The Internal Revenue Service has launched an in-depth audit of the School District of Philadelphia's financial practices, personnel policies, and payments to contractors.
One IRS document obtained by The Inquirer lists 28 specific areas of inquiry and seeks information on reimbursements for travel and meals, the use of district automobiles and credit cards, and "checking account data for payments that are processed outside the district's general fund."
Amid the audit, which focuses on calendar year 2009, the district on Wednesday abruptly fired its payroll director, who had been dealing with IRS requests since April.
Eileen Pelzer was dismissed, according to sources, after senior district officials blamed her for not informing them of the IRS inquiry or that its scope had broadened to include questions about how School Reform Commission members were reimbursed for expenses and details of payments to independent contractors.
School district spokeswoman Shana Kemp confirmed the audit of the district, which has a current budget of $3.2 billion. She described the inquiry as random and routine and disputed that it included the SRC, the five-member board appointed by the governor and the mayor to oversee the district.
Kemp declined to discuss Pelzer's dismissal, saying the district, as a matter of policy, did not comment on personnel matters. Pelzer, who had been employed by the district since July 2008, also declined to comment.
An IRS spokesman declined to comment.
The auditors arrived at school headquarters on Tuesday - the same day that Superintendent Arlene C. Ackerman and her administrative team appeared before City Council to ask for tens of millions in additional funding to help the district plug a projected $629 million shortfall.
Auditors were asking why some people were given both W-2 forms, indicating employee status, and 1099 forms, indicating contractor status, sources said.
The auditors also asked whether SRC members were on the payroll and how their expenses were reimbursed, the sources said. They also wanted to know about charter-school funding.
Sources, including district employees, said senior officials were unprepared to answer some of the questions the auditors asked this week and had to request an extension. The employees asked not to be identified by name because they were not authorized to discuss the audit or Pelzer's termination.
