PHEAA Audit Finds Too Much Money On Perks, Seeks Board OverhaulTeam 4: PHEAA Making $19M In Budget Cuts
POSTED: 11:59 am EDT September 12,
2007
UPDATED: 6:04 pm EDT September 12,
2007
HARRISBURG, Pa. -- Pennsylvania's student-loan agency said it will freeze executive bonuses and take other steps to cut $19 million in spending without laying off employees because pending federal legislation would reduce subsidies to lenders.The Pennsylvania Higher Education Assistance Agency expects to lose $44 million in federal aid this year under the bill, which President George W. Bush has indicated he will sign.The agency had previously anticipated a $25 million loss under an earlier version of the bill and took steps, such as reducing the cost of employee benefits, to cover it, PHEAA spokesman Keith New said.
But the Wednesday announcement does not affect the $500,000 in bonuses that were handed out to PHEAA executives last month.In a memo circulated to PHEAA's 2,600 employees on Tuesday, president and chief executive officer Dick Willey said the agency will not award any executive or employee bonuses for the 2007-08 fiscal year, leave vacancies unfilled and end nonessential overtime and travel.During the Penn State University and Notre Dame football game on Saturday, 50,000 fans were seen shaking white pom-poms after every touchdown and field goal.Those pom-poms were paid for by PHEAA.Team 4 found that PHEAA spent $25,000 this football season on pom-poms for Penn State home games as part of its annual advertising budget that comes in at more than $7 million a year.On Wednesday, officials said they might also reduce spending on items such as advertising, sponsorships and building maintenance. That would include items such as the Penn State pom-poms. The agency is currently considering ending executive bonuses altogether. The budget cuts were not related to a letter Gov. Ed Rendell sent last week to leaders of its governing board criticizing more than a half-million dollars in bonuses that were awarded this year, New said.Citizen activist Eric Epstein said PHEAA's leaders should have considered the potential impact of the federal legislation "prior to authorizing and accepting lavish bonuses."
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Copyright 2007 by ThePittsburghChannel. All rights reserved. This material may not be published, broadcast, rewritten or redistributed. The Associated Press contributed to this report.
