From staff reports

Auditor General Eugene DePasquale on Oct. 6 released an update on his ongoing audit of the state Department of Community & Economic Development’s waiver process for businesses that appealed Gov. Tom Wolf’s orders to close in March.

In a press release issued from the Department of the Auditor General, DePasquale said more than 500 businesses received answers from DCED that later changed.

“The waiver program appeared to be a subjective process built on shifting sands of changing guidance, which led to significant confusion among business owners,” DePasquale said.

Wolf on March 19 ordered businesses not deemed “life-sustaining” to close as part of his mitigation efforts when the coronavirus began to spread. He made the allowance for those businesses to request a waiver and stay open.

According to the release, however, numerous businesses and legislators have said the waiver process through DCED lacked transparency, moved too slowly and provided inconsistent or changing answers.

When Wolf ordered the closures in March, businesses seeking a waiver, or exemption from the order, were to receive one of three answers on their application: Yes, approved to continue in-person operations; No, a denial requiring the business stay closed; or Not Required, meaning the business could stay open and was already categorized as life-sustaining.

So far, auditors have found:

• 171 waiver applications were changed from “No” to “Yes.”

• 151 waiver applications were changed from “No” to “Not Required.”

• 73 waiver applications were changed from “Yes” to “No.”

• 48 waiver applications were changed from “Not Required” to “No.”

“Some owners of small businesses may not have had the knowledge to use the right ‘buzzwords’ in their justification for remaining open, or realized they could ask a legislator for help to navigate the process,” DePasquale said, noting that some businesses submitted multiple waiver requests.

DePasquale has asked the Wolf Administration for copies of emails and other communications regarding any specific businesses involved in the waiver process.

DCED has reportedly been cooperating with the Auditor General, though some issues remain, and DePasquale said the audit is not yet complete. Formal findings and recommendations will be included in the final audit report when it’s complete.

The audit began in May.

From March 20 to April 3, DCED received 42,380 applications for the waiver.

By April 30, DePasquale announced he would conduct an audit on the waiver process.

During the period to apply for the waiver, 523 businesses’ answers were changed, and DCED provided no explanation for the change, except to say that further review had been performed.

The release from DePasquale goes on to say that whether outside influence was part of DCED’s decisions is still being analyzed. Auditors are combing through 574 pages of emails, texts and other communications between legislators, lobbyists and DCED staff from March 20 to April 3.

DePasquale reports that one of the major flaws of the rapidly deployed waiver-processing system is that it appears to be remarkably subjective.

He pointes to a lack of consistency, constantly changing guidelines and unverifiable information on applications.

The audit delved into applications from all over the state from garden centers, construction companies, food trucks, notaries, hair salons, pet groomers and massage therapists — all businesses that received inconsistent answers, answers that changed or were otherwise met with confusion about the definition of essential, or life-sustaining.

More detailed information can be found at www.paauditor.gov.