Allegheny missing $8.3 mil.

The Associated Press ''We think [the missing money] went into operating funds,'' Attorney General Mike Fisher told The Inquirer during an interview. ''That doesn't sound like good news to me. ''It's just the tip of the iceberg,'' he added. Fisher said his office has received two-year summary statements from Allegheny on at least 23 funds that are thought to have been raided to pay bills as Allegheny descended toward a July 21 bankruptcy filing. His office has identified at least 550 restricted funds connected with Allegheny hospitals and professional schools. Fisher said he expects to have financial summaries on 80 percent of these accounts by the end of next week. It was not clear how much money was taken, who authorized it, or where the money went. According to the newspaper, Allegheny's internal accountants have identified at least $17 million in interest income that was taken, and Allegheny officials have admitted taking about $8 million from various funds belonging to the Graduate Hospital. Paul Neuwirth, who heads an Allegheny committee looking into missing endowed money, declined comment Tuesday. Fisher said he has few answers on the missing funds and complained that his staff needs more people to adequately investigate the money. The office which oversees nonprofit organizations has only nine lawyers statewide covering more than 50,000 charities. Fisher asked the legislature in February for $712,000 to pay for five more lawyers, one investigator, and one secretary in the charities section. He did not get them. In making the requests, Fisher cited statistics showing that there were eight hospital mergers in 1997 alone, up from zero just one decade earlier. "We do not have he manpower to do the kind of scrutiny on hospitals now," Fisher told the paper. The announcement about the missing money caps off an eventful few weeks for the bankrupt system, which owned eight area hospitals, as well as the Allegheny University of the Health Sciences. California-based Tenet Healthcare Corp. proposed to buy the facilities for $345 million, with control of the medical school going to a third-party institution created for that purpose and managed by Drexel University. Last week, Drexel trustees rejected Allegheny's first invitation to manage the school, threatening the proposed takeover, but the same board unanimously approved a revised deal Monday which they hope will ultimately lead to a merger of the school with Drexel. Drexel President Constantine Papadakis called the deal "a marriage made in heaven." Under the deal, Tenet will bear full financial responsibility for the school. Additionally, Tenet sweetened the package by promising $50 million for Drexel's endowment. Papadakis has said the money would provide "more cushion" to make up for Drexel's lost opportunities during the time it would be managing the school. Officials explained that the takeover would be a major drain on Drexel's ability to raise money for its endowment. Drexel will receive a management fee and expenses for running the school, which has 3,100 students. Drexel officials hope to merge the two institutions within 2 1/2 years.