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State Rep Renews Call For State Financial Oversight Of Penn Hills School District

PA House of Representatives
Pennsylvania Rep. Tony DeLuca speaking to the state House of Representatives on March 16, 2016.

Pennsylvania  Rep. Tony DeLuca is calling on the state’s Department of Education to step in and oversee the Penn Hills School District’s finances.

Last week, the school board approved increasing property taxes for the second year in a row, just months after Auditor General Eugene DePasquale released an audit that found the district had accumulated more than $170 million dollars of debt.

DePasquale blamed that debt on what he called a “total breakdown” in oversight and management. Most of that debt came from a 2010 bond issuance for $135 million to construct and renovate schools, but DePasquale said there was no plan in place to pay for those updates.  

The district’s 2017-18 preliminary budget projected a nearly $2.1 million deficit. The board approved a proposed final budget last week that included a surplus of $4,000. The final budget will be voted on at the board's June 26 meeting.   

DeLuca said the district’s success will make or break the Penn Hills community.

“The municipality of Penn Hills, the homeowners, just can’t afford to have their taxes raised. And they shouldn’t have them raised for mismanagement,” DeLuca said.  

Allegheny County District Attorney Stephen Zappala’s office is continuing an ongoing investigation into the district’s financial practices to determine whether or not criminal charges should be filed.

Hines said investigators are in the buildings regularly taking boxes of evidence. The board unanimously voted to fire the district’s former business manager, Richard Liberto, in November 2015 after being placed on leave in March 2015 when Hines said she discovered the district was $9 million dollars in debt from the previous year. Since that discovery, Hines said she has been in regular communication with the Department of Education.

She said the district has taken several corrective actions based on DePasquale’s audit including the switching the bus company it operates. DePasquale’s audit cited the district’s failure to review or maintain documentation of its 25 bus drivers. Hines says administrators now review those records monthly. The Auditor General also found consistent failure to review, authorize and account for credit card purchases.

Hines said all credit card accounts have now been closed. She added the district needs to continue reform efforts, but she’s not satisfied that the changes are happening fast enough.  

DeLuca said in his letter that he thinks the district’s financial situation will not improve without state intervention.

Hines said it’s important that the district of nearly 4,000 students keeps local control of finances and curriculum decisions.

“There’s a lot of classes that we have here that someone more business-minded may say, ‘Oh, that’s fluff. Those are electives, only offer the four cores, you don’t need the arts, you don’t need the band, the music program, you don’t need the extra-curricular including the athletics,'” she said. “Certainly we wouldn’t want somebody to come in and impose that on us.”

*UPDATED: June 2, 2017 at 2:18 p.m. to reflect the district's most recent budget changes. 

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