Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Auditor General Questions District's Loans Duquesne's Lending Might Violate Ethics

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Auditor General Questions District's Loans Duquesne's Lending Might Violate Ethics

Article excerpt

The Pennsylvania Auditor General plans to refer the former superintendent and several other employees of the Duquesne City School District to the state ethics commission, after he said they used district money for questionable personal loans.

Auditor General Eugene DePasquale's office on Monday released a 42-page audit of the Duquesne district, which was placed under state control in 2012 because of its struggling finances.

According to the audit, which spanned from July 1, 2012, to June 30, 2016, former superintendent Barbara McDonnell authorized more than $41,000 in personal loans to herself and three other district employees. Eleven of the 22 loans authorized during that time - or about $23,000 - were to Ms. McDonnell. And even though the money was used from the district's general fund, none of the salary advances were approved by the school board, the district's receiver or the chief recovery officer.

"Such behavior is especially egregious given the district is in state receivership and has to send its middle and secondary students to other school districts," Mr. DePasquale said in a news release, arguing that the practice could indicate a possible misuse of public funds and violation of the state Ethics Act.

The school district did not have a formal policy regarding the issuance of personal loans to employees, but a list of procedures was provided to auditors, the report states. All district employees had to do to receive a loan was submit a written request to the superintendent, who passed it along to the business manager who then referred it to a payroll clerk and a business consultant, who developed an "informal" repayment plan for the employee. District officials said the loans were issued to assist with "financial hardships," but many of the requests auditors reviewed included a request for an advance without providing a reason.

One request from the former superintendent was for $1,000 to "assist with the holidays and my daughter."

The report also noted that Ms. McDonnell submitted her loan requests directly to the payroll clerk, a subordinate. The business manager also approved loans for the payroll clerk, who is a relative. …

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