Audit: Baltimore City Public Schools Playing Fast and Loose with Public Funds

In 2004, after Baltimore City public schools reported a $58 million deficit, Maryland legislators instituted an audit of state school systems every six years. Auditors found that Baltimore school officials sent checks to deceased staff, overpaid employees, and paid contractors for services that had not been rendered.  

Preliminary findings from the city's second sexennial audit, obtained by the Baltimore Sun, reveal more fiscal hjinks:

The Baltimore school system spent more than $2.8 million on overtime in fiscal 2010, even though it was doubtful that employees worked all of the hours for which they were paid.

Three employees earned a combined $250,000 in salaries while working for both the school system and a state agency during the same hours.

And the school system failed to collect nearly $1.5 million in debt dating to 2009, including $336,000 in bonuses paid to employees who hadn't earned them.

…The auditors also found financial oversight to be so inadequate that officials paid millions of dollars in contracted work that wasn't verified, lost 1,400 computers and allowed dozens of employees access to adjusting payroll even though it wasn't required for their jobs.

…School board oversight was lacking, particularly in its ethics and financial disclosure policies. Auditors found several instances of conflicts of interests. The system paid one employee for both part-time work in the central office and nearly $34,000 as a contractual vendor for instructional services. The employee owned the vendor business—and had the authority to approve purchases in the school system's automated procurement system.

In addition, 105 school system employees had home addresses that matched the addresses of vendors hired for instruction, special education and consulting services. A review of eight procurement payments showed that seven went to vendors who were also system employees.

…Oversight of contracts and procurement was lacking. For example, auditors found that the system continued to pay a contract for special education instruction that expired in 2008 and was never renewed by the school board, for a total of $6.9 million through June 2010. The audit doesn't specify whether any work was done after the contract expired.

The system failed to verify bills submitted by school bus contractors. A review of monthly invoices showed that contractors billed for driving time and mileage totaling nearly $350,000, using the exact same hours and minutes for about 50 buses every month. And, in one instance, a contractor bus aide reported that no students were transported for two days due to a water main break, but the company still billed the system $327 for each day.

According to the state's acting legislative auditor, school officials "might have [an] explanation for things or provide documentation that would basically cause the finding to go away."

Reason writers have explored the notion that public schools may not be underfunded and covered poll results suggesting the public is underwhelmed with government schools.