Here's some little snippetts from the linked article:

Retired University Park Detective Ronald Schreffler believed he had enough evidence in 1998 to charge then-Penn State assistant football coach Jerry Sandusky with something after the man admitted to a boy's mother to showering naked with her son.

"At the very minimum, there was enough evidence for some charges, like corruption of minors," Mr. Schreffler said on Wednesday

At the time, Mr. Gricar spoke to Mr. Schreffler's police chief, Tom Harmon, and that was it.

"'Gricar said there wasn't enough to charge, and he said to close the case,'" Mr. Schreffler recounted.

And that was it.

Mr. Schreffler speculates that the district attorney declined to press charges because the state Department of Public Welfare didn't indicate a charge of abuse, which would have made the prosecution's case even more difficult.

"It'd be a little hard for them to prosecute, when you have the state saying there wasn't any abuse."

In an interview with the Pittsburgh Post-Gazette, Mr. Lauro said he closed the case because he lacked substantial evidence that there was abuse.

"It didn't meet the criteria," Mr. Lauro said. "If I really thought there were any child abuse ... I definitely would have indicated it."

http://www.post-gazette.com/pg/11352/1197680-454.stm

In my humble opinion, the ones who really dropped the ball and allowed this whole tragedy are The State Department of Public Welfare - ironic isn't it?