Auditor general faults Philly schools, SRC for lax management

The Philadelphia School District has failed to conduct background checks of all of its police officers and bus drivers, uses unreliable student-data technology, and is the victim of a "broken" state funding system, according to a performance audit released Wednesday by state Auditor General Eugene DePasquale.

In addition to those key findings, DePasquale pointed out two other faults: He called the district's accounting system for unused textbooks after dozens of school closings in 2013 "inexcusable," and pointed out that the School Reform Commission had not conducted timely performance evaluations of Superintendent William R. Hite Jr.

"Financially, the whole system for funding the Philadelphia School District is broken," DePasquale said at a news conference attended by Hite at School District headquarters.

"Many, but not all, of the financial issues are beyond the district's ability to resolve on its own," he said. "What's needed is an all-hands-on-deck commitment from local, state, and federal leaders to work with the district to develop solutions to address its financial challenges."

The structural deficit will never be solved unless the legislature changes the way schools are funded, the report found, because the School District faces rising costs for things it cannot control, such as charter schools and pensions, while lacking the power to raise taxes to increase revenue.

"We have expenditures that are forecast to grow at 4.5 percent against revenues that are growing at 2.2 percent. That's the definition of broken," Hite, who also participated in the news conference, told reporters.

The review of district operations from July 1, 2008, through June 30, 2014, was launched to determine whether taxpayer funds had been used appropriately.

"Our audit found significant instances of failing to apply best practices and noncompliance" with state laws, regulations, contracts, and procedures, the report said.

DePasquale's office found that 21 bus drivers in a sample of 49 (43 percent) whose records were reviewed failed to meet at least one employment requirement, such as state or federal criminal history and child-abuse clearances.

"Even more alarming . . . is the fact that we found two of those 49 bus drivers have preemployment convictions that should have precluded them from ever coming into contact with children," he said.

The district has about 1,1000 drivers, all of whom are employed by either the district or its contractors - and all of whom have to pass background checks. The district said it would have all drivers properly screened by the end of June.

The audit found similar issues with the school police force: 16 officers in a sample of 33 (48 percent) had deficiencies in their background checks, he said.

"School police officers, especially those in a district the size of this district, we believe must be properly qualified with the enormous responsibility that they have," DePasquale said.

The district said all officers in the 340-member department would be screened by the end of June.

The district's outdated technology used to track student enrollment could be costing the cash-strapped system money, the auditor general said.

"Why is that a problem? That is how you dictate funding from Harrisburg," he said. "If you don't have the proper data, you're not going to get the proper reimbursement from the state."

Hite said the audit process "helped illuminate issues that we need to be more attentive to, and some places where we had already begun to address some of the challenges."

He noted that the information system used for student data collection was recently updated, that 97 percent of the School District's 14,000 employees now have completed background checks, and that those without completed checks are receiving them.

Some of the most scathing language in the 83-page document centered on what happened to thousands of textbooks, library books, and educational materials after the district closed 23 schools in June 2013.

The auditor general said books and materials were sent to district headquarters on North Broad Street and to Bok Technical High School in South Philadelphia, which had closed.

The district did not have an automated inventory system, and the methods it used to try to keep track of books was inaccurate or incomplete, the report said.

During the 2013-14 academic year, principals were given lists of available textbooks, but the district lacked staff to keep track of the books that were distributed to them.

As a result, thousands of books remained unclaimed at Bok for two years even as the district ordered new ones, DePasquale said. And many of the books at Bok had to be thrown out due to water damage and mold because the roof leaked.

After newspaper accounts described the textbook surplus in 2015, the district used a nonprofit to move the books from Bok to district headquarters, hired a recycling company to help, and bought 14 refurbished book scanners to make an accurate inventory. As of last August, the district had spent $109,000 to deal with the textbooks, the report said.

The auditor general applauded the improvements.

DePasquale also criticized the SRC for not establishing criteria so it could evaluate in a timely way Hite's performance, as was called for in the contract when he was hired in July 2012. The evaluations took place but were delayed.

Despite the critical findings, DePasquale, a Democrat who took office in 2013, pledged to help improve the city's schools, which he characterized as vital to the health of the state.

"If Philadelphia suffers," he said, "the entire state will suffer. That's just a reality. So, myself and my team stand here ready to help the superintendent and his very talented team to do whatever we can to help to right the ship."

martha.woodall@phillynews.com215-854-2789@marwooda