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Controller’s audit of District financial controls found no ‘material weaknesses’

This article was originally published in The Notebook. In August 2020, The Notebook became Chalkbeat Philadelphia.

City Controller Alan Butkovitz released his annual report on the School District’s internal controls on Wednesday and drew headlines for his continued concerns about the District’s handling of its art collection.

But not noted in the media coverage was the fact that this is the first time since 2008 that the controller’s review of the District’s internal controls found neither “material weaknesses” nor “significant deficiencies.”

A material weakness is a deficiency in procedures or controls that would lead to a likelihood of misstatements of the District’s financial situation. Last year’s review by the controller found one material weakness and one significant deficiency. The year before that, one material weakness and five significant deficiencies were flagged.

The controller’s findings did identify 10 areas in need of improvement, most of them areas that have been flagged before.

“The report shows that we still have work to do, but we clearly are making progress at correcting the issues,” District Chief Financial Officer Matthew Stanski said. Stanski credited his accounting team, as well as school staff, adding, “Folks in the field are following the procedures.”

Among the problem areas identified by the controller’s report:

  • Safeguarding and record-keeping of the District’s property was a continued concern, but no longer deemed a "significant deficiency" by the controller. In its formal response, the District described its efforts to ensure that an accurate annual inventory of equipment and furniture is conducted in every school facility and a report is filed.
    Student activity funds "remained at risk for theft and misuse." The District says it plans to implement a student activity fund software program for schools in the new school year.
    The District failed to publish minutes of School Reform Commission meetings, putting them out of complicance with the state Sunshine Act. The District pledged to start making its minutes available after they are approved by the SRC.

As for the District’s art collection, Stanski said there are efforts underway to reach out to museums and other institutions and explore ways to exhibit some pieces.

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