Alan Butkovitz: Philly Schools Owe Past Employees Millions of Dollars

City Controller Alan Butkovitz | Photo Credit: Curtis Blessing

Philadelphia City Controller Alan Butkovitz released an audit Wednesday that makes the school district look a little frazzled.

He says his team found that the district owed past employees more than $5 million in unclaimed compensation as of last June. Some of those workers left the city’s schools as long as 10 years ago. He also claims that school officials don’t know what happened to hundreds of TransPasses, which are provided to students to use to travel to school on public transit. “During a one-week sampling of TransPass activity at five different schools, school personnel could not account for 230 of the passes valued at $4,200,” a press release from his office reads.

Last year, just 13 TransPasses could not be accounted for in the Controller’s audit.

“The school district needs to improve oversight and eliminate the risk for theft and misuse,” said Butkovitz in a statement. “Designated school personnel need to follow the appropriate steps every week and review who has received the passes and properly accounted for the unused ones.”

Here are a few more highlights from Butkovitz’s report:

The Controller also found the School District’s $5 million in student activity funds at risk for fraud or misuse.  These are funds collected from students and monitored by school personnel to be used for after-school events, trips and other activities.  The deficiencies included activity funds with negative account balances, non-compliance with bidding requirements and improper retention of school-related funds.

“This lack of oversight and accountability invites fraud and the misuse of students’ and parents’ money,” said Butkovitz. “School employees in charge of these funds need to be properly trained and held accountable for complying with the School District’s policies.”

In addition, the Controller’s audit indicated that $53,000 in petty cash funds were written-off at 60 schools as a result of fund shortages.  School principals again failed to adequately prioritize accountability over their equipment, as 30 percent selected from the School District’s accounting records could not be found.

What does the school district have to say about all this?

“It is very important to note that the City Controller found no material or significant findings in his audit of school district finances for fiscal year 2014,” said Fernando Gallard, a spokesman for the district. “This is the second clean audit report in a row with no material or significant findings, meaning that the district has correctly reported its expenses, revenues, assets and liabilities, and follows a similar clean audit of the district’s use of federal funds.”

The district also said in its formal response to the audit that it has taken several steps to provide the unclaimed pay to its former employees, and therefore “takes exception to the statement that the district has taken little action to resolve the outstanding amounts.”

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