The Wilkinsburg School District is finally heading in the right direction, state Auditor General Eugene DePasquale announced Wednesday.
“We now have some hope in the Wilkinsburg School District, I think for the first time in probably a generation,” DePasquale said, unveiling the results of a recent audit, which covers July 2013 through June 2017.
That’s not to say the district, which was placed in financial watch status by the state Department of Education in 2013, is in the clear.
The audit released Wednesday shows that in July 2013, shortly after being placed in financial watch status and while the district was struggling to meet day-to-day operational costs, the district entered into what DePasquale described as a “risky” tax collection deal by bundling delinquent real estate taxes into “a payday type loan.”
Here’s what happened: The district sold collection rights of its delinquent real estate taxes to a loan operator in exchange for access to a $2.4 million line of credit, according to the audit report.
The district then attempted to repay the line of credit by collecting on those delinquent taxes, which were ultimately not able to be collected, the report said. As a result, the district was responsible for paying back the difference, plus associated fees and interest.
“I believe that loan, that was given in a sense to get the unpaid taxes for Wilkinsburg, was robbing the people of Wilkinsburg,” DePasquale said. “And if there wasn’t a reputable firm that was eligible to do it, then the deal shouldn’t have been done. The Wilkinsburg school board shouldn’t have OK’d it, the then superintendent shouldn’t have gone along with it and the state Department of Education should have stopped it from happening.”
DePasquale declined to name the agency involved, but said he has shared the information with the state Department of Education in case other districts attempt to enter into similar arrangements.
He also pointed out that all of those decisions preceded the current superintendent and school board. He praised the current leadership, calling a partnership with Pittsburgh Public Schools “a tremendous success.”
The district’s 106-year-old Wilkinsburg High School was shuttered at the end of the 2015-16 school year as enrollment dropped and the school became one of the worst-performing high schools in the state.
Students in grades seven through 12 started attending Westinghouse High School, operated by Pittsburgh Public Schools, the following fall.
“The arrangement with the Pittsburgh School District and Wilkinsburg showed courage and leadership by both entities looking out not for their ego, but looking out for the children,” DePasquale said.
The 2.3-square-mile district serves 548 students in grades pre-K through six across two elementary schools. About 92 percent of those students are considered economically disadvantaged, according to state Department of Education data.
The audit report also recommended that the district continue working towards maintaining a required safety plan, including compliance with state bullying prevention requirements.
The district must also address issues with documenting transportation reimbursement costs as well as state-paid tuition for educating non-resident students.
All of the recommendations included in the audit have already been put into action, district Superintendent Linda Iverson said.
“We recognize the journey now is not over,” said Iverson, who joined the district for the 2016-17 school year. “We understand the fiscal responsibility, and how we must be good stewards of the community’s finances. But we are dedicated now to continuing elimination of wasteful spending in Wilkinsburg.”
In 2018, the district lowered taxes by 3.13 mills and has made progress with shrinking the deficit fund balance, Iverson said.
The district is also seeing gains in academic performance, with an 8.8 percent increase in English state PSSA test scores from 2015 to 2018 and a 4.7 percent increase in math scores.
“The improvements are small — We own that,” Iverson said. “We don’t make excuses for poor or low achievement. But they are evidence that we are on the right track to academic success.”
The positive audit results are evidence that the partnership between the borough and school district is strong, Wilkinsburg Mayor Marita Garrett said.
For example, the borough worked with the district to select a new tax collector and to support school safety initiatives, she said.
“As you heard, in any community, you’re going to have ups and downs,” Garrett said. “You’re going to have your obstacles. But I’m really proud to be here today to show that we are already having work in progress but continuing to truly move Wilkinsburg forward together.”