Malefactors pilfered approximately $700,000 from the Philadelphia school district's financial system in 2024, as per the city controller's announcement.
School District of Philadelphia Faces Cyberattack, Loses Nearly $700,000
In 2024, the School District of Philadelphia experienced multiple cyberattacks, according to Christy Brady, city controller. During a news conference at the Municipal Services Building, Brady revealed that hackers diverted nearly $700,000 from the district's banking system to their own accounts.
The unauthorized transactions were discovered during the annual audit of the school district's fiscal year 2024. The district's Automated Clearing House (ACH) system, used for electronic funds transfers, showed discrepancies. These discrepancies were later reported to Brady by the school district as part of the final review and feedback process during the audit.
Brady provided details about the cyberattack, stating that four instances of fraudulent ACH payments occurred last year. A transfer for $563,151 was made for flood damage repair work on March 12, 2024. Additionally, transfers totaling $126,056 were made for compensatory services on Feb. 6, Feb. 27, and March 8.
The ongoing investigation has not yet led to the recovery of the stolen funds or the identification of the perpetrators. The vendors involved, as well as the financial institutions affected, have not been publicly identified.
Schools Superintendent Tony Watlington Sr. and City Councilmember-at-Large Isaiah Thomas, chair of the education committee, were also present at the news conference. Both expressed their commitment to transparency and stated that they have implemented measures to enhance internal controls in light of the rise in cyber fraud.
The district's system typically pays vendors using paper checks unless requested otherwise. However, in this case, individuals or entities were able to hack into the system and request wire transfers.
Brady submitted her findings to Pennsylvania Attorney General David Sunday, and the incident is being jointly addressed by various governing agencies. The controller's office, which serves as the chief auditor of the city and the School District of Philadelphia, is an independent entity.
Watlington emphasized the district's strong fiscal stewardship and the focus on financial discipline in spending. However, the district is bracing for potential cuts in federal spending on education by President Donald Trump's administration.
The School District of Philadelphia has historically reported clean audits with no significant issues. Recently, it achieved its best credit rating in about 40 years, reflecting its improved financial health.
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Technology often intertwines with general-news events, and the School District of Philadelphia's cybersecurity issue, where nearly $700,000 was stolen through a cyberattack, stands as a prime example of this intersection. The crime-and-justice aspect arises from the unidentified hackers who diverted funds from the district's banking system, adding to the complexities of these modern-day threats.
