PA Auditor General Appalled By Penn Hills Financial Revelations

May 23, 2016

Five years ago, the Penn Hills School District was in $11 million in debt. Today, a recent audit revealed the district is $170 million in debt and is also under investigation for alleged mismanagement of money.

Pennsylvania Auditor General Eugene DePasquale is a part of the team tackling 74 pages of an audit detailing the district’s spending from July 2012 through June 2015 and revealed spending habits that led to what DePasquale describes as “almost unsurmountable” debt.

“It’s as bad as we’ve seen,” said DePasquale.

According to Depasquale, the district is missing at least $22,000 in cash from sporting events, and at one point the district had over two dozen credit cards that were not being regulated or monitored. Cash from sporting events was not logged or tracked and was kept in the school locker rooms over the weekend.

In addition to the missing cash and unregulated cards, Penn Hills’ busing contractor has been a point of potential criminal activity. According to the audit, the contractor misappropriated $384,500 in district fuel.

Evidently the tax exempt fuel was being sold, but the district ended up leaning in to local tax money to pay for some of its busing fees regardless, as the state reimbursement could not cover it all. DePasquale explained the district made no attempt to monitor bus routes or base bus usage on need during this time.

“They did a $135 million bond issue for a building plan with no plan to pay it back,” said DePasquale.

With such big purchases and mistakes occurring, many are scratching their heads as to why no one came forward or stopped it.

“Clearly there was an architect’s report and private audits, but the district either didn’t want to hear it or buried it,” DePasquale said.

While it’s not uncommon for a school district to have a credit card, it is highly questionable and unusual for a district to have over two dozen, especially when the cards that went virtually unmonitored, according to DePasquale.  

DePasquale feels concern that criminal activity was potentially occurring. The two most concerning elements were the bus contractors and the $22,000 in cash unaccounted for in the district’s books.

To avoid a situation like Penn Hills', DePasquale recommends that other school districts have only one credit card and a purchasing approval process, a plan in place for keeping track of cash and a bid for contractors to take over busing.

“When they’re working on repaying this debt, that’s money that’s not going to the classroom. It’s hard to imagine that there won’t be some impact felt by the kids,” said DePasquale. 

More Essential Pittsburgh segments can be heard here.