Program That Won’t Die Continues Spending Millions

August 4, 2011

Investigative Reports

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By KEVIN DIETRICH

More than two years after the South Carolina Policy Council first reported about a program run out of the state lieutenant governor’s office that had spent nearly $10 million a decade after legislation called for it to be discontinued, that same endeavor continues to drain millions in taxpayer dollars, with little notice.

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 11 years after the original projects were completed the program is still siphoning off tax dollars.

In fact, it’s not only thriving, it’s growing by leaps and bounds. Allocated $1,075,635 in fiscal year 2009-10, the program is estimated to have gotten three times that amount during the last fiscal year and is expected to receive another $3 million this year.

Through July 15 of the current calendar year alone, $1.9 million has been doled out through the program.

Since the Policy Council, The Nerve’s parent organization, wrote about it 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.

SC Permanent Improvement Program

Click to enlarge page and see balance of funds in Permanent Improvement Program.

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

But trying to find out why the program has grown sharply during a time when lawmakers on both sides of the aisle are gnashing their teeth over budget woes – or even why it’s still in existence – is no easy task.

Officials with Lt. Gov. Ken Ard’s office declined to answer inquiries, as did individuals with the Office on Aging, which administers the program and is under the lieutenant governor’s office. The S.C. Department of Revenue, which collects bingo tax money that goes to fund the program, also did not return phone calls.

What is known is that since its inception in 1991 the Senior Center Permanent Improvement 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.

The program, which is funded through the “other funds” portion of the budget, reveals a serious flaw in the state budget process.

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 it hard to assess which programs are no longer necessary.

To emphasize just how difficult evaluation of such programs can be, information about the Senior Center Permanent Improvement Program is listed on just a single line in the 2011-12 Office of State Budget’s detailed base budget, a document which entails more than 650 pages.

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 Comptroller General’s Office.

However, since the beginning of 2010, some 487 expenditures have been made, or an average of more than 330 a year if 2011 continues at its current pace. After just 12 payments in all of 2009, there were 276 payments made in 2010, and through July 15 there have been 213 payments, a pace which would work out to nearly 400 for the year.

Why the increase? Sharon Seago, the director of Area Agency on Aging for the Central Midlands Council of Governments, which receives money for eligible projects in the Midlands, thinks the program has cracked down on the amount of time recipients have to complete projects.

“I think they’re being told ‘you’ve got to be done within a specific time frame,’ rather than letting the projects sit undone indefinitely,” she said. “That may mean requests for money are coming in more rapidly.”

What’s not in question is that the number of projects being undertaken by the program has spiked.

In the Midlands area alone, according to Seago, funds have recently gone to or are earmarked for a number of projects:

  • $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 was 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.

Without response from Ard’s office it’s difficult to determine the reason for the recent colossal uptick in the number of checks being written through the program.

But while the program is on pace this year to set an all-time record for the number of payments made, it should be noted that the 276 payments recorded in 2010 – which represented 23 times the number made the previous year – took place under Ard’s predecessor, Andre Bauer, information from Comptroller General’s Office shows.

Tax Dollars Often Matched with Tax Dollars

According to Stephanie Blunt, executive director of the Charleston-based Trident Area Agency on Aging, which also receives Permanent Improvement Program funds, a match is required for each project.

“Usually for new construction you have to put up 30 percent, or about $100,000 on a $350,000 grant; for renovations, you’re required to put up 20 percent; and for emergency projects, you’re required to put up 10 percent,” she said.

The match money usually comes from a combination of sources. Some is private, while other money can come from the Council on Aging; community development block grants through the U.S. Department of Housing and Urban Development; or municipalities, such as cities and counties, Blunt added.

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 $948,000 in “other funds” be allocated 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 in total.

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 original 74 centers was completed in 2000. Yet, the program continued past the year 2000.

When representatives of the lieutenant governor’s office were interviewed in 2009, they claimed, “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 current competitive grants program.

Then-Lt. Gov. 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.

Despite extensive research, The Nerve was also unable to locate the legal authorization for the program’s current operations.

Ard’s office declined to respond to a request from The Nerve for proof of legislative authorization for the program.

Over the past dozen years, several grants valued at $350,000 and at least one at $390,000 have been awarded for capital projects. Since 2010, the largest awards have been $175,000, $150,000 and two grants of just over $120,000.

The S.C. Appalachian Council of Governments, which describes itself as a “voluntary organization of local governments in Anderson, Cherokee, Greenville, Oconee, Pickens and Spartanburg Counties,” received the $175,000, $150,000 and one of the $120,000-plus awards, all since May of this year.

In all, 14 different entities have received Permanent Improvement Program money over the past few years. These include the S.C. Appalachian Council of Governments, the Trident Area Agency on Aging and the Central Midlands Council of Governments. These organizations then disburse the money to projects approved by the lieutenant governor’s office.

While the lieutenant governor’s office, the Office on Aging and the state Department of Revenue all declined to go on the record with The Nerve to answer questions regarding this bureaucratic hot potato, one thing is abundantly clear: The Senior Center Permanent Improvement Program – started as a transitory program to assist a set number of facilities – has mushroomed into a bloated affair that shows no signs of slowing down, abiding by its original objective or adhering to the law.

Reach Dietrich at (803) 779-5022 ext. 110, or kevin@thenerve.org.