The Harrisburg school district issued a substantial budget revision late on Tuesday, stating that the previous administration mismanaged the district’s finances and drastically overstated revenue.
According to Acting Superintendent John George, the district’s 2019-20 budget has been revised downward to $152.1 million, nearly $6.7 million less than the approved budget, which was finalized in June.
The new budget yields a $2.6 million shortfall for the year.
“One of the first steps in returning educational prosperity to this school district is to stabilize our finances and ensure we are spending and accounting for funds appropriately,” George said, in a statement. “The amount of errors and mismanagement we have uncovered is egregious and truly unfair to the students, staff and taxpayers of this school district.”
Much of the shortfall—$5.1 million—is due to the prior administration overestimating state revenue that the district would receive, according to the district.
Soon after receivership began in June, the district’s new administrative team began to piece together the district’s finances. At the time George, appointed to his post by Receiver Janet Samuels, told TheBurg that the district’s finances were fragmented and in disarray.
The findings released on Tuesday are the result of four months of “painstakingly pouring through Harrisburg’s financial records and systems,” according to the district.
Other findings include a $1.9 million underestimation of tuition payments to charter schools and payments to “ineligible employees.”
The district also lost $2.8 million over the past two years in federal School Improvement Grant funding at John Harris High School, a program designed to help failing students get back on track. The district didn’t properly administer the program, and didn’t provide documentation to the government of how funds were spent, according to a school district statement.
George stated that the district is implementing “a number of financial strategies” to save money for the remainder of the school year. These include:
- refinancing debt with lower-interest loans
- reviewing medical benefits contracts
- recommitting to the sale of dormant assets, such as William Penn High School and Woodward Elementary
- pursuing new grants and other non-traditional revenue sources
- lowering charter school costs
“Truly, every financial aspect of this school district will continue to be analyzed,” George said. “We will examine contracts with major service providers such as Aramark and our energy management providers. We’ll also be digging into the district’s outstanding legal matters that may have some major financial implications.”
George said that the district already has begun to put in place procedures and training to improve business practices, approval processes and other financial checks.
The district has also established a fraud reporting hotline. Tipsters should call 717-703-4135 or email email@example.com.