After a year of public pressure to improve the Baltimore school system's financial management, city and education officials are expected to announce today a three-step plan to make the district operate more efficiently and keep its spending under control.
Mayor Martin O'Malley and new interim schools chief Bonnie S. Copeland said they will hire an accounting firm to analyze the system's budgeting and financial reporting, adopt a list of recommendations from the business community and re-establish SchoolStat, a statistical analysis program to flag inefficiencies.
"We want to be effective in managing our resources," Copeland said.
Over the past two years, the city schools have amassed an estimated $41 million deficit, and officials have trimmed spending this year in an attempt to cut the deficit in half by June. The cuts have been painful at the school level, where budgets have been reduced by at least 5 percent this year.
Former schools chief executive officers have tried to identify waste in the system, but Copeland said this is the first systematic look at the district's finances in recent years.
Even though instruction is the priority, Copeland said, the school district cannot focus on education without first straightening out its budget.
O'Malley said he thinks part of the problem results from the General Assembly's making the city schools independent of the city government in 1997.
"By a stroke of legislative pen we didn't create a finance office that was capable of administering payroll and staying on top of the budget process. That failing was masked by the increased dollars coming in," O'Malley said. The school system must put its financial house in order, he said.
The state, the city and the school system are sharing the $150,000 cost of an evaluation by the accounting firm Ernst & Young. The evaluation will look at how the school system puts together its budget, its financial controls and how it reports its finances.
One problem has been that principals and heads of major departments are not sure how much money they have spent during the year. As a result, overspending goes unnoticed until the end of the school year.
This year, principals did not receive their budgets until after July 1, when the fiscal year began.
A committee of state educators, city school administrators and city staff members will oversee the Ernst & Young evaluation.
In addition, the system plans to address problems identified in a report by the Greater Baltimore Committee, released this summer, that listed recommendations for improving financial accountability.
Copeland said the system will announce a timetable and the steps it will take to address the problems the GBC outlined. She said the information will be posted on the city schools' Web site within a week.
Using SchoolStat, the school system will begin collecting statistics on such things as student and employee attendance, the use of substitute teachers, overtime and special education students.
Copeland said the district hopes that by comparing projected enrollment with the number of students who arrive at schools next week, the system will have a better idea of which schools are crowded and which have small class sizes. It can then shift teachers early in the school year to reduce disruption.
SchoolStat will be modeled closely on CitiStat, a system for monitoring the performance of city agencies. CitiStat staff members will help re-establish SchoolStat, and the school district's chief of staff, Jeff Grotsky, will oversee the program.