Report On Internal Control and On Compliance and Other Matters School District of Philadelphia Fiscal Year 2022

Audit Date: April 12, 2023
Audit Categories
  • Annual,
  • Financial
Controller: Charles Edacheril
Audit Tags
  • FY22,
  • Internal Control,
  • Internal Controls,
  • School District,
  • School District of Philadelphia

Executive Summary

Why the Controller’s Office Conducted the Audit

In accordance with the Philadelphia Home Rule Charter, the Office of the City Controller audited the School District of Philadelphia’s (School District) basic financial statements as of and for the fiscal year ended June 30, 2022 for the purpose of opining on its fair presentation. As part of this audit, we reviewed the School District’s internal control over financial reporting to help us plan and perform the examination. We also examined compliance with certain provisions of laws, regulations, contracts, and grant agreements to identify any noncompliance that could have a direct and material effect on financial statement amounts.

What the Controller’s Office Found

The Controller’s Office found that the School District’s financial statements were presented fairly, in all material respects in accordance with accounting principles generally accepted in the United States of America and issued a separate report that accompanies the School District’s Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2022. The audit procedures used to arrive at our conclusion regarding these financial statements led us to identify matters involving the School District’s internal control over financial reporting that require management’s attention. Some of the more important matters include:

  • Inadequate review of access controls and segregation of duties continue to remain within the School District’s Oracle system including the identification of incompatible roles, responsibilities and permissions, which may potentially allow a system user with access commensurate with their job duties.
  • Outstanding termination pay due to former employees in the amount of $1.4 million due to almost 200 employees. The School District would appear to be in violation of applicable labor agreements by not distributing the funds in a timely manner.

What the Controller’s Office Recommends

The Controller’s Office has developed a number of recommendations to address the findings noted above. These recommendations can be found in the body of the report.