NEWS RELEASE
For Immediate Release
Contact: Steve Halvonik 717 787-1381
Audit Text

Auditor General Jack Wagner Audit Finds Harrisburg School District Facing Nearly $7 Million Budget Deficit

HARRISBURG (April 30, 2008) – Auditor General Jack Wagner today released an audit of the Harrisburg School District that identified nine findings concerning deficiencies in the school district’s operations. Wagner said the findings generally fell into the categories of school district budgeting and internal controls over district operations.

“The school district’s failure to address our prior audit recommendations resulted in the failure to provide for a reduction of the general fund deficit and the continued use of unrealistic budgets, which resulted in increased debt obligations, and borrowing to finance current district operations. The district must also strengthen its internal control procedures to improve school district operations,” Wagner said.

The findings were:

1. General Fund Deficit of $2,960,656 as of June 30, 2006
2. Early Childhood Fund Deficit of $3,093,804
3. Athletic Fund Deficit of $944,883
4. Inaccurate Reporting of the Number of Nonpublic Pupils Transported Resulted in Transportation Subsidy Underpayments of $46,970
5. Vehicle Mileage Allowances Appear to Violate Internal Revenue Service Regulations
6. Administrative Wage Errors
7. Failure to Obtain Memorandum of Understanding
8. Unmonitored Vendor System Access and Logical Access Control Weaknesses
9. Weak Internal Controls in Procedures Used to Process Requests for Reimbursement
   

The audit report generally covered the fiscal years ended June 30, 2003 to June 30 2005. Wagner’s audit made 28 recommendations to the school district, the Department of Education and the school district’s Board of Control to correct the deficiencies noted in the audit.

Recommendations included:

• The Board of Control should prepare realistic budgets based on historical data and verifiable revenue projections, and continue to use monthly budget status reports to monitor expenditures
• The Board of Control evaluate the early childhood program to determine if and how the program will continue to operate given the fact that the program has not been self-funded since the 2003-04 school year
• The Board of Control evaluate the athletic program to determine if revenue collection and reporting procedures are adequate, and use monthly status reports to monitor revenue and expenditure activity
• District personnel should prepare a complete list of nonpublic pupils each year that includes the name and bus number of each nonpublic pupil transported
• Department of Education should resolve nonpublic pupils’ transportation subsidy underpayments

A complete copy of Wagner’s report with findings, recommendations, and management responses included, can be accessed at www.auditorgen.state.pa.us.

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the Commonwealth’s elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations. The Department of the Auditor General conducts approximately 5,000 audits per year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department’s Web site at www.auditorgen.state.pa.us.

###