The list of mistakes by the Harrisburg School District in recent years is long.
The district:
- Hired dozens of teachers at the wrong pay levels.
- Employed teachers without valid certifications.
- Paid for continued health care for 54 employees for years after they left the district.
- Hired outside consultants at an alarming rate.
- Lacked basic human resource records.
- Logged timesheets for federal spending on paperwork that disappeared.
- Claimed to have increased teacher salaries by nearly $16 million over three years when staffing and experience levels had declined and there were only small raises.
- Claimed to have spent $10 million on capital improvements in recent years in addition to general maintenance, even though the condition of district buildings remained dreadful.
All of this happened while the district was under the oversight of the Pennsylvania Department of Education. The district has had a state-appointed chief recovery officer since late 2012. The state also brought in a financial consultant to assist the district’s struggling business office in 2012. Outside local auditors reviewed financial statements each year and flagged problems that received little, if any, publicity.
In the end, it was the teachers’ union that unearthed and exposed the mistakes and scandals. The union used old-fashioned sleuthing and the district’s own numbers to expose a series of problems at board meetings or news conferences that grabbed the public’s attention.
“We were telling the state department of education ‘This is wrong,’” said Carolyn Funkhouser, the UniServ Representative with the state teachers union who represented Harrisburg teachers. “It doesn’t add up. There is something very wrong.”
Earlier this year, after district officials refused to cooperate with state auditors, the state petitioned a judge to appoint a receiver to run the troubled district. Since then, the teachers’ concerns have been confirmed by the district’s new leaders.
John George, the district’s new financial recovery plan service director, called the budget created by the prior administration “illusionary,” and said he has no faith in the numbers. His team is working to rebuild proper accounting records to determine the district’s actual financial position.
He’s doing so without the benefit of key financial documents. Computers and public documents, including all files related to federal programs, disappeared amid the mass firing of former district leaders, adding to concerns about how the district was spending millions of dollars in recent years.
Meanwhile, some residents are asking: What took the Pennsylvania Department of Education so long to intervene? How could they let things get this bad under their watch?
The district lacked a full-time chief financial officer since 2015 and churned through seven business managers under Superintendent Sybil Knight-Burney. She let the last one go in 2017, which left the district without a qualified business manager since then. All the while, the district’s financial and academic performance continued to deteriorate.
The district’s original recovery plan called for “external management” by the end of the 2015-16 school year if adequate progress wasn’t met in finances and academics. But that trigger didn’t get pulled for three more years, allowing additional questionable spending and keeping thousands of students mired in chaos.
“As far as PDE, they knew for years the problems that existed in the Harrisburg School District,” said School Board Member Ellis Roy. “Instead of putting this district into receivership two years ago, they kept trying to see if the Recovery Plan was going to work. How’d that work for them? It didn’t… PDE should have seen this sooner. There’s an old saying, ‘When you find yourself in a hole, stop digging!’ What was PDE going to do, allow the Harrisburg School District to do, dig its all the way to China?”
For his part, Roy said he felt deceived by district leaders.
“According to what’s being discovered, we were being hopelessly misled, especially about the inner workings of the administration,” he said “We were being manipulated, and that’s sad, because we trusted them to tell us the truth.”
Carolyn Funkhouser (front row, second from right) poses with Harrisburg teachers at a school board meeting.
Finding the Truth
Funkhouser said she began having serious questions about the district’s finances almost immediately after she started representing Harrisburg in 2013.
Teachers had just agreed to a 5-percent pay cut because the district supposedly was facing a large deficit, but then it was revealed the district actually was sitting on a $22-million surplus. The teachers had to fight for years to get their money back.
Then transparency issues arose. Funkhouser said they would watch as board members voted on personnel actions that were presented inaccurately.
“The whole board was not getting the whole truth, but the vote would go through regardless,” she said. “I’ve never seen a school district work that way.”
Teachers were relaying concerns about nepotism and a clique of favored employees.
“They were pretty serious allegations so the last thing we wanted to do was accuse someone of something without evidence,” Funkhouser said.
So Funkhouser started looking for evidence. She noticed a shocking number of outside contracts being approved for work that seemingly could be done by in-house employees. She created a binder full of contracts in 2017 and sent it to the state education department with a cover letter noting how unusual this was.
Other red flags appeared. Some teachers’ paychecks indicated they were being reimbursed by federal School Improvement Grants when they hadn’t done any grant-related work, Funkhouser said. Timesheets for federal programs was completed on paper instead of electronically and the paper trail was not always retained, she said.
When it was time for teachers to bargain for a new contract in 2017, Funkhouser requested all the data she could think of, and combed through every single digit to be on solid ground.
That’s when she unearthed additional scandals, including over-hiring of 37 employees for un-budgeted positions and healthcare being provided to dozens of employees long after they had left the district. The district also claimed $16 million in teacher salary increases over three years when her records showed the cumulative amount should be closer to $6 million.
Because of the level of work involved in getting closer to the truth, Funkhouser wasn’t as critical as some people on the state department of education.
“Based off of recent events and preliminary information from different sources, including the audits of the district, I don’t believe PDE knew just how tragic the situation at the Harrisburg School District had become,” she said. "For whatever the reason, whether it was incompetence or willfulness or a combination of both, the information PDE was receiving was not accurate, nor was it the whole picture.”
Cat-and-Mouse Game
Audrey Utley, who served as the district’s chief recovery officer from 2015 to 2018, said she detected no urgency on the part of district leaders to meet the goals in the recovery plan.
The district was a revolving door for employees and school board members, she said. In all, there were 25 different members who cycled through the school board during her tenure resulting in shifting, spotty oversight.
There were no established processes or policies. District leaders didn’t like to put anything in writing, Utley said.
“When you don’t have anything in writing,” she said, “then you have the freedom to do whatever you want.”
Board members also didn’t make the tough decisions, she said. Instead of raising taxes or cutting costs as necessary during her tenure, she said they tapped the district’s fund balance, a one-time rainy-day fund for ongoing expenses.
She met with state department of education officials in March 2018 and reported the nearly complete lack of progress more than five years into the recovery plan.
“It was an overwhelming situation of things that still needed to be done,” she said. “I was disappointed. When all was said and done, the state didn’t take any action.”
Instead, Utley said, state officials said they wanted to wait for that year’s student test results.
But state officials knew things in the business office were bad, she said, because they discussed the potential need for a forensic audit.
The consulting firm PFM had been hired to assist the business office, but the consultants never got direct access to the district’s eFinance system, Utley said. Instead, they had to rely on figures and printed documents provided by the district’s business office.
“There were many times we would question the numbers,” Utley said. “There were situations where we would get complaints about a budget amount that was listed in the system one day, and then you’d come back later and the budget amount was reduced.”
When people asked about the reduction, district officials would chalk it up to a “data entry error,” Utley said. “There was no way to follow through if they were right or wrong. It became a cat-and-mouse game.”
At that point, few people had much faith in the financial numbers being provided by the school district. State officials, PFM and independent auditors also were pointing out difficulties in obtaining data, and rectifying conflicts in the numbers.
“By the end of the 2017-18 school year, they pretty much knew they had to do this (receivership,)” Utley said. “But they needed to have a solid case.”
The district may have been able to avoid receivership if the school board had decided to pick a new superintendent when Superintendent Sybil Knight-Burney’s contract expired in June 2018, Utley said. She believed part of the delay by the state was them watching for a potential change in leadership. Instead, a board majority voted to keep Knight-Burney for another three years, but they never finalized a contract.
Knight-Burney did not return messages left on her cell phone, and her attorney, could not be reached via email for this article.
Sen. John DiSanto, (R-Dauphin County) who began representing the city of Harrisburg in 2017, brought his “growing concerns with district decisions” to the state education department in June 2018.
“To my disappointment, the department indicated they were not in a position to recommend receivership at that time,” DiSanto said.
“Regrettably, the condition of the district only deteriorated and I made another request for receivership in April 2019. When a school district has reached the point that Harrisburg had, and the board and administration has become unable or unwilling to follow basic fiscal and managerial practices and instructions from the chief recovery officer, I believe the state, in the interest of offering students an appropriate educational opportunity, must seek receivership.”
Rep. Patty Kim, (D-Harrisburg) declined to comment for this article. But she previously said she approached state officials about taking over the district early this year.
No State Oversight?
Gene Veno, the district’s first chief recovery officer appointed by Gov. Tom Corbett, said he addressed mismanagement of funds under his tenure from 2012 to 2015, and supported former Education Secretary Carolyn Dumaresq’s call for an audit of federal programs in 2014.
The audit was scathing but Bilal Hasan, who was running federal programs at the time, wasn’t removed from federal programs. Instead, he eventually was promoted to assistant business manager and eventually acting business manager.
Veno said, the state seemed to take a hands-off approach after he left in 2015, after the new governor was sworn in.
"This could have all be avoided if in 2015 the State Department of Education, governor, and legislators followed the initial Recovery Plan,” Veno said. “Auditor General Eugene Depasquale was the only elected official who continued to monitor the fiscal crisis…the last four years of no state oversight on every level resulted in the financial crisis everyone is now speaking out about.”
Officials with the Pennsylvania Department of Education declined an interview with PennLive about whether they could have, or should have, intervened sooner in the Harrisburg School District. But a spokesman provided a statement explaining that “Pennsylvania is a local-control state, which means that the powers, duties and responsibilities of operating and managing school districts are fundamentally vested with the local school district” and its democratically-elected school board members.
“The Department of Education provides technical guidance as outlined in the School Code,", the statement said, "but the School Code neither grants the department the authority to manage school districts on a day-to-day basis nor provides for the staff and resources to manage the daily operations of 500 school districts.”
The School District Financial Recovery Law passed in 2012 outlines a process for evaluating struggling districts but “schools that are identified through this process are often in high poverty areas and face preexisting financial constraints, such as declining local tax revenue," the statement said. "As such, it can take years to return the districts to solvency.”
The department implemented and followed this process, said the statement provided by Spokesman Eric Levis.
“The department performed its due diligence, which included multiple monitoring visits, technical assistance to the district, and regular collaboration with the Chief Recovery Officers over the past seven years. In order to make a valid case for Receivership, it’s imperative that there is requisite evidence that the school district had not complied with various components of the State and District approved Recovery Plan.”
Levis did not respond to follow-up questions that pointed out that all of the evidence used earlier this year to petition a judge for receivership existed at least by 2017, nor did he address why the district continued to funnel federal money to Harrisburg despite repeated red flags in the district's spending.
While some people have focused on the state’s reaction-time , some residents said they appreciated the state’s measured response honoring local control. Still, those residents wondered why the oversight couldn’t have prevented some of the district’s decline.
“I wasn’t looking at it like why isn’t PDE stepping in,” said former School Board Member Ausha Green, who is now a city councilwoman. “I believe in local control and the assumption was that the state wouldn’t let it get this out of control. The expectation was, they have someone there (the chief recovery officer) and they have someone paying attention.”
Others don’t fault the state department of education, but instead fault the residents and voters.
“I don’t necessarily think PDE took too long to respond,” said Kia Hansard, leader of the community group CATCH, which last year took an active role at school board meetings. “To be completely honest, I think we as members of this community: residents, taxpayers, parents bear the brunt of that responsibility. We have a duty to hold people to a certain standard. We as a community failed when we did not show up, ask questions and demand answers from people who had an obligation to serve us.
"We allowed all of this to happen for far too long.”
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