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A Bad Tax Collection Deal Increased Debt For Wilkinsburg School District, Audit Says

Kathleen J. Davis
90.5 WESA
Wilkinsburg School District Superintendent Linda Iverson (center) speaks on Wednesday, February 27. Wilkinsburg Mayor Marita Garrett (left) and Pennsylvania Auditor General Eugene DePasquale (right) also spoke.

Pennsylvania Auditor General Eugene DePasquale said Wednesday that Wilkinsburg School District entered a bad agreement to collect delinquent taxes in 2013, increasing financial difficulties for the already cash-strapped district. DePasquale said the unsuccessful deal lost the district more than $1.2 million; he likened the situation to gambling with public money. 

"The district executed an agreement to sell its delinquent real estate taxes in exchange for accessing a $2.4 million line of credit," the report states. The agreement was terminated in 2017 and the debt was paid off using state subsidies.

Wilkinsburg School District was under state financial watch status in 2013 when the agreement was executed. Because of this, DePasquale said some responsibility lies with the state.

"The state Department of Education in 2013 should not have allowed it," DePasquale said. "They did, and that $1.2 million was a huge hit to Wilkinsburg."

The audit looked at a time frame between July 2013 and June 2017, when the district was under different leadership. DePasquale's audit recommends the district develop a long-term financial plan with measurable goals, which will be submitted to Pennsylvania's secretary of education.

The district closed its middle and high schools in 2016 due to declining enrollment, which contributed to its financial difficulties. It now consists of two elementary schools.

The audit found the district did not retain documentation related to transportation reimbursements and tuition, as is required by the state. The district also failed to develop a mandatory safety plan and did not comply with bullying prevention requirements.

Superintendent Linda Iverson, who joined the district in 2016, said Wilkinsburg's schools are committed to improvement.

"While the district takes all recommendations very seriously, we would like to stress that collective actions on findings contained in the report are already in progress," Iverson said.