Philadelphia controller warns school district again of financial danger

Philadelphia City Controller Alan Butkovitz has written a second letter to school district officials warning that his annual audit may conclude the district’s finances are such a mess he can’t be sure it will continue as “a going concern.”

“The heart of the problem is that the school district is out of money, and they have no credible plan to deal with that, only hopes,” Butkovitz said Tuesday in a telephone interview.

District officials wrote Butkovitz after his first warning letter, saying they have a menu of options to address the problems, and they’re certain they’ll be able to cover their bills.

Butkovitz, who said he is not convinced, said the audit could lower the district’s credit rating and make it hard to borrow.

“If they can’t borrow and they don’t have the money and they don’t have the revenues and they haven’t reduced expenditures, they are going to be out of money,” Butkovitz said.

Butkovitz said it’s not clear what happens if the state’s largest school district implodes financially.

“I think we’re in uncharted ground,” he said. “These kids have a constitutional right to be educated, and the state and the city are going to have to do something to guarantee and provide that education.

“And I assume that there’s going to be a lot of pushing and shoving among the various responsible elected officials about who’s going to do what,” he said.

Butkovitz is expected to publish his audit Feb. 10.

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