Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Following the Money Audit for First Time Will Examine If Towns Are Spending Shale Impact Fees Properly

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Following the Money Audit for First Time Will Examine If Towns Are Spending Shale Impact Fees Properly

Article excerpt

Impact fees from Pennsylvania's shale gas wells are distributed town by town in sums that range from a few bucks to hundreds of thousands to be saved up or spent on projects like fixing roads or improving public parks.

It is a relatively new system that relies on the accounting and record-keeping expertise of often small local governments to make sure the money is spent in the ways the law allows. It is overseen by an agency that specializes in public utilities, not government spending.

It is, in other words, a tantalizing target for an auditor.

Which is why Auditor General Eugene DePasquale announced last week the start of a long-expected performance audit of the way impact fees are calculated, collected, disbursed and spent.

Nearly $856 million in impact fees have been assessed on wells tapping the Marcellus and other deep shale layers over four years. The largest share of the revenue is distributed to the wells' host communities to offset stresses on roads, services and landscapes.

The audit has three goals, Mr. DePasquale said: to look at what is being bought with the money, to make sure the spending complies with the law and to assess the state Public Utility Commission's procedures for calculating and distributing the fees and for processing the local governments' spending reports.

"I'd always said from the beginning that it was important, that at some point I would take a look at it to make sure the money is going to where it is supposed to go," Mr. DePasquale said.

He moved the audit closer to the top of his office's priority list after news reports started tallying the portion of impact fees - $33 million over three years - that the PUC characterizes as "not reported" by municipalities in their spending statements.

Nils Hagen-Frederiksen, a spokesman for the PUC, said the agency would have categorized spending as unreported if the statements were missing or contained errors. …

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