School District of Philadelphia issued nearly 700K in fraudulent payments, officials say

The School District of Philadelphia fell victim to a sophisticated scam, losing nearly $700,000 to fraudsters posing as contractors. Payments intended for legitimate vendors were redirected to unidentified third parties, with $563,000 earmarked for flood damage restoration among the stolen funds. The fraud was uncovered during an annual audit, leading Controller Christy Brady to request an investigation from the Pennsylvania Attorney General. Brady emphasized that the district's financial data systems remained secure and that the unauthorized payments were within approved contract limits. Superintendent Tony Watlington confirmed that no additional fraud has surfaced since these incidents.

In response, the district has enhanced internal controls, including revised bank confirmation processes and improved vendor payment validation methods. Brady expressed hope for recovering some of the lost funds, as the investigation continues. The district's bond rating recently reached its highest level in over 40 years, reflecting its commitment to strong fiscal management.