Advertisement Audit finds Penn Hills schools in financial crisis, suggests 'dereliction of duties,' case referred to DA Share Shares Copy Link Copy

An audit of the Penn Hills School District shows the district has been "pushed to the edge of a financial cliff" by "long-term lack of oversight," according to Pennsylvania Auditor General Eugene DePasquale, who called the findings "shocking.""At the minimum, it is the height of fiscal mismanagement and irresponsibility. At a minimum," DePasquale said in a news conference at the district's administration building auditorium.It's so bad, DePasquale said, he's referred his findings to the Allegheny County district attorney, the U.S. attorney for western Pennsylvania, the state Revenue Department and the Pennsylvania Ethics Commission for what he called "multiple criminal investigations."TEAM COVERAGE: Watch the reports from Bob Mayo and Sheldon Ingram"Do I personally believe that there's a good chance that crimes have been committed? Yes, but I'm going to leave that to law enforcement to make those final decisions," DePasquale said.He said the audit showed Penn Hills School District's general fund is $18.8 million in the red and its long-term debt "skyrocketed" from $11 million to $167 million in five years, which he described as borrowing with no plan to pay for it. The auditor general characterized what was found as "stunning financial mismanagement" and "illogical business decisions" by those in charge at the time."There was a total breakdown in oversight and management," DePasquale said. "The problems with the district are self-inflicted and could have been avoided."Read: Full report by the auditor general on Penn Hills finances (PDF)"We remain very fragile," said current Superintendent Dr. Nancy Hines, who was hired after the audited period. "We're very thankful that we are able to pay our bills currently and we're able to meet payroll."DePasquale said the district's current superintendent and business manager "know they have a mess on their hands" and "seem very committed" to change and turning things around."We are absolutely not cured. There is no silver bullet for our situation, and we have heard repeatedly from various experts what happened in Penn Hills is completely unprecedented," said Hines, who joined DePasquale at his news conference."I've been telling people and taxpayers in Penn Hills this has been going on for a long time," said Erin Vecchio, a school board member who rejoined the board in January, after serving on and leaving the board years ago.DePasquale also cited "rampant abuse" of nearly two dozen school credit cards that generated $424,000 in charges at taxpayer expense over three years. He said they were used for things like doughnuts, sports equipment, consultants' hotel rooms, and a water heater for someone's home."That is insane. Despite the fact the cards were only to be used for emergency purposes," DePasquale said. He said that, instead of a name, one of the credit cards was marked for use by "anyone in uniform."The auditor general also said the district ran up hundreds of thousands of dollars in excess fuel expenses. He said fuel intended for Penn Hills school buses was used by a contractor to fill up other buses carrying students from other districts and to fuel personal vehicles.The district attorney's office and the U.S. attorneys office will not confirm whether criminal investigations are under way.A spokesman for District Attorney Stephen Zappala said his office and Allegheny County police had received a referral from the Penn Hills superintendent before Wednesday's audit announcement."We were made aware today of the information and conclusions released by the Pennsylvania Auditor General. If that office wants to forward their complete audit along with any evidence that support their conclusions, that information may be of assistance," spokesman Mike Manko said.Full video: Pennsylvania Auditor General addresses audit of Penn Hills School District39608424Refresh this page later for updates. Watch team coverage by @BMayo_WTAE and @SheldonWTAE tonight on Pittsburgh's Action News 4 at 5 p.m.Get the WTAE Pittsburgh's Action News 4 App