The state Auditor General’s office will look over two years of activities conducted by the Erie County Gaming Revenue Authority as part of a performance audit.
In a letter Wednesday to ECGRA leadership, Auditor General Tim DeFoor stated the audit will cover the period from April 1, 2022, through March 31.
The audit, DeFoor stated, will seek to determine whether ECGRA complied with gaming legislation and whether expenditures of gaming funds were properly disclosed to the public.
ECGRA, which was founded in 2008, serves as a driver of economic development in Erie County, awarding grants funded by gaming revenue dollars to small businesses, nonprofits and municipalities throughout the year.
While ECGRA undergoes an annual audit by independent accounting firm Maher Duessel, this will be the first time ECGRA is audited by the state.
“We’re looking forward to working with the auditor general in resolving any questions that may be lingering,” ECGRA Solicitor Tim Wachter said. “ECGRA is not concerned about the audit in any way. We have one of the most transparent operations in all of Erie County government.”
What will be audited?
The audit outlines two objectives.
The first is to determine whether ECGRA complied with the law, namely:
The second objective is to determine whether expenditures of ECGRA’s local share funds were disclosed on its website and that funds didn’t go toward tuition or educational expenses of an ECGRA employee.
DeFoor indicated that objectives might be added and the scope of the audit adjusted.
Why is ECGRA being audited?
The state audit was requested by state Sen. Dan Laughlin, Erie County Executive Brenton Davis and a slate of state lawmakers.
In a Feb. 1 letter to ECGRA, the group stated they were compelled to request the audit because of “collective concern regarding information we have received” about ECGRA’s financial practices.
The letter didn’t specify what “information” was received. However, it cited an example of how “reports of the uses of (gaming) funds” were not being reported on the ECGRA website or any public forum as required by state gaming laws.
Wachter informed the ECGRA board in a Feb. 6 memo that Laughlin had contacted his office about the matter and that ECGRA addressed the issue within a day.
The letter, which was sent by Laughlin’s office, was signed by Davis, along with Republican state Sen. Scott Hutchinson; Democratic state Reps. Pat Harkins and Bob Merski; and Republican state Reps. Jake Banta and Brad Roae.
DeFoor's audit comes after months of criticism from Davis of ECGRA.
Earlier this year, Davis took aim at ECGRA for its operating costs and executive director’s salary; rebuked it in the news media as a “slush fund of walking-around money;” and floated the idea of dissolving the ECGRA board altogether, placing all gaming revenue funding decisions squarely in the hands of county government.
He requested an exhaustive list of financial information from the authority and, along with Laughlin, requested the authority board to refrain from any long-term obligations, such as renewing ECGRA Executive Director Perry Wood's contract, until the state audit was done.
ECGRA leaders accused Davis of interfering in the affairs of an independent authority and making accusations against ECGRA with no evidence. ECGRA chose not to refrain from any business, including the renewal of Wood’s contract. The authority has also bolstered its financial disclosures online.
On Friday, Erie County Public Information Officer Chris Carroll stated the county executive didn’t want to comment on DeFoor’s audit until the audit was complete.
When is the audit?
The Auditor General’s Office and ECGRA are expected to hold an entrance conference before Aug. 7.
An entrance conference is an opportunity for the auditor and client to meet and discuss audit objectives, schedules and instructions in greater detail.
Wood will be the audit liaison for ECGRA and, along with Wachter, will be communicating with DeFoor’s office.
A.J. Rao can be reached at arao@gannett.com. Follow him on X @ETNRao.
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