AUDITOR QUESTIONS PRACTICES OF FIRM CONTRACTED BY PIC

The Missouri State Auditor's office has expressed concerns about some business practices of a Columbia-based company that operates the Federal Job Development and Training Program for the Southeast Missouri Private Industry Council in Cape Girardeau.

"The practices may have violated contract provisions prohibiting employees from using their positions for personal financial gains," said a spokesman from State Auditor Margaret Kelly's office.

The PIC had contracted the state auditor's office to look into the situation because it, too, had some concerns regarding the activities of Syn Tech, previously known as Inter Tech of Columbia.

As a result of the state auditor's findings regarding the PIC and Inter Tech, Kelly is questioning more than $130,000 in costs that were incurred by the PIC during fiscal year 1993, said Frank Ybarra, public information officer in the state auditor's office.

The findings are part of the annual audit of all federal funds received by the state.

"Although that audit had not yet been released, the state auditor issued her findings regarding this particular situation because the PIC is in the process of reviewing its contract with Syn Tech," said Ybarra.

Mary McBride, executive director of the local PIC, was notified of the auditor's feeling by letter last week.

"I can't comment on the situation at this time," said McBride, who was contacted at her office Monday.

Ybarra added that the findings did not involve criminal behavior.

"It's a question of violating a contract," he said.

The PIC, which receives federal funds for job development and training programs, contracted on a cost reimbursement basis with Syn Tech to operate its job development and training program. The contract includes providing job training information and assistance to program participants.

One provision in the contract required Sny Tech to "establish safeguards to prohibit employees from using their positions for a purpose that is, or gives the appearance of, being motivated by a desire for private gain for themselves or to others, particularly those with whom they have family, business, or other ties."

In the course of providing services to PIC, Syn Tech purchased training manuals from Paradocs Publications and leased equipment from an entity called A&E Office Facilitators.

The president of Syn Tech -- John Elias -- and his wife -- Julie Elias -- are sole owners of Paradocs and A&E.

Neither Paradocs nor A&E could provide sufficient detailed documentation to support the costs incurred, said Ybarro.

The relationships between Syn Tech and these other entities appear to conflict with the contract provisions, noted the auditor's report. "The absence of adequate supporting documentation to justify these expenditures casts a cloud," said Ybarro.

"The auditor's office is questioning manual costs of $81,000 incurred during the year ended June 30, 1993, and $51,000 for equipment leasing.

"I think much of the problems concerns the cost of the manuals," said John Elias, who was reached as his office Monday. "I was surprised when I received a copy of the audit. We had two meetings with the state auditor, and we have been in contact with PIC."

Elias is author of the PIC manuals.

Prices of the manuals ranged from $80 to $240.

"We arrived at the costs by agreement with PIC," he said. "As far as A&E equipment rental is concerned, we're cheap. We checked around with other equipment rental agencies before determining our lease rates."

Elias added that Syn Tech met all of the performance requirements as a PIC subcontractor, and that his company had already been selected as a subcontractor for the 1994 fiscal year.