Pa. auditor criticized for transfer of school review duties

Financial reviews of school systems released by the state auditor general’s office last month revealed fairly typical yet important findings about discrepancies that districts had while spending taxpayer dollars.

The audits showed, for example, that the Bethel Park School District lacked adequate internal controls, leading to inaccurate reporting of transportation data that resulted in an overpayment of about $220,000. The Norwin School District had a similar issue with transportation data that led to an overpayment of more than $101,000.

Those routine but necessary reviews that help determine whether schools receive the state subsidies and reimbursements they are entitled to, accurately managed taxpayer funds and complied with ethics codes have been a staple of the auditor general’s office for years.

But it will no longer be a part of the office’s work after state Auditor General Timothy DeFoor last week announced that he would return the responsibility of school audits to the Pennsylvania Department of Education — a move quickly criticized by a variety of education stakeholders.

“Our department was performing these audits for decades on behalf of PDE,” Mr. DeFoor said in a statement. “There are several factors that led to this decision, but as we looked carefully at the work of our department one thing has become clear — we need our auditors to focus on the work we are required by law to perform.”

Mr. DeFoor, a Republican, explained the decision was made because years of budget cuts have significantly reduced the number of auditors in the office — 46 today compared to 120 in 2013. The reduction in staff has already increased the office’s length of time between audits to five years and could expand it to seven years if it were to continue, he said, meaning that findings may not be relevant when they are announced.

In addition, the reviews being performed are not fiscal audits but limited to issues such as reimbursement for transportation costs, teacher and bus driver certification, and fire and safety drill compliance, according to Mr. DeFoor.

“Since these audits are the responsibility of PDE,” the auditor general’s office said, “the work should reside with that department.”

The Department of Education did not respond to a request for comment, but education stakeholders chastised the move as one that would decrease oversight of school entities.

Pittsburgh Controller Michael Lamb, who also serves as controller for the city schools, said in a statement that the state Department of Education “does not have the capacity nor capability to conduct such work,” and that for- profit charter schools would take advantage of the situation.

“This decision should be viewed as an attack on Pennsylvania’s public education system as charter schools will continue to deplete the resources of districts across the state without a check on their fiduciary responsibility to students and taxpayers,” Mr. Lamb said. “Make no mistake about it: There is now no independent oversight of the 500 public school districts or 179 charter schools and cyber charter schools in the state.”

Mr. Lamb, a Democrat, said the state Legislature should move to codify the auditor general’s auditing responsibility and provide proper funding to the office. State lawmakers should also allow local auditing authorities to have full access to the public schools within their jurisdiction, he said.

The auditor general’s office is statutorily required to audit liquid fuels tax collections by municipalities, municipal pension plans and volunteer fire relief associations that receive state aid from the department, as well as various county offices and numerous other state government entities.

The auditor general’s office said it would transfer the responsibility to the Department of Education effective April 22, but that it may still audit specific activities of educational entities that use taxpayer dollars through the Bureau of Performance Audits. Performance audits gauge whether government programs and activities are meeting stated goals and objectives, and if tax dollars are being spent efficiently and effectively, according to the auditor general’s office.

The Pennsylvania Association of School Business Officials warned that the auditor general’s decision may cause an increased workload for the Department of Education that could jeopardize the ability of the state to assist the implementation of the federal programs and resources intended to support students beyond the pandemic.

“At the moment, the PDE is currently working with limited resources to review hundreds of federal funding applications submitted by charter schools and school districts pursuant to federal deadlines,” the group said. “PASBO expresses significant concern that placing this additional responsibility on the PDE could disrupt their ability in the future to implement federally required processes designed to support students who have struggled during this pandemic.”

Now is not the time for the auditor general to give up the responsibility, PASBO opined further, since charter school tuition and pension contributions have grown by more than $6.5 billion over the past decade.

In a letter, the president of the Pennsylvania State Education Association requested that the auditor general reverse his decision because no entity is prepared to assume the responsibility.

“This irresponsible action will effectively end any organized, state-level audits of the commonwealth’s public schools on April 22, with no plan for any other state government department or agency to assume this critical function,” PSEA President Rich Askey wrote.

He said that although the people who manage the financial resources of Pennsylvania’s public schools are qualified, continued financial review of educational institutions is fundamental to ensuring that the public has confidence in them.

“Audits are an important part of this process,” Mr. Askey wrote. “Unfortunately, you have decided to stop performing them. Unless you reverse your decision, it is unclear who will perform them, how they will be performed, or when, if ever, they will be done. Responsible governing requires forethought and planning. Your decision to end audits of public school entities shows evidence of neither.”