By Jon Delano

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WILKINSBURG, Pa. (KDKA) – The Pennsylvania Auditor General released a progress report on the financial health of the Wilkinsburg School District after a recent audit.

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Where did taxpayers lose more than $1,000,000?

Cash short back in 2013, the former Wilkinsburg School Board, with the approval of the state’s Department of Education, entered into a high-risk tax collection deal that cost taxpayers money, says PA Auditor General Eugene DePasquale.

“I strongly believe that Wilkinsburg made a bad decision, and I think the $1.2 million hit to the taxpayers is evidence of that,” DePasquale said on Wednesday at a press conference in Pittsburgh. “Whatever term we want to use, it was a bad deal.”

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In a 44-page audit report, DePasquale said school officials gambled with public money by taking what he called a payday-type loan to collect unpaid school taxes that were basically uncollectible.

“A payday loan is where you’re going, instead of going to a bank or in my view a reputable financial institution, you’re going to get something that is super high interest with the idea of getting cash immediately up front.

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“And if you can’t afford to pay that back right away, you end up paying a lot more back.”

The auditor general says Wilkinsburg taxpayers had to pay out $1.2 million to satisfy the debt.

“They ended up losing money in the deal because they went to a firm that wasn’t reputable, so my advice to all school districts is, if you can’t get a reputable firm to do it that means the deal shouldn’t be done.”

DePasquale would not disclose the name of the alleged loan shark but said the Education Department knows.

“What is particularly galling about this one was that the school district was under financial watch by the Commonwealth of Pennsylvania, and still it happened.”

As for Wilkinsburg, school district superintendent Dr. Linda Iverson says it’s a new day.

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“We recognize the journey now is not over,” said Iverson. “We understand the fiscal responsibility and how we must be good stewards of the community’s finances, but we are dedicated now to eliminating wasteful spending in Wilkinsburg.”