Finance

Harrisburg colleges aren’t broke, however the monetary state of affairs is unhealthy – PennLive

Harrisburg School District is not broke. In fact, there is even a few million dollars in his reserve account.

Still, there's not much room for error, the district's new administration announced at a budget presentation Tuesday evening, blaming its predecessors for gross mismanagement, poor bookkeeping, and the seemingly reckless approval of contracts.

It is mismanagement that they said the district faced financial hardship while costing millions in federal funds.

"I think it's better than expected," said Acting Superintendent John George.

That was the message from George and his team on Tuesday night as they tabled a revised budget for 2019-20 that was drawn up in the four and a half months since their appointment. Her appointment came after a court-ordered state takeover of the district requested by State Education Minister Pedro Rivera amid years of financial and academic underperformance.

It was a message that included a plan to improve the district's finances in the future, as well as creating a system for members of the community to report suspected fraud.

"It was never our goal to determine if there was fraud or not. That is the job of law enforcement," said George, before admitting that he could not deny that members of the previous administration had "abnormal business practices."

The district court order began on June 17 and Janet Samuels was named to the recipient role. From that date on, Samuels had little time to prepare a budget until June 30, by which time it would have to be submitted to the State Department of Education. In order to meet this deadline, it had to approve a budget that was drawn up by the former government under the direction of the then Superintendent Sybil Knight-Burney and the then acting manager Bilal Hasan. You've both been fired since then.

It was a 2019-20 budget that George called "illusionary" – a term he used because the numbers in the spending plan could not be verified. George and his new leadership team from the Montgomery County Intermediate Unit arrived in the Harrisburg borough and found that headquarters were missing critical financial records.

"We haven't been able to document, verify, or justify how they derived the numbers that they budgeted," he said.

That meant the new heads of state and government had to create an accurate, updated budget from scratch, working meticulously to create it line by line while trying to get a real understanding of where the district was financially was standing. Tuesday's presentation was the culmination of that work, George said, calling it "a very important date for the Harrisburg School District".

The new leaders found that the previous administration's numbers were indeed wrong, and if the three-year state takeover had not been ordered, continued mismanagement could have resulted in financial ruin, George said.

"I think the district would have passed the point of no return," said George.

The new budget, tabled Tuesday evening, provides for revenue of $ 149.5 million for the 2019-20 school year, with total expenses totaling $ 152.1 million.

That's about $ 6.7 million less than expected by the previous government, which, among other things, failed to properly account for about $ 1.9 million in payments the district is required to make to charter schools in the area.

And that spending was only compounded because the previous government was unable to comply with accounting rules, which cost them about $ 2.9 million in federal grants to help, according to Sandy Edling, the district's new chief financial officer that local students fail.

Edling said she was unsure if or when the district would qualify for this funding again.

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New admins were also able to find areas where they could save, especially Tuesday by eliminating salary and benefit costs for employees who worked in the district even though they weren't legally entitled to do so.

However, the revised budget for 2019-20 includes a deficit of around $ 2.6 million – a slight decrease from the previously forecast $ 3.1 million.

In the future, avoiding deficit budgets will be paramount, Edling said. This is especially true due to the district's dwindling fund assets, she said.

The district currently has a reserve of approximately $ 16.2 million, of which only $ 5 million is not earmarked for future expenses.

This needs to be taken into account as new administrators continue to grapple with annual debt service payments of approximately $ 20 million, as well as new expenses such as the likely addition of a citywide stormwater charge that is expected to cost the district about $ 163,414 a year, said officials.

"This district has a lot more debt than we normally expect," said George.

And these administrators already have a rough plan for further development, which was highlighted at the presentation of the budget by Assistant Superintendent Chris Celmer and later in a press release. The main points of this plan are reproduced below, according to district officials:

Refinancing debt by taking advantage of historically low interest ratesReview medical service contracts and seek appropriate counseling servicesReview sales of existing assets including the former Woodward Elementary site and William Penn High SchoolAddress the rising costs of special education per studentTrack new grants and non-traditional sources of incomeMainly, fix charter school costs by bringing students back to programs run by the Harrisburg School District

This doesn't just apply to negotiating union contracts and addressing outstanding legal issues, including at least some high profile fraud cases.

Sedentary Administrators have also put in place a new system that allows members of the community, including district staff, to anonymously report suspected fraud by calling a hotline at 717-703-4135 or emailing fraud@hbgsd.us.

"When you see something, say something," said Edling.

Since the takeover in June, the new administration has made it a top priority to put the district's finances in order, especially as income and expenses dictate day-to-day operations. Once an accurate budget has been established, special attention can be paid to addressing other problem areas, namely developing and implementing a new nationwide curriculum, George said.

At the end of the presentation, Samuels thanked her leadership team and indicated that their job is not easy.

“The day has no end. That's seven days a week, all weekend, "she said." The work is to be welcomed. "

Samuels said she would likely approve the updated budget at her next public business meeting at 6 p.m. Monday.

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