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House of Representatives
Session of 2021 - 2022 Regular Session


Posted: December 21, 2020 01:20 PM
From: Representative Anthony M. DeLuca
To: All House members
Subject: School District Financial Reform Package
At my request, in 2016 the Auditor General’s office conducted a performance audit of the Penn Hills School District, in my legislative district. The school board and district administration made poor financial decisions in recent years, including the construction of two new overpriced schools, with obvious disregard for protecting taxpayer dollars. The results of the audit were stunning. Auditor General Depasquale said that Penn Hills is now in the worst financial shape of any district in the Commonwealth. Following the audit, an Allegheny County grand jury was convened to investigate, which called the district's financial condition "catastrophic." When the grand jury report was released in February 2019, it included several recommendations, six of which I will be introducing through legislation. I hope that with these important first steps, no other district can be so reckless in the future, and no other taxpayers in Pennsylvania will have to suffer like the property owners of Penn Hills.

Document #1

Introduced as HB566

Description: This bill would require a referendum for any borrowing by a school district which would amount to 50% or more of its borrowing base limit. The borrowing base limit calculation is spelled out in 22 PA Code 731.2. 

Document #2

Introduced as HB567

Description: This bill would make sure that both revenues and expenses are included when determining a school district's borrowing base limit. Currently, only revenues are considered in this calculation (spelled out in 22 PA Code 731.2). 

Document #3

Introduced as HB568

Description: This legislation would 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, and would make the audit available to the public at the Act 34 hearing required by current law. 

Document #4

Introduced as HB569

Description: If a district seeks to construct a new school or building, this legislation would allow the Department of Education to review construction plans and total costs to see if a referendum is required under current law. A referendum is triggered if the maximum building construction cost authorization exceeds the aggregate building expenditure. 

Document #5

Introduced as HB570

Description: The grand jury investigation of Penn Hills School District suggests that within school finances, mistakes and wrongful actions may take years to find, and when misconduct is found, the acts often exceed the current five-year statute of limitations. In this legislation, I propose amending Title 65, regarding ethical standards, to allow investigations within 5 years of the discovery of the alleged occurrence, rather than when it originally took place. 

Document #6

Introduced as HB571

Description: This bill would hold school district and school board officials accountable if they make false communications to the Department of Education regarding construction plans or costs. District officials could be subject to second or third degree misdemeanor charges under Title 18, Chapter 49, regarding falsification and intimidation.