A study by Education Management Group has found Penn Hills School District needs to address serious financial issues and change the way it operates.

Donald Boyer, consultant, presented Education Management Group's findings at last week's school board meeting as part of a management assessment study.

At the May 6 school board meeting, Education Management Group will recommend viable alternatives for the board to consider, said Teresita Kolenchak, district spokes-woman.

Boyer said at last week's meeting that the district needs to address its finances because current figures show expenditures are about $5.5 million above expected revenue for the 2008-09 school year.

The district has two options -- raise property taxes or cut programs. Boyer suggested the district not raise taxes.

The Schools of Focus program is one way the district can start cutting expenses because the program doesn't seem to work, he said.

The program has not been funded sufficiently to make it work, but the district should not throw in money now to change the situation, Boyer said.

All six Penn Hills elementaries have Schools of Focus themes, such as the environment at Forbes and entrepreneurship at Dible, and parents and guardians can select which elementary school their children attend.

Having Schools of Focus causes a nightmare for transportation and increases transportation costs significantly, he said.

The district also should consider eliminating the vocational education program at the high school and send vo-tech students to Forbes Road Career & Technology Center, Boyer said.

The primary challenges facing the district are too many employees, too many underutilized elementary schools and collective bargaining agreements, the study found.

Several employees are performing administrative duties as members of the teachers' bargaining unit, according to the consultant's report.

The district only has 6.17 percent of its budget as discretionary expenses because salaries, benefits, purchased services, debt service and transportation take up 93.83 percent and they are covered by multi-year contracts.

To get expenses under control, the study suggests the district adopt balanced budgets, retire four to 15 school buses to make transportation more efficient, make efforts to control personnel costs, use technology to reduce costs and improve instruction and consider consolidating its elementary schools.

The state average for school districts' personnel costs is 63.34 percent.

Penn Hills' personnel costs are 72.71 percent of the district's budget, according to the study.

The district should have a fund balance of 6 to 8 percent of its annual expenses or 8 to 10 percent of its annual revenues and not use it to balance future general fund budgets, according to the study. Penn Hills had 0.19 percent of its annual revenue for a fund balance in 2006-07.

Saving money and accommodating the children could occur if the district had no more than three elementary schools, instead of its current six, according to the report.

Education Management Group suggests the district use Penn Hebron Elementary Academy as a single facility for kindergarten through fourth grade and move grades six through eight to the elementary schools and ninth grade to the vo-tech area at the high school.

The district should assign elementary head teachers to full teaching schedules, eliminate administrative assistant positions that are not secretarial positions at the high and middle schools, cut high school courses with fewer than 10 students unless the courses are required and replace study halls with reading and math support sessions at the high school, according to the re-port.

The group's review of the schools expresses concern that most of the asphalt tiles in the elementary classrooms are asbestos and are showing signs of cracking and paint on walls at William Penn Ele-mentary School appears as though it could be lead-based.

Education Management Group also found that the district does not have a written curriculum for kindergarten through 12th grade.

"The lack of a written curriculum can result in inconsistencies in what is taught at each grade level and what is taught by each teacher at a grade level. The absence of a standardized curriculum may be a factor in some students' inability to achieve Adequate Yearly Progress on the Pennsylvania System of School Assessment," the report stated.