Title: ECGRA Invests Nearly $1 Million in Erie, PA: Audit Confirms Compliance and Funding Entitlements

Early child care centers: ECGRA invests nearly $1 million in Erie PA

Kenya Johnson, owner of Learning Ladder Early Child Care, and Asha Graeb, director of the St. Martin Early Learning Center, talk about the impact of the Early Childhood Educator Retention Awards. A state audit found that ECGRA complied with relevant laws and is owed $538,428 in gaming funds. The audit, requested by local and state officials, examined ECGRA’s grant administration, public disclosures, spending, and receipt of county gaming funds. The audit recommends ECGRA and the county reconcile funds annually.

The Erie County Gaming Revenue Authority has complied with the law. That was the verdict of the state Auditor General’s office, which on May 30, released a performance audit of two years of ECGRA’s activities, including the administering of grants and loans, public disclosure, and spending requirements. The audit, which was requested by state Sen. Dan Laughlin, Erie County Executive Brenton Davis, and a slate of state lawmakers in early 2024, came after Davis raised concerns about ECGRA’s finances and adherence to state laws.

The audit discovered that ECGRA was not only in compliance but entitled to gaming funds from the county. “We found that due to an informal, unwritten agreement between ECGRA and Erie County related to quarterly fund distributions, ECGRA did not receive $538,428 of the gaming funds it was entitled to for the period of April 1, 2021, through March 31, 2024,” the audit read. The audit stated that a year-end reconciliation was never conducted to ensure the funds were properly distributed.

ECGRA Board Chairperson Kelly Hess noted in an April 29 letter to state Auditor General Tim DeFoor that ECGRA requested a reconciliation of the 2023 funding in January 2024 and followed up in June 2024 but did not get a response from the county. The auditor general’s office encouraged both parties to work collaboratively to conduct fiscal year-end reconciliations to ensure funds are distributed according to the law and any differences are settled. The office also made a recommendation encouraging ECGRA and Erie County to formalize any agreement on how funds are distributed, reconciled, and settled to avoid any issues in the future.

A ‘powerful validation’

Hess called the audit a "powerful validation of ECGRA" in light of repeated attacks from the Davis administration. "The auditor general’s findings show not only that ECGRA has complied with the law but that our process, rooted in transparency and excellence, goes beyond the letter of the law," she said in a May 30 statement. "The manner in which ECGRA—a public authority with a clear mission and unwavering commitment to transparency—has been treated is not appropriate."

She added, “Under the leadership of (Executive Director) Perry Wood, ECGRA has done phenomenal work to advance the economic and community development goals of Erie County. Now that the ECGRA model and process have been affirmed by the auditor general—the state’s chief fiscal watchdog responsible for using audits to ensure that taxpayer dollars are spent legally and properly—we hope that these relentless and baseless attacks will end.”

Davis has frequently taken aim at ECGRA, criticizing its operating costs and rebuking it in the news media as a “slush fund of walking-around money." He’s even floated the idea of dissolving the ECGRA board altogether, placing all gaming revenue funding decisions squarely in the hands of county government.

Following the May 30 audit, Wood said ECGRA’s work has been validated and that he hopes the executive’s "long-sustained attack against ECGRA will finally come to an end." “What began as a baseless fishing expedition to discredit ECGRA is now validation that ECGRA works," Wood said in a statement. “ECGRA is something that Erie County should be proud of and we appreciate the support of local officials who refused to engage in a public smear campaign and stood up for our team’s integrity. ECGRA and its dedicated staff will continue to go to work each day on behalf of Erie County and deliver—just as we have through the last four administrations.”

What was audited?

The audit had three objectives. The first was to determine whether ECGRA complied with the law. The second objective was 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. The third objective was to determine if ECGRA received gaming revenue from the county in accordance with the relevant laws. The audit period for the first two objectives was April 1, 2022, through March 31, 2024. The period for the third objective was April 1, 2021, through March 31, 2024.

Some findings

Among its findings, the audit showed that ECGRA approved and denied grant applications in accordance with relevant laws, regulations, and internal policies; monitored grant projects to ensure funds were spent according to grant guidelines, with one exception related to closeout documentation, which the audit referred to as an "isolated mistake;" adhered to the terms of the 2010 settlement agreement; and distributed loan funding to qualified organizations according to applicable laws and monitored loan money for compliance with the original loan agreements.