Taxpayers contributed $2.3 million for city employees to earn college degrees in the last five years, but nearly half of that investment has been lost due to mismanagement, according to a report from the city controller.

"Most, if not all, of the agencies had managed their tuition reimbursement program poorly," the Controller's Office said in its report, released Wednesday. "These poorly run programs contributed to tuition overpayments, questionable degrees, and the failure of agencies to collect from reimbursed individuals who willfully left city employment prior to a two-year commitment period."

The Controller's Office found that between July 2011 and March, 27 city employees who received tuition help from the city left their jobs before the required two years of continued service. In addition, the tuition received by some employees was not reported as income on annual wage statements and therefore the city lost a portion of wage tax revenue.

"We estimate that taxpayers and residents lost as much as $1 million as a result of the ill-managed programs," the controller's report said.

Under the program, city employees who leave their government job within one year are required to return 100 percent of reimbursement payments, the controller's office said. Those who leave after one year but before two years are required to return a prorated portion.

"It is unfortunate that a few employees abused a program that helps the city maintain a highly-skilled and well-educated workforce," City Controller Alan Butkovitz said in a statement.

Part of the problem, the Controller's Office said, is that no one person is overseeing the tuition reimbursement program. Each city agency and department is responsible for setting eligibility rules.

The Police Department made the most use of the program, paying $988,342 in tuition between July 2011 and March of this year. The second-largest user was the Fire Department with $708,862, followed by the Water Department with $377,858 during the same time period.

There is no maximum set for the amount of tuition reimbursement an employee may receive.

Butkovitz said he would like Philadelphia to adopt policies similar to other cities that require pre-approval of reimbursements and have annual limits. For example, Austin, Texas, has an annual reimbursement limit of $2,000 and Phoenix has a $6,500 limit.

Philadelphia employees were sometimes reimbursed more than $10,000 in one year. The Controller's Office found one employee, who no longer works for the city, receiving more than $20,000 in one calendar year.

"Other cities have taken a much stricter course with their tuition reimbursement programs," Butkovitz said. "There is no reason why Philadelphia cannot duplicate their policies and establish a program with greater oversight."

The city's director of human resources, Pedro Rodriguez, who has been in the position since May, said in a letter to Butkovitz that he would convene a group of representatives from various city departments to implement a citywide policy on tuition reimbursement.

"I will also submit recommendations to the Civil Service Commission for additions and changes to the regulations that would support improved applications of this benefit throughout the government," Rodriguez said in the letter.

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