Act 141 and School Financial Recovery at a Glance

Act 141 of 2012 (Pennsylvania House Bill 1307) allows the Pennsylvania Department of Education (PDE) to declare school districts that have received an advance of the state basic education subsidy or met certain other criteria to be in financial distress. School districts may be declared in Moderate Financial Recovery Status or Severe Financial Recovery Status. The Secretary of PDE will appoint a Chief Recovery Officer (CRO) for each district in financial recovery status. The CRO is charged with taking input from the School Board and the community to develop a recovery plan to lead the district into financial solvency and position it for academic success. The law also requires the PDE to establish the Recovery School District Transitional Loan Program, which allows school districts in financial recovery status to apply for an interest-free loan in order to implement parts of their financial recovery plan.

The Commonwealth of Pennsylvania declared the Chester Upland School District to be in severe financial distress and appointed Joseph P. Watkins to serve as CRO to improve academic performance and bring financial stability to the district on August 16, 2012. The state Secretary of Education appointed the CRO under the provisions of Act 141, which required the District to accept his appointment; the School Board voted to accept the CRO on August 23, 2012.

Act 141 provides 30 days to complete the recovery plan, but allows for an extension with the approval of the Commonwealth’s Secretary of Education. In the case of Chester Upland School District, an extension to October 16, 2012 was approved by Pennsylvania Education Secretary Ronald Tomalis.

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