Philly schools shorted a federal grant program by $2.2 million, a city controller’s audit found
Shorting a federal grant program of more than $2 million was a "significant deficiency," Controller Christy Brady found. The money was to help students prepare for college.
The Philadelphia School District failed to make $2.2 million in required contributions to a federal college-readiness program, a new audit by the Philadelphia City Controller’s Office found.
Under the terms of the federal funding, offered to schools in economically disadvantaged communities, the district must match the funds it receives from the U.S. Education Department.
Philadelphia reported nearly $3 million in expenses for the program, called Gaining Early Awareness and Readiness for Undergraduate Programs (GEAR UP), in the 2023-24 school year. But it contributed only $820,416 — a little over a quarter of its obligation.
The school system, the audit found, has no systems in place for “identifying, securing and tracking matching contributions,” which, under the terms of the grant, could come in the form of cash or in-kind services.
The shortfall was judged a “significant deficiency,” and City Controller Christy Brady said that if the problem is not resolved, “the school district is at risk of not receiving future grant funds for this particular program, or they might have to repay” the federal dollars.
The district in 2022 was awarded a $29.5 million GEAR UP grant to be administered over seven years. The funds support college-readiness work at 12 district high schools and 30 schools with middle-years grades.
“These are huge dollars to help our kids, and we would hate to see it not applied,” Brady said. “This is a great funding opportunity for the school district.”
Brady’s office audits the district’s federal grants programs annually. Though the bulk of the district’s $4.6 billion budget comes from state and local funding, the school system does receive millions from the federal government — the bulk of it via Title I aid to schools that educate students from low-income areas.
Not every program is examined every year; this year, Brady’s office audited the district’s school breakfast and lunch programs and fresh fruit and vegetable programs, as well as GEAR UP, a career and technical education program, and an “education stabilization” program.
Brady recommended immediate fixes including creating a tracking system, training grant staff to find funding streams for matching contributions, and conducting periodic reconciliations.
Despite the deficiency, Brady said she was gratified by the district’s quick response and plans to remedy the issue.
“They do have a very strong accounting staff, and they had a very detailed corrective action plan that I’m very happy with,” Brady said.
Answering the controller’s findings, district officials “agree with the deficiencies identified regarding matching contributions, level of effort, and earmarking for the GEAR UP program,” the controller’s report said.
School system officials promised to put fixes — including launching a detailed tracking system — in place by September “to ensure the matching requirements are met by the end of the grant period in 2027.”
The news comes amid a time of turmoil at the U.S. Department of Education; Education Secretary Linda McMahon recently laid off about half of her staff. President Donald Trump has said he wants to shutter the department. And the department is threatening to withhold Title I funding from states that fail to certify that all of their districts have ended diversity, equity, and inclusion programs.