The Harrisburg School District is blocking efforts by the Pennsylvania Department of Education to audit the district's finances by denying access to financial information. This emerges from a letter from the department that PennLive received on Friday.
The State Department announced the audit in October after a series of financial scandals in the district. These financial troubles include a transportation officer accused of embezzling US $ 180,000, transferring 37 teachers to non-budgeted positions, and maintaining health coverage for 54 employees who left the district in recent years.
The audit should examine, among other things, the district's accounting practices, budget projections, and internal controls. The district is viewed by the state as in financial distress.
In a March 27 letter to Harrisburg Superintendent Sybil Knight-Burney, Pennsylvania Secretary of Education Pedro Rivera wrote that the district must provide all information necessary to "promptly investigate the district financial records."
As of Friday, more than two weeks after this letter was posted, the state's accountants had not been given access to the financial records they need to "perform the essential functions of the exam," according to the Education Department.
District officials told PennLive late Friday afternoon that they had passed the exam but simply refused to allow unrestricted access to their “confidential e-financial system” because it contains “sensitive employee information (e.g. bank sort codes, social security numbers, etc.). )
"The district believes this request is beyond its legal obligation," said Bilal Hasan, the district's interim business manager, in an e-mail response to PennLive's questions.
The Wessel & Company review was due to begin last month. However, the effort soon came up against a wall when Hasan denied access to the district's electronic financial system, according to the education department's letter. PennLive received the letter from Education Friday after filing a request for information.
"In order to obtain the necessary information, the accounting firm applied for access to the district's eFinance system," said Rivera's letter. "Unfortunately, the interim business administrator for the district denied the request."
This is what Hasan told the auditors on March 18, according to the PDE letter:
"I have spoken to our legal advisor about whether your request constitutes a legal obligation or duty on our part and he has given me no indication," Hasan wrote. "If your company can determine a legal or regulatory basis on which to comply with the request, we will review it again."
In the state letter to the district dated March 27, Rivera noted that the education department had already provided a legal basis for requesting financial documents from the district.
"You were previously notified that Section 2410 of the 1949 Public Schools Act allows the Minister of Education to examine a school district's financial records in person or by his agent," the letter said. "In addition, under Article XXIV of the School Code, the district is legally obliged to provide the items required for an exam."
The Education Department's investigative agency includes the authority to "issue subpoenas to compel the presence of school officials or anyone they deem necessary to witness and to compel the production of all books, records, coupons, letters and papers". Rivera wrote.
But Hasan told PennLive that the references to state law in Rivera's letter did not directly address this particular situation with electronic access.
"Even Secretary Rivera's letter confirms our belief that the district has an obligation to provide information to auditors, but is silent on any legal basis that the district must provide access to its confidential electronic financial system," he said. “The district has asked the auditors to provide a legal basis authorizing or requiring them to comply with this specific request. The district has not yet received a response from the auditors and is seeking advice from our lawyer. "
The refusal to provide the original financial data is part of a separate Education Department investigation into "compliance issues" under the Harrisburg Federal School Improvement Grant program. The state put some federal funds on hold last month until it can review and approve how the Harrisburg School District has used the money.
The state also sent a letter to the district last year stating that Hasan does not have the qualifications to serve as the executive director of Harrisburg and that the district must hire a full-time chief financial officer. But 10 months later the district has neither hired a new director nor filled the long vacant position as CFO.
The state exam is the first of its kind under the direction of Governor Tom Wolf, according to Eric Levis, a spokesman for the education department.
"We were not notified"
Several school officials did not receive a copy of the letter until Chief Recovery Officer Janet Samuels emailed it to them Friday, about two hours before the letter was forwarded to PennLive by Education. School board members should oversee operations and approve the school district budget.
"We were not informed of the request in October," said board member Carrie Fowler, "and we did not know that our office refused to honor the request." We got from Dr. Janet Samuels found out about it. "
It was unclear who gave Hasan legal advice, that he did not have to meet the auditor's requirements, or how much that legal advice would cost the district on an hourly basis. Hasan did not address these questions in his response to PennLive.
"As a convalescent district, we shouldn't hide our ledger or a functioning operation from the PDE," said Harrisburg-based Doug Thompson-Leader, who is applying for a position on the school board. "Instead of preventing the PDE from helping." Our district, our interim business manager, should submit the first draft of our budget to the state rather than impose fines as it looks like we are pretty late. "
Thompson-Leader was referring to the fact that school districts should submit draft budgets by January 31st for approval by the school board, but Harrisburg has not yet done so.
Jayne Buchwach, a member of a community group called CATCH, said the school district needs a high level of transparency and accountability.
"The Harrisburg School District Administration's refusal to comply with a government agency policy is inconsiderate and suspicious," said Buchwach, who is also running for a seat on the school board. “Harrisburg has acted in secrecy and total deception for far too long. It can no longer do this and expect nothing other than mistrust and condemnation from citizens who demand better. "
Editor's Note: This article has been updated with comments from Bilal Hasan.