In his latest audit of the School District of Philadelphia, City Controller Alan Butkovitz said serious questions surround the district's failure to document $50 million in transportation costs for special education.

When auditors requested documentation to determine how bus attendants' payroll costs were determined, district personnel could not provide a copy of the study, according to a statement issued yesterday by Butkovitz.

The audit, conducted for fiscal year 2009, also found that $1.3 million of $2.1 million in open contracts and orders was determined to be unnecessary. Before the audit was completed, district management made adjustments to correct $631,638 of invalid sums identified by auditors.

Other instances in which the district provided insufficient documentation for special education, Butkovitz said, included: no support for maintenance costs for vehicles used to transport mail between district locations, and inadequate support for the calculation of Social Security and Medicare tax contributions reimbursed by the state.

"Keeping timely studies that help determine accurate costs and properly retaining these records are essential to effectively maintaining the school district's finances," Butkovitz said.

The district must ensure that all state reimbursements are received and for the correct amount, and that such information should be reflected for newly hired employees, he added.

Responding to the report, Michael Masch, the district's chief business officer, said that district officials have begun to implement changes.

A study to be conducted by the end of fiscal year 2011 will document bus attendants' payroll, with any necessary changes made to allocation rates, and nonstudent maintenance costs will be properly documented, Masch wrote.

He added that an analysis of transportation employees' employment dates will be prepared to identify Social Security and medical-reimbursement rates.