Audit: Taxpayer funds misspent by Real Alternatives, which oversees Pa. crisis pregnancy centers

What exactly that money was used for, though, continues to be unknown.

Life Balloons
American Life League / Flickr
Sarah Anne Hughes

Updated 8:23 p.m.

HARRISBURG, Pa. — The nonprofit that receives taxpayer funds to oversee crisis pregnancy centers and other so-called abortion alternatives misspent some of the money it received from the state, a report from the auditor general concluded.

What exactly Real Alternatives used that money for, though, may never be known.

The audit, which was released today, was conducted by Auditor General Eugene DePasquale at the request of the Pa. Department of Human Services, which previously conducted its own audit of Real Alternatives. DHS’ audit determined that Real Alternatives charges a three percent fee to its service providers under a separate agreement by withholding grant money.

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DHS requested DePasquale’s audit to “determine whether the collection and use of the three percent fee is appropriate,” after Real Alternatives refused to turn over documentation that showed how it spent more than $497,000 withheld between June 30, 2013 and June 30, 2015.

DePasquale’s office requested that documentation, which led Real Alternatives to sue the auditor general and DHS to block the request. The Commonwealth Court of Pennsylvania determined Real Alternatives didn’t have to turn over documentation, because the nonprofit admitted “it does not use the 3% funds for grant purposes and contends the funds are private, corporate funds.”

“Think about how absurd it is to sue — whether it be me or anyone else in state government — because they don’t want you to see how they spend taxpayer dollars,” DePasquale said today at the state capitol.

According to DHS’ audit, Real Alternatives said it used the 3 percent funds for expenses related to promoting the program in other states. DePasquale said it’s unclear how long Real Alternatives has misspent the funds — it could be decades, he said — and what exactly the funds were used for.

“Using taxpayer dollars outside of Pennsylvania should outrage every single Pennsylvanian,” regardless of how they feel about abortion, DePasquale said.

In a statement, Real Alternatives said it “continues to be shocked by the misrepresentation” of its agreement with service providers by the state.

“Service Providers are fully paid as part of the DHS state program, administered by Real Alternatives, that funds them,” the statement continued. “Since at that moment, it is the Service Provider’s earned money, they are free to do with it whatever they want. They voluntarily use THEIR funds to hire Real Alternatives to advance their life-affirming work throughout America. At NO time do PA state taxpayer funds pay for any of this work.

“The reality of the situation between Real Alternatives and its Service providers shows two separate agreements legally, ethically, and morally working together. The simple contract law principals are clear to the parties and any other party concerned about the truth.”

The auditor general reports concludes that:

  • Because of lax oversight by DHS, Real Alternatives was allowed “to withhold three percent of its service providers’ grant reimbursement and to use the funds for purposes not permitted by the grant agreement for several years”;
  • and that DHS conducted a good audit, but needs to improve its audit documentation.

DePasquale called on DHS to recover the misspent funds from Real Alternatives and to turn that money over to the subcontractors, which the agency agreed to do in a letter included in the audit.

When asked if he thinks the money can actually be recovered, DePasquale replied there’s “always hope.”

After Sept. 30?

Real Alternatives has had a contract with the state since 1997 to provide “life-affirming pregnancy and parenting support services.” That takes the form of providing funding to crisis pregnancy centers, some of which “are not straightforward” with patients about the services they provide, Kim Kir of the Allegheny Reproductive Health Center previously told The Incline:

Some, she said, will make it seem as if abortion services are offered. “Then when they get them in the door, they simply try to block them from having an abortion,” she said.

Real Alternatives is also connected to at least one website that provides inaccurate and inflammatory information about abortion and its health effects.

According to the audit, Real Alternatives administers funding to 27 provider networks in Pa., which in turn run approximately 91 facilities. The most recent five-year grant Real Alternatives received from the state was worth more than $30 million.

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Real Alternatives’ current contract with the state was extended from June 30 of this year to Sept. 30, and DePasquale said it’s up to DHS to extend the grant beyond this month.

A spokesperson for DHS said the agency is in discussions with Real Alternatives: “Services will continue to be provided while those discussions are ongoing.”

DePasquale noted that DHS had indicated that Real Alternatives is the only organization that can meet the requirements of the grant. “I find that hard to believe,” he added. Going forward, he said Real Alternatives will “have to show how they’re using” the three-percent fee to ensure it complies with the grant agreement.

In DHS Acting Secretary Teresa Miller’s letter to DePasquale, she writes the agency will include “explicit language in future grant agreements with RA […] addressing the 3% fee arrangements, including identification of all agreements with its service providers and ensuring that all grant funds are used for the benefit of Pennsylvania residents.”

DePasquale said he’s a supporter of abortion access and understands why some may question his motives in conducting this audit. But he stressed that when there’s a grant agreement in place, recipients must deliver what’s agreed upon.

“We will never know how much money was taken out of the commonwealth,” DePasquale said. “We need to make sure this never happens again.”