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“Anything short of independent oversight over the PPA is unacceptable”

PHILADELPHIA — Today, in a City Council hearing, the Philadelphia Parking Authority agreed to amend their accounting practices which had caused an $11 million financial “misstatement” with the School District of Philadelphia and the City made a direct request to have City oversight over the PPA’s budget.

The statements were made as City Council launched its investigation of the Philadelphia Parking Authority’s underfunding of public schools in light of a series of financial missteps, turbulent leadership changes, and questionable spending reports. Councilmember Helen Gym today called for City oversight over the PPA’s budget, quarterly financial reports and data, and increased coordination on any PPA policy shifts that would impact District funding.

“Anything short of independent oversight over the PPA is unacceptable — that’s the bottom line. The Parking Authority’s refusal today to voluntarily agree to additional transparency measures has made this abundantly clear,” said Councilmember Helen Gym (At-Large). “In many ways, today’s hearing begs more questions than answers, and the lack of preparation to address among our most straightforward inquiries demonstrates this Authority is in dire need of intervention. This investigation will continue moving forward.”

Councilmember Gym announced this formal investigation following the PPA’s announcement that the District owed the agency nearly $11 million in an alleged overpayment — a request made without any supporting documentation and which the PPA canceled in May allegedly as a result of overpayments into a secret pension fund. Last month, Councilmember Gym issued a subpoena to the PPA for records related to the Authority’s finances, accounting practices, and contributions to the City and School District of Philadelphia. The PPA’s response to the subpoena request was incomplete, and lacked sufficient information to assess the validity of the Authority’s spending and deductions from On-Street revenues, from which the District receives funding.

The documents shared with City Council under the subpoena raised concerns over the types of revenues deducted from the PPA’s On Street division, which funds the City and School District. This includes capital expenditures, secret overpayments into a pension fund, excessive salaries and staff hires, including compensating high school and college interns with stipends exceeding $30,000. None of this information had been previously disclosed to the City or the District.

“More challenging than the inconsistent funding levels was the lack of information sharing that occurred between the PPA and the School District,” said Uri Monson, Chief Financial Officer for the School District of Philadelphia. “The lack of projections make it difficult for the District to plan on use of those funds both in the upcoming fiscal year, as well as long term planning as part of the District’s Five Year planning process. Even today, June 22, nearly three months after the close of the PPA’s fiscal year, we still have not been told the amount of any payment the District will receive – a payment that is routinely provided in early July.”

Prior to 2012, the City and PPA had an agreement that gave the Mayor substantial authority over the PPA’s budget. In written testimony, Rob Dubow, Finance Director for the City of Philadelphia, called for a return to this level of oversight. “Having the kind of authority that existed before 2012 would give both the City and the School District more ability to plan for expected revenues, lessen the likelihood that there would be unanticipated changes during the year, and increase the City and the District’s ability to react to any variances that developed during the year,” said Mr. Dubow.

Councilmember Gym noted that the PPA had failed to meet the requests outlined in the subpoena and said that the investigation would continue, with more subpoenas if necessary. “This investigation won’t stop until we uncover the answers Philadelphia school communities and tax-payers deserve — no matter what it takes,” said Gym.

The Commonwealth of Pennsylvania took over the governance of the PPA in 2004, with the express claim the entity would provide $45 million in additional revenue to Philadelphia schools. From 2004 to 2007, the PPA contributed $0 to the District. Councilmember Gym, then a member of Parents United for Public Education, led the campaign which prompted the first contributions to the District in 2007.

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