More Questions Arise Regarding Program that Won’t Die

October 25, 2011

Investigative Reports

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By KEVIN DIETRICH

IT’S NOT SUPPOSED TO EXIST . . . BUT IT DOES

After more than two years and into a second administration, the S.C. Lieutenant Governor’s Office still has not revealed to The Nerve any statutory evidence authorizing the specific use of tax dollars for a little-known competitive grants program that has spent more than $12 million over the past 11 years.

The Senior Center Permanent Improvement Program was created more than 20 years ago to finance upgrades to more than six dozen senior centers throughout South Carolina, but more than a decade after the original program was repealed on the books, the program is still siphoning tax dollars.

While the lieutenant governor’s office did respond to some email inquiries from The Nerve about the program, the responses resulted in more questions than answers.

For example, the program was allocated $3 million for fiscal year 2010-11, according to spokeswoman Julia Foster. “Payment for approved projects and expenditures (was) covered by (state budget) Proviso 89.87,” according to Foster.

Not only does that represent a substantial increase from years past, but Proviso 89.87 for 2010-11 shows that it applies to several different programs, only one of which is under the lieutenant governor’s office. It reads “Home and Community Based Services (Meals on Wheels).”

It is not only unclear how Meals on Wheels, a program that delivers food to home-bound individuals unable to purchase or prepare their own meals, is connected to the Senior Center Permanent Improvement Program, but there is no amount specified in the proviso.

Provisos are specially crafted legislative edicts assigned a number and written into the annual state budget. They expire after one year unless renewed.

In this year’s budget, a proviso was approved that says, “Unexpended funds from appropriations to the Lieutenant Governor’s Office on Aging for Home and Community Based Services shall be carried forward from the prior fiscal year and used for the same purpose.”

That would appear to indicate that whatever money was budgeted and was not spent from the prior year can be carried forward for the same program the following year.

However, rather than simply carrying over unexpended funds – even if they weren’t specifically designated for the senior center program – another $3 million was budgeted for the program for this fiscal year, which started July 1.

That would appear to contravene state law.

Foster declined to respond to numerous phone calls and follow-up emails from The Nerve seeking explanations of how a proviso designating an unspecified amount of funds toward the Meals on Wheels program resulted in $3 million going into the senior center program, up from $1,075,625 – an increase of nearly 180 percent – between fiscal years 2009-10 and 2010-11.

In addition, the Lieutenant Governor’s Office is requesting another $3 million for the program for fiscal year 2012-13, according to information submitted to the Office of State Budget on Sept. 30.

If next year’s budget is approved, the senior center program will have been allotted more taxpayer dollars in three years – $9 million – than it expended from the time it was conceived in 1991 until the last of the more than six dozen original projects were completed nine years later.

And even if the proviso Foster cited had singled out the program and the amount to be allocated, there would still be a problem.

The proviso says that in order to provide maximum flexibility in absorbing general fund reductions. Agencies were authorized to spend agency earmarked and restricted accounts designated as “special revenue funds” to maintain critical programs previously funded with general fund appropriations.

But that wouldn’t have applied to the senior center program, which has always been funded with bingo license-tax revenue, not general fund appropriations.

A 20-Year ‘Temporary’ Program

The Senior Center Permanent Improvement Program was created by the General Assembly to finance improvements to 74 senior centers throughout the state. A proviso in the 1991-92 state budget directed a minimum of $948,000 in “other funds” to the program through a temporary increase in the bingo license tax.

The proviso also directed that the allocation be repealed when collections reached $8.8 million.

The money was to be allocated through a competitive grants process that was created to finance specific projects. The competitive grants process was also repealed, effective Oct. 1, 1997; and work on the last of the original 74 centers was completed in 2000, records show.

Yet, the program continues on.

Indeed, the program has evolved from a limited-scope initiative into a fixed part of the state’s bureaucracy, spending tax dollars even though legislative authorization apparently no longer exists.

Neither officials with Lt. Gov. Ken Ard’s office nor previous officials under former Lt. Gov. Andre Bauer have been provided The Nerve with enabling legislation for the program.

When representatives of the lieutenant governor’s office were interviewed in 2009, they asserted, “The original legislation was amended by the General Assembly in 1997 to continue it beyond the original list” of 74 projects.

However, neither the lieutenant governor’s office nor the S.C. Legislative Council, which drafts bills, was able two years ago to locate any other statute authorizing the specific use of monies in the program fund for the competitive grants program.

Representatives from Bauer’s office cited Section 12-21-3441 of the state code as authorization for the continuation of the program. However, that section refers to financing improvements to the original 74 senior centers, and has since been repealed.

A second section, 12-21-4200, does authorize the appropriation of the bingo tax revenue to the program fund. But the provision addresses only where the money is to be deposited, not how it is to be disbursed.

When Foster, the spokeswoman for the current lieutenant governor, was asked by The Nerve to provide the legislation that enables the lieutenant governor’s office to continue disbursing money, she too cited 12-21-4200, along with 43-21-40.

The latter says the state Council on Aging, which is under the lieutenant governor’s office, shall “administer the Senior Citizens Center Permanent Improvement Fund established pursuant to Section 12-21-3441 and community services programs in accordance with Section 12-21-3590.”

However, glancing through the S.C. Code of Laws shows that both Sections 12-21-3441 and 12-21-3590 are no longer on the books. In other words, The Nerve was again unable to locate any legal authorization for the program.

Part of a Larger Problem

The program is important, not just because many millions in state tax dollars have been spent with little supervision, but because it highlights a serious flaw in the state budget process connected to so-called other funds.

Other funds represent approximately one-third of the $22 billion state budget but are expended on autopilot, with little oversight or transparency. As such, it makes re-evaluation of programs for necessity and efficiency difficult, making accountability arduous, if not impossible.

To emphasize just how difficult evaluation of such programs can be, information about the senior center program is listed on just a single line in the 2011-12 Office of State Budget’s detailed base budget, a document more than 650 pages thick.

Yet, despite the program’s relative anonymity, there’s been greatly increased activity over the past couple of years.

Consider that between the beginning of 2005 and the end of 2009, there were 52 total expenditures through the endeavor, or barely 10 a year on average, according to the state comptroller general’s office.

However, since the beginning of 2010, some 487 expenditures have been made, records show. After just 12 payments in all of 2009, there were 276 payments made in 2010; this year through July 15 a total of 213 payments have been made, a pace which would work out to nearly 400 for the year.

Through mid-summer of 2011, $1.9 million had been doled out through the program.

Since the Policy Council, The Nerve’s parent organization, first wrote about the program in April 2009, nearly $2.7 million has been spent, bringing the total to approximately $12.5 million since the program was supposed to have been discontinued in 2000.

In addition, the program’s fund has a balance of another $2.9 million, according to the S.C. Comptroller General’s Office.

Among projects in the Midlands area alone are the following:

  • $350,000 for a new addition at the Lexington Senior Center, which was recently completed;
  • $350,000 for a renovation to the Swansea Senior Center, which was approved in January;
  • $350,000 for an addition to the Pelion Senior Center, approved earlier this year;
  • $350,000 for the Little Mountain Library, approved earlier this year;
  • $350,000 for Antioch Baptist Church of Columbia to build a senior center, approved in May;
  • $286,235 to the Midlands Community Development Corp. for work on a senior center connected to the Bible Way Church of Columbia, approved earlier this year;
  • $112,000 for the Capital Senior Center in Columbia for renovations, which were finished earlier this year;
  • $55,000 for Tri-City Leisure Center in West Columbia, approved earlier this year; and
  • $24,927 for the Batesburg-Leesville Leisure Center to purchase an emergency generator, approved earlier this year.

When asked why the number of projects has skyrocketed in recent years, Foster replied by email, “Use of Permanent Improvement Funds for aging services to compensate for the loss of state funds as authorized under Proviso 89.87.”

She declined to elaborate.