Parking Authority mismanagement cost Philadelphia schools

Mismanagement at the Philadelphia Parking Authority cost the city’s school district nearly $78 million over the past five years, according to Pennsylvania auditor general Eugene DePasquale.

An audit released last week by DePasquale's office said that the Philadelphia School District was denied around $77.9 million in revenue from 2012 to 2017 due to uncollected parking fines, payroll errors, questionable employee expenses and excessive salaries. A separate audit from DePasquale cited the parking authority’s board for failure to oversee conduct of its former executive director in allowing him to mismanage operations and engage in sexual harassment.

“It is clear from my audits that the PPA Board of Directors was like an absentee landlord when it comes to managing the day-to-day operations of the PPA and failed to oversee the activities of the former executive director,” said DePasquale. "The authority needs a complete overhaul and a restructuring because the more efficient it becomes, the more funding will go to the school district and city.”

DePasquale launched his year-long probe into the PPA in October 2016 following the resignation of executive director Vincent Fenerty, who was accused of multiple sexual harassment allegations. The audits don’t cite Fenerty by name, but DePasquale referred to the agency’s former leader as an “unchecked tyrant” who was able to manipulate leave records and neglect employee training. He also said the PPA board “went to great lengths” in keeping Fenerty even after a June 2015 sexual harassment complaint against him.

The bulk of funds the school district potentially missed out on stem from the district’s $76.8 million share of $107,929,542 in uncollected parking fines and fees between 2012 and 2017. Auditors noted that since 1990, PPA has failed to collect more than $580 million in outstanding parking tickets and associated fees.

“All outstanding revenue PPA does not collect is funding lost to the school district and the city,” DePasquale noted. “Every effort should be made to collect unpaid ticket revenue to increase the amount that can be used to educate students in the district.

The junk-rated Philadelphia School District has been governed for 16 years by the School Reform Commission, a state-devised board that voted on Nov. 16 to dissolve itself in a move toward returning to a mayor-appointed school board by July 1, 2018. Pennsylvania’s largest school district lacks its own taxing authority and receives all of its funding from the state and city.

The audit results led to DePasquale and Gov. Tom Wolf calling for the Pennsylvania General Assembly to give control of the PPA from the state to the City of Philadelphia. Wolf described the PPA as “an over-bloated patronage pit” in its nearly two decades of state control.

A majority of parking board members are appointed by the state governor.

“The findings of the Auditor General’s audit are disturbing and display a culture that runs afoul of good government and basic decency,” said Wolf in a statement. “I urge the General Assembly to swiftly abolish state control of the authority and return the functions of the PPA to the citizens and local government of Philadelphia.”

Moody's Investors Service affirmed its A1 rating on the parking authority’s $120 million of outstanding series 2008 and 2009 airport parking revenue refunding bonds in December 2016. Fitch Ratings rates the PPA bonds at A-minus.

The PPA board of directors responded to DePasquale’s findings in a statement saying they have already addressed 80% of 117 recommendations the office made to improve the authority’s future practices.

“Over the past 15 months the Philadelphia Parking Authority has adopted and implemented many measures to improve the governance and efficiency of the agency,” the statement said. “We will continue to strengthen this organization and make certain that we provide the highest level of service to Philadelphia’s residents, businesses and tourists.”