Philly schools owe former employees $6.6M

The Philadelphia School District owes more than 2,300 former employees $6.6 million in back pay, the city controller said Tuesday.

The report was the latest attempt by Controller Alan Butkovitz to call out the district for the millions it owes past workers for unused leave time accrued during their tenure.

The issue doesn't stem from a lack of funds, but a lack of staff to process the claims. The backlog dates to several years ago, when the district shed thousands of employees, including financial staff. It quadrupled the workload and halved the workers to process it, School District chief financial officer Uri Monson said.

"We've got to solve this problem," Monson acknowledged Tuesday. "It's a bad way to operate, but it's not for lack of effort."

When teachers and other staff retire or quit, they're entitled to termination pay for their unused leave time. Within 75 days, the district is supposed to cut a check for workers under 55 or, for those over that age, deposit the money into a tax-sheltered annuity. In some cases, the district still owes money to workers who left as far back as 2001.

Paulette Nicholas taught Philadelphia schoolchildren for 31 years, retiring in 2016. More than a year after she left Stephen Girard Elementary in South Philadelphia, Nicholas has yet to be paid for eight weeks of unused personal time and six days of unused sick time.

Since retiring, Nicholas, 63, has gotten a hip and a knee replaced — and made something of a hobby of checking on the money owed to her.

"Either you can't get anybody on the phone, or they give you an excuse," said Nicholas. "They won't tell me where my money is, and that's not fair to me."

Blaming the staff shortage, Monson said two payroll staffers were added last fiscal year and more are in the budget for this year.

"We're hoping that when we get all four positions filled, we'll assign one — if not two — people to backlog," he said. Monson also said the district has often prioritized sending extra resources to schools at the expense of central-office costs.

In many cases, the claims are complicated by paperwork problems. Some employees didn't select the annuity where they wanted their money to go. In other cases, the district lacks current addresses or other basic information.

Nicholas said she scrupulously filled out all the necessary paperwork to make sure that things would be in order when she left.

"It was so much red tape; we had to do things in a timely manner, but the district can do whatever it wants to us," said Nicholas. "We picked the profession of educating Philadelphia's children. They ought to do right by the teachers."

Arlene Kempin, the Philadelphia Federation of Teachers' human resources liaison, said Nicholas' experience isn't isolated. "This is a major issue for us and for our members," Kempin said.

Butkovitz's audit is a year behind — the $6.6 million he cited Tuesday was for fiscal 2016 — but Monson said the situation didn't improve materially for fiscal 2017, which just ended. The chief financial officer said he hopes the problem will be far less severe by next year.

Butkovitz said the district needs to dedicate the resources to end the backlog: "There are laws in place to ensure that former employees are paid what they are rightly owed," he said in a statement.

He also touched on a number of other district issues, calling for tighter controls on payroll processing and the administration of student activity funds. In its official response, the school system said it had resolved several audit findings and was working to fix others.