Despite the mounting fiscal challenges faced by city schools, the School District of Philadelphia is doing a lousy job at keeping track of the meager resources it does have, according to an audit released Wednesday by the office of City Controller Alan Butkovitz.
The Internal Control and Compliance review of fiscal year 2012 found a staggering 67 percent of School District inventory auditors selected for review could not be located.
Eleven schools were missing $196,000 worth of items ranging from computers, cameras and musical instruments to snow blowers, air conditioners and medical equipment, according to the report.
“These findings suggest the district is not properly safeguarding and accounting for its $272.6 million furniture and equipment inventory,” Butkovitz said in a statement.
“There appears to be a clear breakdown in the district’s procedures over its inventory, which reduced the ability to locate sampled property.”
At the new West Philadelphia High School, for example, auditors found numerous items went missing within a year, including $5,150 in musical instruments; $3,000 worth of office furniture; an Apple iMac computer valued at $1,379 and a $945 snow blower.
Staffers found in the case of three city schools – the High School of the Future, Baldi Middle School and Frances E. Willard Elementary – multiple laptops, a desktop computer and a sewing machine were all taken from the premises and relocated to the homes of school personnel without the required documentation or authorization.
Butkovitz said inventory oversights also resulted from the failure of district employees to maintain adequate records of what happened to equipment left in old school facilities and from a new computerized inventory system that doesn’t provide for sufficient accountability over deleted supplies.
“Allowing undocumented deletions of equipment in the inventory database increases the chance for thefts to occur,” Butkovitz said.
“All required approvals must be met before staff removes any piece of equipment.”
The audit further revealed School District of Philadelphia accountants failed to detect in a timely manner $66 million of errors in cash and investment accounts, causing them to be at risk of misstating the fund’s liabilities and overestimating the district’s assets.
“It is important that the district implement strong internal controls and reconcile the cash and investment accounts preferably on a monthly basis,” Butkovitz said.
Finally, of the $20,700 in petty cash and student activity funds sampled from six city schools, auditors found a shortage of more than $14,000 – nearly 70 percent of the money was unaccounted for.
“The district needs to monitor and enforce policies over the handling of petty cash to ensure the cash is spent appropriately and efficiently,” Butkovitz said.
“Management needs to request that responsible school personnel reimburse the district for the shortages if documentation cannot be produced to account for the negative balances.”
Butkovitz also identified several problems with the handling of the $5 million in student activity funds, including undocumented expenditures, activities with account balances that were inactive or negative, and long outstanding deposits that were still pending and “appeared questionable.”
“The district manual requires that student activity funds for educational purposes benefiting the students,” Butkovitz said.
“With the school district facing diminishing resources, student activity funds become more integral to the function of activities in the schools.”