General Assembly approves audit of SPSA

State lawmakers in Richmond this week voted unanimously for an independent audit of the finances and operations of SPSA, the regional waste authority plagued in recent years by debts, lawsuits and controversy.

Under a resolution passed by the Senate on Tuesday and the House on Wednesday, the state auditor of public accounts will conduct the review of SPSA’s internal workings and also compare them to how other trash authorities and private garbage companies do business.

The audit team will spend nearly a year on the effort, poring through documents and spreadsheets and conducting interviews. The auditors must report their findings, along with any recommendations for improvements, to the General Assembly by January.

“We’ll be asking things like, 'Why did you do this or that?’ and 'Why did you enter this particular contract?’ and 'What can you do about it now?’ Stuff like that,” said Walter J. Kucharski, who heads the Auditor of Public Accounts office, a state agency.

“We’ll be looking at the numbers and finances, of course,” he added. “But we’re also looking at performance – what’s worked and what hasn’t.”

Two local legislators – state Sen. Fred Quayle, R-Suffolk, and state Del. John Cosgrove, R-Chesapeake – sponsored the audit bill.

Cosgrove had wanted a deeper, tougher inquiry of the Southeastern Public Service Authority, an agency he said has lacked sufficient oversight for years. But those attempts were voted down or blocked this year and last.

So Cosgrove and Quayle jointly introduced their compromise bill for a state audit this year, which has sailed through the Legislature.

“I don’t need to tell you about the many questions and concerns we’ve received about SPSA,” Quayle said Thursday. “We’re asking for a good hard look at how they’re operating. And I’m confident that if they’re not operating correctly, we’ll find out what’s wrong and do something about it.”

John Hadfield, SPSA’s executive director, who is retiring in August and will not be in office when the audit is completed, said the waste agency supports the Cosgrove-Quayle resolution.

SPSA, Hadfield said in an e-mail Thursday, “has worked with the APA on routine audits in the past and we look forward to working with the APA in this capacity.”

SPSA was launched in the 1970s to handle most garbage and recycling in eight counties and cities in South Hampton Roads.

It has amassed about $250 million in debts since then in building a regional waste system, but member communities began to get nervous last year over how and when that money will be repaid.

In response, SPSA imposed the highest disposal fees in the state – $100 per ton of garbage – to help restore financial stability, offered early-retirement buyouts to employees and cut operational costs by 7 percent.

At the same time, the agency was sued by the city of Chesapeake, which sought to leave SPSA early, citing lost confidence in management and policy.

Also last year, an unpopular deal fell through to bring New York City trash to Portsmouth for incineration, and SPSA executives were found to be spending generously on trips, meals and other business expenses while decrying their financial crisis.

Kucharski, with the Auditor of Public Accounts, said his office has experience with analyzing waste authorities.

More recently, though, the office has reviewed the conditions inside the Virginia Department of Transportation and spending problems at the state Game and Inland Fisheries Department, and is now helping to sort through the state’s $2 billion computer-network contracts.

“There’s always too much for us to do,” Kucharski said.

Scott Harper, (757) 446-2340, scott.harper@pilotonline.com