Auditor general releases findings of Reading School District audit

Auditor general releases findings of Reading SD audit

READING, Pa. - Pennsylvania's auditor general traveled to Reading on Friday with a strong message for the Reading School District: "Get your house in order and do it now."

Auditor General Eugene DePasquale released results of his audit of the school district during a news conference outside the state office building in downtown Reading.

The audit, DePasquale said, found significant incidents of noncompliance with state laws and administrative procedures.

"To be direct, the Reading School District has failed. It has failed the children of the city and it has failed the taxpayers," Depasquale said.

Specifically, auditors found that the Reading School District:

- Failed to effectively educate the district's students to achieve targeted graduation and academic performance.

- Failed its core mission to educate children and properly handle taxpayer funds because of ineffective management and school board oversight.

- Failed to maintain a stable upper management (The district had four superintendents since July 2005).

- Failed to have policies and procedures in place to oversee its accounting process, which resulted in the erroneous double recording of the receipt of $15.6 million in basic education funding in 2011; an inability to know what bills were paid or unpaid and multiple budget errors resulting in significant variances that left the district unable to manage its accounts or determine purposes of expenditures.

- Failed to have proper password update procedures in place to prevent unauthorized access to sensitive computer files.

- Failed to obtain timely updates of an agreement with pertinent police departments regarding jurisdiction over procedures to be followed in case of an incident on school property.

- Failed to properly monitor professional employee certifications, which may result in possible state subsidy forfeiture.

"I want to make it clear -- these problems are not the fault of students or teachers," DePasquale said. "The responsibility for this debacle lies squarely upon the shoulders of the school board and many in the administration."

DePasquale unveiled a list of six recommended policy and procedural changes for the school district to make in an effort to resolve the issues uncovered by the audit.

- Complete and institute an action plan to ensure that schools have adequate resources and procedures in place to enable students to meet academic goals and graduation rates.

- Immediately prepare and adopt accounting and documentation procedures for reconciling cash receipts and revenue accounts.

- Hold management accountable for properly implementing the school board's policies and regularly monitor management's performance while the school board encourages and supports the stability of the management team.

- Implement security controls for the district's computer records, including student and other sensitive information.

- Update on a timely basis all agreements with law enforcement and first-responder organizations to ensure a coordinated and effective response to any safety emergencies.

DePasquale said his auditing team will stay on top of the district and return to Reading in six months to make sure corrective actions have been made.

"The situation is shameful and unfortunate, but action is needed now," DePasquale said. "It will not be turned around immediately, and I'm sure even with every effort and everyone doing everything, it will take time, but the kids of this district, the job growth of this district, the health of this district and the future economy of Berks County depend on this happening now."

Pa. Sen. Judy Schwank and Reps. Tom Caltagirone and Mark Rozzi, who stood by the auditor general's side during the news conference, sent a letter to DePasquale in January, asking him to take a close look at the district's finances.

In the letter, they cited the $15 million "accounting shortfall" as being the latest in "a series of disturbing problems that have plagued the district."

The lawmakers spoke out again Friday in response to DePasquale releasing his report.

"Unfortunately, mismanagement continues to be as much a part of the Reading School District as reading, writing and arithmetic," said Caltagirone. "Our kids – the students who walk the halls of every Reading School District elementary, middle, intermediate unit, and high school – must return to be the central focus of how this district performs beginning today."

"The fact that the auditor general, who is Pennsylvania's independent watchdog, is pointing to the further evidence of insufficient governance policies is more evidence that the Reading School District needs to get its act together and the board needs to get down to working for the best interests of the children," Schwank said.

The lawmakers cited a January 2012 report by then-Auditor General Jack Wagner, which found that 14 of the district's teachers had been working with improper certification; the district did not properly account or retain records for grant receipts and expenditures; and weaknesses in vendor computer databases could allow for unauthorized changes that could not be tracked.

The Reading School District superintendent, Carlida Purcell, released a statement in response to the auditor general's findings.

"The auditor's report is certainly not good news, however, we continue to be committed to leading change, leading learning and transforming our district for students success," Purcell said. "It will take a lot of hard work, but it is crucial that we develop a real sense of teamwork and governance for the sake of our students."

The Reading Education Association, the union that represents the district's nearly 1,200 teachers, also responded to the auditor general's findings on Friday.

"We have repeatedly proclaimed that, while teachers must be held accountable for student success, those who make policies and decisions affecting our schools must also be held accountable for providing the resources necessary to attain that success," said Bryan Sanguinito, president, REA.

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