Pa. auditor general to close school audit bureau, says it’s a way to ‘maximize our resources’

About 40 employees who handle school audits at the state Department of Auditor General’s office were told Wednesday their jobs are being eliminated on April 22.

The auditor general is transferring the responsibility for conducting these audits back to the state Department of Education where it rested until about 30 years ago.

“There are several factors that led to this decision but as we looked carefully at the work of our department one thing has become clear – we need our auditors to focus on the work we are required by law to perform,” said Auditor General Timothy DeFoor in a statement.

An attempt to get a comment from the education department about this new responsibility it will be absorbing was not immediately successful.

The auditor general plans to transfer six of the soon-to-be displaced school audit bureau employees to other bureaus in the department. The rest of them will be encouraged to apply for other open positions within the agency, said April Hutcheson, a department spokeswoman.

Department officials attributed the years of budget cuts that took its funding back to 1997 levels with less than half the staff as it had back then as the driving factors behind this decision. In 2013, the school audit bureau alone had 120 auditors, or about three times the number it has today.

What’s more, the staffing challenges have lengthened the time between school audits from the desired three years to the current five years. If the department were to continue performing them with its current staffing level, Hutcheson said that audit cycle would have been extended to at least seven years.

Andrew Armagost, director of advocacy and analytics at the Pennsylvania Association of School Business Officials, admits seven years is a long period between audit cycles. Any information gleaned from those audits might be outdated by the time it is received.

His reaction to the news of this transfer of audit responsibilities was one of uncertainty.

“We are unsure how this will play out and what all needs to happen,” Armagost said.

The types of audits being transferred back to the education department look at whether schools performed the required number of fire drills, checked teacher certification and made sure districts were properly reimbursed by the state for transportation costs, Hutcheson said.

“These were not fiscal audits of a school district,” she said. “School boards hire independent CPA firms to do those independent fiscal audits to make sure that the money that people are paying to the school district in taxes is being properly accounted for.”

Armagost said school districts are required by law to conduct those types of financial audits annually and suggested that perhaps the education department, which also is understaffed, can use those audits to implement this shift.

“I don’t think the auditor general is shirking himself completely from acting as the independent fiscal watchdog but rather reallocating time and focus,” Armagost said. “However, it’s an opportunity for [the school business officials organization] to work with PDE to improve financial procedures and policies that protect taxpayers and streamline processes efficiently and effectively.”

Hutcheson said the auditor general will still audit specific activities of school districts such as the real-time fiscal review completed last year on the business operations of the Harrisburg School District. The auditor also last month notified 12 school districts of its plans to conduct performance audits for their compliance with the laws pertaining to district fund balances.

Hutcheson said the auditor general’s office took over the school audits decades ago at the education department’s request. Over the years, the department added more criteria to be audited.

“This is work that is the responsibility of the Department of Education and so we are hopeful that the department will take it as seriously as we did,” she said. “While we were able to do the work, we tried to work with the Department of Education and figure out ways that we could continue to do it, but it’s just not feasible.”

Since DeFoor took office, he has been looking at transforming and modernizing the department and its auditing practices.

“This really fits into that transformation initiative as well,” Hutcheson said. “This is really a change in how we can serve Pennsylvanians and be able to look at issues, especially issues like things that are happening in school districts. It’s a change in approach. It’s a way to maximize our resources in a time when we are still trying to get our budget restored and rebuild our workforce.”

Jan Murphy may be reached at [email protected]. Follow her on Twitter at @JanMurphy.

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