- Associated Press - Thursday, March 16, 2017

HARRISBURG, Pa. (AP) - A nonprofit agency with a state contract to help fund counseling of pregnant women about abortion alternatives has challenged Pennsylvania’s right to audit money it receives from vendors.

Real Alternatives, a Harrisburg-based agency that is nearing the end of a five-year, $30 million state contract, wants a state court to prevent Auditor General Eugene DePasquale from examining the money.

DePasquale, an elected Democrat who supports abortion rights, said Thursday he wants more information about the use of the payments, which amount to 3 percent of the state money the contractors receive through Real Alternatives, or nearly $1 million over the past five years.

Real Alternatives says it has helped about 270,000 Pennsylvania women over the past two decades. It also operates in Michigan and Indiana and has helped start abortion alternatives programs in 11 other states.

Its lawyer, Matt Haverstick, said DePasquale is improperly trying to audit private business records.

“This whole dispute is about at what point money that starts with the commonwealth becomes private citizens’ money,” Haverstick said. “The business community ought to be horrified that the auditor general seems to believe that if money starts out as commonwealth money, it remains commonwealth money for all time.”

DePasquale called that “a preposterous argument” and said his “big beef” was that the state does not know precisely how the 3 percent is spent. Real Alternatives describes it as “offset payments” and as a “program development and advancement fee.”

“The fact that they’re willing to file a lawsuit to cover over what they’re doing with it - that raises more questions than it answers,” DePasquale said.

The lawsuit says Real Alternatives has been state-funded since at least 1996. Its network of vendors includes social services agencies, pregnancy support centers, maternity homes and adoption agencies. The 3 percent, the lawsuit said, helps Real Alternatives develop and expand its programs.

The Department of Human Services, which provided the grant to Real Alternatives, began asking about the 3 percent payments during an audit that started in late 2015.

In April, the department’s Bureau of Financial Operations raised questions about the fee’s propriety, noting Real Alternatives asserted it had been approved but could not document that claim.

The company told state officials the money was used for expenses not covered by the state grant, including travel and other costs to advance the program in other states, according to the bureau.

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