Philadelphia City Controller Alan Butkovitz yesterday called for greater fiscal oversight of the school district in response to its uncertain finances.

He said he was troubled that Fitch Ratings - one of three major bond-rating agencies - had recently lowered the district's underlying bond rating.

Though it's still investment-grade, if the district's bond rating is lowered again it would fall to junk-bond status, making it difficult for the district to fund construction projects.

Butkovitz proposed that the Legislature and City Council grant him "pre-audit authority" over the district's budget; that the Pennsylvania Intergovernmental Cooperation Authority be empowered to oversee district finances as it does the city's; and that the district provide him, the mayor and the governor with all the information the district provides to the bond-rating agencies.

While the district's chief financial officer characterized the bond downgrade as having little impact on day-to-day operations, she said it could slightly change the cost of borrowing money.

More pressing, said Chief Financial Officer Folasade Olanipekun-Lewis, is a budget deficit totaling about $183 million - $30 million from the 2005-06 fiscal year, and approximately $153 million projected for the upcoming 2007-08 budget year that begins July 1.

"We are now looking at everything and making decisions about how we can right-size our budget in relation to our projected revenue stream," said Olanipekun-Lewis.

She said the district already provides Butkovitz with all the information it gives the bond-rating agencies, information that is also on the district's Web site. His two other proposals, she said, are not for the district to answer.

A spokesman for Gov. Rendell, Chuck Ardo, said, "The governor has confidence in the School Reform Commission's ability to produce a budget and meet its fiscal obligations. However, should the commission be unable to meet its obligations, the governor would be willing to consider Mr. Butkovitz's suggestions along with those of others." *