News

PA Auditor General's report warns against turnpike swaps

Written by The Associated Press | Jan 8, 2013 4:22 PM
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(Harrisburg) -- Pennsylvania's elected fiscal watchdog says the turnpike commission lost about $109 million in interest rate swaps, and says it needs greater accountability in how the four commissioners' expenses are reported.

Auditor General Jack Wagner, whose term expires next week, says governmental entities should not be using swaps, given the risk they carry and that fixed-rate borrowing is currently cheap.

Turnpike officials say Wagner used incorrect methods to calculate the financial impact of the swaps.

Wagner also criticized the commissioners for expenses that included hotel stays that sometimes exceeded $300 a night and an overall "lack of transparency" in accounting for the costs.

He says the turnpike also should install fire detection systems in all of its tunnels and more rigorous procedures to follow up on tunnel inspections.

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