Schools still await outside audits of pacts

Handling of 3 contracts spurred query in spring

September 22, 2000|By Liz Bowie | Liz Bowie,SUN STAFF

More than three months after Baltimore school officials hired an accounting firm to look into questions raised about the handling of three school contracts, they still don't have the completed audits.

"I just think we are being thorough ... making sure we peel away at the onion a little," said city schools chief Carmen V. Russo.

For the past two months, school officials have been saying the independent audits were about to be released, and board member C. William Struever acknowledged this week that the reports have taken longer than expected.

Though focused on the specifics of what went wrong in the handling of multimillion-dollar contracts, the audits also were expected to explain the school system's financial management problems that came to light this spring.

State officials and legislators soon will look at whether the school system has begun to turn around the mismanagement, as they consider a school board request for an $101 million increase in state aid.

Struever said he thought the first of the audits, one that looked at Carnegie Morgan Resource Management's oversight of an energy contract, would be released at next week's public board meeting.

The school board ordered the first audit in April after the cost of a technology contract ballooned from $5.2 million to $11.4 million.

Up to that point, the board had been paying that contractor, Information Control Systems Inc., the additional money for overruns without public discussion and without revising the contract.

In approving an increase in April, the board decided to monitor the work more closely and to have an internal auditor look at the contractor's performance. But before that internal audit was complete, the school board decided to have the firm of Arthur Andersen finish the work.

In June, after The Sun detailed the handling of two lucrative, no-bid contracts to manage and finance a $12 million program to save energy in 30 schools, the board again looked to Arthur Andersen to review the contracts.

The board voted tohire Andersen to look at those contracts, one to Carnegie Morgan, the other to First Municipal Credit Corp.

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