City Controller Alan Butkovitz raised questions yesterday about the district’s future financial viability in a letter to the Philadelphia School District’s new chief recovery officer, Tom Knudsen.
The letter is part of an audit by Butkovitz of the district’s financial statements. In it, he asked whether the district had the authority to make cuts necessary to close its $61 million deficit and asked how it planned to address a $269 million “structural deficit” for next year that could grow larger.
“Because the conditions raise serious concerns about the district’s continued viability, it is imperative that the school district explain to us, as quickly as possible, how they plan to deal with the adverse effects of the conditions we outlined,” Butkovitz says in the letter.
The district responded by saying it will address all of the controller’s concerns and that it does have the authority to implement the gap-closing measures.
“It is important to note that there has been no finding that the district cannot continue as a ‘going concern.’ The district continues to meet both its debt service obligations and payroll,” the district’s statement reads.
Knudsen was appointed last week to help pare down the district’s expenses. He will work through June for $150,000.
The district has made more than $460 million in reductions since September, but has been stymied by lower revenue and less-than-expected savings from union contracts. The remaining options are all bleak, such as drastic cuts to school police and the elimination of spring sports and gifted programs.