8/12/2019 Audit Report Showed Coatesville School District
Mismanaged Funds
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Audit report showed CoatesvilleSchool District mismanaged
fundsBy Michaelle Bond, Inquirer Staff Writer
POSTED: MARCH 20, 2014
COATESVILLE While the Coatesville Area School District struggled
with a multimillion-dollardeficit, it paid for retirement benefits
in 2012 to an administrator who was ineligible for them,according
to a multiyear state audit report released earlier this month.
By exceeding its budget and causing a deficit in its general
fund, the district is also violating thestate Public School Code,
the report said.
The audit, which spanned from June 3, 2010, to April 26, 2013,
revealed that the district hascontinuously overestimated the
revenue it thought it would generate and had a "dramatic $31.1
million drop" in its general fund balance over a seven-year
period, which has put it in an"unstable financial position."
"The district's poor financial condition is due primarily to its
inability to control spending withinthe confines of its budget,"
according to the report from the office of State Auditor
GeneralEugene A. DePasquale.
The office performs regularly scheduled performance audits of
school districts in the state tomake sure they comply with state
laws.
In a statement Tuesday, Ronald Kabonick, the school district's
director of business
administration, said the district can't change the past but is
working to improve its financialcondition in the future.
The report cited the district's rising charter tuition costs - a
more than $8 million increase from2006 to 2012 - as a financial
burden to the district, which no longer receives reimbursement
fromthe state. The report recommended that the district try to
reduce the number of students whochoose charter schools over
district schools and develop a plan and timeline to reduce its
deficit.
School districts are required by the state to pay charter-school
tuitions.
The report also recommended that the district better monitor how
it spends its money, citing the
district's payment in 2012 of more than $21,000 in retirement
benefits to a former director ofbusiness administration, Kenneth D.
Lupold, who was an employee for only two years.According to
district regulations for supervisors, employees must have worked at
least 10 yearsto be eligible for retirement payments.
In the report, the district said that it waived the
years-of-service requirement in this case as partof its early
retirement incentive program, which it said it started to save
money.
