training. The University did provide all the training opportunities upon which it had agreed, he added. "The changes were mutually agreed upon," Cohen said. "From my standpoint, we did provide all training hours spelled out in the contract. The city did not get short-changed." Cohen also said the city had not expressed any dissatisfaction with the program before the audit. Saidel also said the University's double-billing was probably a mistake and admitted the city's financial operations are disorganized. "I don't think it was anything criminal," Saidel said. "Their [the University's] system is large enough to make a mistake, and our system is not accurate enough to investigate." DHS did not realize the University had billed it twice and approved the $18,000 payment, submitting its approval to DHS's fiscal unit. The fiscal unit rejected the payment because only $3000 remained for the program but still resubmitted it for processing. The city awarded the contract to the University without putting it out for bidding. The audit suggests DHS should use competitive bidding in the future to find the lowest cost for training. "We are asking DHS to change its procedures and get control," Saidel said. "The University has to be aggressive." According to Frank Voigt, the head the watchdog group Committee of 70, contracts such as the training program are usually not bid on by competitors. Saidel said when DHS began expanding four or five years ago, it enlarged its use of the University and other schools in the city. "We set a lot of contracts with larger non-profit organizations," he said. "It is better to use the school than a profit organiztion that does not care about the city."

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