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State Rep. DeLuca Calls for Audit of Penn Hills School District

As the Penn Hills School District seeks an $18 million bond to cover operational costs, state Rep. Tony DeLuca (D-Allegheny) is asking state Auditor General Eugene DePasquale to get the bottom of the district’s fiscal woes.

DeLuca is calling for a full audit of the district’s budget after last week’s announcement that the district would seek court approval for the bond in order to meet debt service, payroll and retirement fund obligations.

“I’m not accusing them of misappropriation of funding, but by the same token, if nobody is tending to this store, then we need to find out because you can’t continue to run a  school district like that,” DeLuca said.

According to the Pittsburgh Post-Gazette, acting superintendent Nancy Hines said the district is $8.7 million in the hole. She said the annual budget is $77.9 million.

DeLuca said he is concerned about the impact of the unfunded bond issue on the taxpayers of Penn Hills.

“From what I understand, if the court gives them permission to get this money, we’re looking at two mill increase for the homeowners in Penn Hills,” DeLuca said. “That’s pretty substantial, because we have a lot of people on fixed incomes.”

The district’s bond rating was downgraded by Moody’s Investors Services in March. The firm cited the “rapid and severe deterioration of the district's financial position and lack of liquidity to meet current fiscal year obligations” as the reason for the downgrade.

DeLuca said it is unclear how the district ended up in this situation, and that he wants DePasquale to get to the bottom of it.

“They sold their buses, said they were going to save money. They laid off teachers and gave them a buyout to save,” DeLuca said. “I don’t know if it’s pertaining to the new schools they built or whether they overextended themselves or they just weren’t watching the figures.”

Susan Woods in the Auditor General’s office said the last audit of the district was released in March 2013, and that they were not scheduled to revisit the district’s financial situation so soon. But she said DePasquale “shares the same concerns” as DeLuca and they now plan to perform another audit as soon as possible.