The Internal Revenue Service is conducting an audit of the Philadelphia School District, officials have confirmed.
District officials said that IRS auditors told them during a May 24 visit that the audit, centered around 28 points of inquiry, is routine. “It is not a criminal or civil investigation,” the district said in a statement. “We intend to fully comply and answer each of the items.”
“This is a routine check,” district spokeswoman Jamilah Fraser said of the audit. “Our district is subject to auditing by many different agencies.”
An IRS spokesman, citing federal disclosure laws, declined comment.
The Philadelphia Inquirer, citing IRS documents, said the agency seeks information on reimbursements for travel and meals, use of district cars and credit cards, and “checking account data for payments that are processed outside the district’s general fund” during calendar year 2009.
The newspaper, quoting sources, said the IRS broadened its investigation to include expense reimbursements to members of the School Reform Commission, a five-member board appointed by the governor and mayor to oversee the district, whose annual budget is around $3.1 billion. The district, however, said in its statement that the inquiry did not contain questions about commission members.
Payroll director Eileen Pelzer was fired last week, according to the newspaper, which said senior officials in the district were upset over the expanding scope of the investigation, of which they knew little. The district said it does not discuss personnel matters.
Fraser said the IRS visited the same day that superintendent Arlene Ackerman and her administrative team spoke on the first day of budget hearings before the City Council. The school district is seeking additional funding to help cover a projected $620 million budget gap.
City Controller Alan Butkovitz, meanwhile, wants more oversight from his office and input from the city’s finance director over the district’s finances.
Butkovitz also wants the school district to present a five-year plan to an independent authority, such as the Pennsylvania Intergovernmental Cooperation Authority, for approval.
In an audit released Wednesday, Butkovitz cited “serious financial deficiencies,” which included a $15.3 million food-service loan that had no payback documentation, and a $42 million period adjustment from a bond swap that was improperly recorded in the books.
