DeLuca, DePasquale unveil school district financial reform measures

Bill package drafted in response to Penn Hills School District’s financial crisis

HARRISBURG, April 17 – State Rep. Tony DeLuca, D-Allegheny, accompanied by state Auditor General Eugene DePasquale, today unveiled a comprehensive bill package geared toward steering commonwealth school districts away from future financial mishaps, such as the financial crisis that landed Penn Hills School District on state-mandated financial oversight.

The proposed bills, coined the “School Board and Administration Financial Reform Package,” was presented Wednesday during a Capitol news conference. The legislative package was crafted at the request of the Allegheny County Grand Jury that investigated the Penn Hills School District finances.

“What took place in Penn Hills School District quite simply could be described as a complete disregard to taxpayers, the community and its students. I’m disgusted and downright disappointed that a once-renowned school district could dig itself into such a financial hole that its only option was to ask its taxpayers to bail them out,” DeLuca said.

“The bill package presented today would guarantee that the financial disaster that took place in Penn Hills will never happen again, so long as we can get these good-government bills voted on and enacted into law. It’s my hope that my colleagues – on both sides of the aisle – see the importance of moving these legislative measures through the House.”

The bills, which have yet to be formally introduced in the House, would:

  1. Require a referendum for any borrowing by a school district which would amount to 50 percent or more of its borrowing base limit.
    • This calculation is spelled out in 22 PA Code 731.2
  2. Make sure that both revenues and expenditures are included when determining a school district’s borrowing base limit. Currently, only revenues are considered in these calculations.
    • This calculation is spelled out in 22 PA Code 731.2
  3. Allow the state Department of Education to review the most recent audit of the school district to certify it is capable of fulfilling its financial obligations before borrowing funds. If the district is borrowing funds for school building construction, the audit must be made available for the public hearing required by current law.
  4. Allow the state Department of Education to review construction plans and total costs to see if a referendum is required under current law.
    • The referendum is triggered if the maximum building construction cost authorization exceeds the aggregate building expenditure.
  5. Change the five-year statute of limitations for Ethics Act violations to start at the time of the discovery of the violation, rather than when the violation originally occurred.
  6. Hold school district and school board officials accountable if they make false communications to the state Department of Education regarding construction plans or costs. District officials could be subject to second- or third-degree misdemeanor charges.
    • Title 18 – Chapter 49, regarding Falsification and Intimidation.

For more information regarding the “School Board and Administration Financial Reform Package,” please feel free to contact DeLuca’s Harrisburg office at 717-783-1011.