Auditor General DePasquale Says Baldwin-Whitehall School District Must Fix Long-Standing Problems with Fiscal Operations, Management
Auditor General DePasquale Says Baldwin-Whitehall School District Must Fix Long-Standing Problems with Fiscal Operations, Management
Teachers, students meeting academic standards despite district’s management deficiencies
PITTSBURGH (June 22, 2015) – Auditor General Eugene DePasquale today said his audit of the Baldwin-Whitehall School District in Allegheny County shows that the district failed to correct long-standing concerns about its fiscal operations and management oversight.
“I am glad to see that teachers and students are meeting academic standards,” DePasquale said. “But, to be quite blunt, Baldwin-Whitehall School District must clean up its operation to keep the focus on education.
“Based on this audit, I would give the district leadership a failing grade in fiscal management and general oversight. That is especially unacceptable because Baldwin-Whitehall has a general fund balance that would be the envy of many districts,” he said. “If district leaders had their financial house in better shape it may have alleviated the need last week to pass a budget increasing taxes and cutting teachers and programs. Students, parents and taxpayers deserve better leadership at the district level.”
Among the three audit findings, auditors noted continuing problems with the district’s fiscal operations, including incomplete presentation of financial statement preparations, errors in payroll processing, incomplete physical inventory, and inconsistencies with the cafeteria fund. Many of these problems have been repeatedly noted in the district’s past four independent financial audits.
The district also failed to take appropriate action to correct issues found in a 2008-09 independent forensic audit, which revealed that an employee embezzled nearly $300,000 in district funds.
“It is particularly disturbing that nearly six years have passed since the independent forensic audit and Baldwin-Whitehall School District has not put proper policies and procedures in place to prevent another case of fund embezzlement,” DePasquale said. “The Hoover Dam did not take that long to build.”
The audit also noted that the district may have to return $343,061 in tuition payments to the Department of Education because it did not provide adequate documentation for foster children and others placed in the district.
The district also failed to adhere to its own school board policies by not improving or developing policies and procedures to ensure the proper oversight of funds.
The district also violated the Public School Code by permitting a sitting school board member to resign from the board in November 2013 to take a newly created position with the district as supervisor of projects for the board of school directors and special assistant to the superintendent. Under the school code, board members are only permitted to resign their positions to become teachers.
Auditors also noted a lack of internal controls over the use of the district’s procurement cards. The district failed to maintain a list of employees authorized to use the cards; did not require employee usage agreements; did not maintain a log of spending limits and transactions; and failed to track the cards of employees who lost their procurement card privileges because of termination or revocation.
“The recordkeeping for the procurement cards is simply not adequate and could open the door to misuse,” DePasquale said. “For example, while auditors could tell that a purchase was made from Amazon, there was neither a record of what was purchased nor any evidence of approval of the purchase by a district official.”
In a single year, auditors found $45,000 worth of procurement card purchases with little or no documentation for the purchases.
“Every school district, regardless of their financial position, should maintain adequate records and monitor how every tax dollar is spent,” DePasquale said. “My department will be following up on these issues in future audits.”
Auditors noted that high turnover in district management may have contributed to some of the district’s oversight problems. Since July 2008, the district has had two superintendents, four business managers and seven treasurers.
“Maintaining staff stability, following proper policies and procedures, and having solid and accurate recordkeeping is not rocket science,” DePasquale said. “Baldwin-Whitehall School District – the school board and the district management – must get to work now and correct these long-standing problems once and for all so that teachers and students can continue to focus on academics.”
The district disagreed with two of the three findings, but agreed to begin implementing most of the 18 recommendations made in the audit report, including eliminating most of the procurement cards. The district’s responses are included after each finding in the report posted online today.
A copy of the Baldwin-Whitehall School District audit report is available here.
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