Auditor General Jack Wagner's Audit Finds Pennsylvania Owes $425,000 to Bethlehem...

Auditor General Jack Wagner's Audit Finds Pennsylvania Owes $425,000 to
Bethlehem Area School District

Underpayments due to inaccurate wage data district provided to commonwealth

HARRISBURG, Pa., May 19 /PRNewswire-USNewswire/ -- Auditor General Jack Wagner
said today that the Bethlehem Area School District, in Northampton County,
submitted inaccurate Social Security and Medicare wages data reports to the
Department of Education, resulting in reimbursement underpayments to the
district of $425,790.

Wagner recommended that the Department of Education pay the district an
additional $425,790 through future state aid allocations as soon as possible
to resolve the underpayments.

"My role as auditor general is to ensure that school districts run efficiently
and effectively, and to ensure they receive the funds to which they are
entitled," Wagner said. "The audit of the Bethlehem Area School District
found that the district was eligible for additional state aid reimbursements.
The Department of Education should provide Bethlehem Area School District the
state funding to which it is fully entitled."

Wagner's audit, which covered the period Aug. 18, 2006 to Oct. 17, 2008, found
that school district administrators understated federal wages by $214,622 in
the 2004-05 school year and by $211,168 in the 2005-06 school year.

Wagner said school district administrators omitted certain qualifying wages
for new and existing employees because they misunderstood the Department of
Education's instructions for filing Social Security reimbursement forms.
Wagner's auditors also found that district personnel failed to reconcile total
taxable wages for Social Security and Medicare with wages reported on the
Employer's Quarterly Federal Tax Return.

Wagner recommended that the district ensure personnel are aware of proper
procedures for completing state Social Security reimbursement forms, and that
the district reconciles total taxable wages for Social Security and Medicare
with wages reported on the Employer's Quarterly Federal Tax Return.

School districts are required to pay the full amount of Social Security and
Medicare taxes and are subsequently reimbursed the commonwealth's matching
share, excluding wages that are paid with federal funds. For employees hired
prior to July 1, 1994, the commonwealth's matching share is 50 percent of the
employer's share of tax due, and for new employees hired after July 1, 1994,
the commonwealth's matching share is based on the state aid ratio or 50
percent of the employer's share of tax due, whichever is greater.

School district personnel agreed with the finding and indicated that the
district plans to provide training to its employees responsible for completing
the reports, and to amend its reports with the Department of Education to
claim the monies that the district is due.

The full audit report is available on the Department of the Auditor General's
Web site at www.auditorgen.state.pa.us.

Auditor General Jack Wagner is responsible for ensuring that all state money
is spent legally and properly. He is the Commonwealth's elected independent
fiscal watchdog, conducting financial audits, performance audits and special
investigations. The Department of the Auditor General conducts more than
5,000 audits per year. To learn more about the Department of the Auditor
General, taxpayers are encouraged to visit the department's Web site at
www.auditorgen.state.pa.us.

SOURCE Pennsylvania Department of the Auditor General

Steve Halvonik of the Pennsylvania Department of the Auditor General, +1-717
787-1381