Wednesday, August 24, 2011

Auditor General Jack Wagner on School Superintendent Buyouts

from yesterday's inbox:

Auditor General Jack Wagner said today that he was initiating a new policy of immediately auditing school superintendent separation agreements so that full details of buyouts would be available to taxpayers.

Wagner announced the enhanced policy after the School District of Philadelphia and the Allentown School District relieved their superintendents of their duties within the past week. Wagner said he was particularly disturbed because these two districts have announced significant classroom cutbacks because of declining financial support from state government. According to media reports, the outgoing Allentown superintendent is receiving a $50,000 contract buyout and ongoing employment at the school district at the same $195,000 salary and the outgoing Philadelphia superintendent is getting a $905,000 severance package, with $500,000 coming from taxpayers and $405,000 from anonymous private donors.

Wagner said his auditors would contact the Allentown School District and School District of Philadelphia in the next few days to obtain complete information on the details of their superintendent buyout agreements.

“Public school districts in Pennsylvania are grappling with their greatest financial challenge in a generation, and they are working hard to make sure that every taxpayer dollar is being spent wisely and prudently,” Wagner said. “Superintendent buyouts send a message to the public that the leadership in these school districts are out of touch with taxpayers and are not careful stewards of taxpayer dollars. Superintendent severance packages are questionable not only because they appear to waste money, but because the full terms of the secretly negotiated severance packages are seldom made available to the public for scrutiny. As the state’s independent fiscal watchdog, I want to help taxpayers understand what they are paying for.”

The superintendent buyouts in Allentown and Philadelphia are the latest that Wagner has highlighted during his 6 ½ years as auditor general. Other school districts previously cited by Wagner’s audits were:
• Mt. Lebanon School District (Allegheny County): Buyout in excess of $420,000
• South Allegheny School District (Allegheny County): Buyout in excess of $375,000
• Lehighton Area School District (Carbon County): Buyout in excess of $150,000
• Pittsburgh Public Schools (Allegheny County): Buyout in excess of $150,000
• Derry Township School District (Dauphin County): Buyout in excess of $126,000
• Warren County School District (Warren County): Buyout in excess of $101,000
• Coudersport Area School District (Potter County): Buyout in excess of $73,000

Wagner previously made specific recommendations to the General Assembly in August 2005 to amend state law to reduce or eliminate the need for buyouts. Wagner has recommended:
• School districts should limit their potential liability by granting future superintendents to the three-year minimum contract term permitted by state law,
• Future superintendent employment contracts should contain adequate provisions from the outset of the employment relationship to address premature termination of employment, and
• Superintendent contracts should not contain confidentiality clauses that prohibit public disclosure of the reasons for the termination of superintendent to justify the school district’s expenditure of public funds to buy out the superintendent’s contract.

“Because the General Assembly and school boards have has failed to take action and rein in these wasteful buyouts, the Department of the Auditor General will step up efforts to keep taxpayers informed,” Wagner said.

Wagner sent a letter on August 9 to Robert L. Archie Jr., chairman of the Philadelphia School Reform Commission, informing him of the Department of the Auditor General’s concern that “negotiated buyouts of school officials are frequently not made transparent to the public.”

“I urge you, as stewards of tax dollars for the citizens of the City of Philadelphia, the Philadelphia School District, and the Commonwealth of Pennsylvania, to do the right thing on behalf of the taxpayers concerning salary and compensation packages for School District of Philadelphia administration leaders,” the letter concluded.

Auditor General Jack Wagner is responsible for ensuring that all state money is spent legally and properly. He is the commonwealth’s elected independent fiscal watchdog, conducting financial audits, performance audits and special investigations. The Department of the Auditor General conducts thousands of audits each year. To learn more about the Department of the Auditor General, taxpayers are encouraged to visit the department’s website at

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