January 5, 2013 – Officials in the Reading School District (A3 – 755638VH3) announced the discovery of an accounting error that has left the district short more than $15 million. Board President Robert F. Heebner Jr. said revenues for the 2010-11 school year were overstated by about $15.6 million. Heebner said it is still unclear which revenues were misstated. That number could change, he said, as the district is still working on digging up all the facts about the incident. The mistake was missed in audits of the district last year but popped onto the radar during an audit of the 2011-12 school year, which is taking place now. Heebner and school board Vice President Pierre V. Cooper, speaking Friday at the district administration building, said employees should not be concerned that the mistake will impact their paychecks. “We will make payroll,” Heebner said. “We will be able to pay our bills.”
Link to Full Article: http://readingeagle.com/article.aspx?id=441680
Comment: The “missing” money represents a little less than half the district’s June 30, 2011 fund balance; significant but not devastating. Moody’s downgraded the District’s underlying rating a notch to A3 in February, 2012 and shouldn’t be too happy with this development. However, all of the District’s debt is enhanced through either the Pennsylvania Act 150 School District Intercept Program (A1) or Assured Guarantee (Aa3).