Auditor General: Districts Mismanaged Millions

SCRANTON — The Pennsylvania Auditor General is reprimanding two school districts in Lackawanna County for mismanaging nearly $7.5 million in taxpayer dollars.

Both Scranton and Carbondale Area school districts are being blamed for wasting taxpayer money on risky investments, poor decisions, and ineffective management.

The auditor general’s report released what he is calling “staggering” numbers.

According to the report, the Scranton School District and the Carbondale Area School District mismanaged a combined total of nearly $7.5 million that the auditor general says could have been put towards teacher salaries and school programs.

“The numbers are staggering.  We’re talking about nearly $7.5 million.  Imagine how many teachers that could be hired, smaller class size that that could lead to,” said Pennsylvania Auditor General Eugene DePasquale

The state report shows a large portion of Scranton School District’s mismanagement centers on risky investments.

According to the report:

  • In 2011, $6.5 million was paid in termination fees for investments called swaps.  That money went to Wall Street.
  • The district also overpaid its bus contractor more than $3,200 because of failing to put the contract out to bid.
  • The district was underpaid $260,000 in state funds due to reporting errors.

Across the county in Carbondale, the auditor general shows more financial fallout:

  • The cost to taxpayers was more than $921,000 because of poor oversight and mismanagement.
  • $690,000 of that was spent in retirement packages for the former superintendent and two principals.
  • $150,000 of that was spent on tuition for ineligible children of teachers and administrators who were living outside of the school district.
  • The district was underpaid $80,000 in state funding due to reporting errors.

DePasquale says this lack of fiscal control simply can’t be tolerated.

“When school districts are struggling with tight budgets, it’s hard to watch these tax dollars going anywhere other than classroom education.”

Now that this report is public, the state hopes these two schools will start managing their dollars more carefully.

“Hopefully by shedding a light on this the school districts, both of them get better practices in place so that they don’t fall into this situation again.”

Late this afternoon, the superintendent of the Scranton School District told us the investments criticized by the auditor general were approved and endorsed by the state. And the superintendent says Scranton pays the same for bus service as most other districts in an urban setting.

We have not heard back from Carbondale Area.

Taxpayers we spoke with were upset with the news.

“I’m quite disouraged and a little bit angry that professionals can’t figure out how to manage money better,” said Carbondale resident Carla Borne.

“I really do hope this is a lesson learned to them,” said Cynthia Pagan, a parent to students in Carbondale Area Schools.

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