$18 million restored for city schools

Grasmick makes pledge as negotiations begin on alleged misuse of funds

September 01, 2004|By Liz Bowie | Liz Bowie,SUN STAFF

State education Superintendent Nancy S. Grasmick promised yesterday to release $18 million to Baltimore schools as "a display of faith" that negotiations over the misuse of federal money would be resolved in talks among federal, state and city education officials.

Grasmick made the announcement during a private meeting in Washington yesterday on the first day of negotiations over a state audit released this summer that asserted the city had misused $18 million in federal funds between 2001 and last school year, according to Ronald Peiffer, deputy state superintendent for academic policy.

Grasmick had said in July that she was withholding that amount of money from the city because she had "a fiduciary responsibility for federal dollars" and wanted to force city school officials to go into negotiations with the federal government to resolve the issues quickly.

City school officials have contended that not all the money was misspent. In some cases, they said, the state had given its approval to plans detailing how the money would be used.

The current negotiations among city, state and federal officials are intended to arrive at a resolution that could include requiring the city schools to pay back some or all of the money.

Grasmick was criticized this summer by city officials and school board members who contended that she was taking a particularly tough stand by withholding the funds before the negotiations.

Entering the new school year with an $18 million hole in the budget would have been a problem for the financially troubled school system, which is carrying a $58 million deficit and owes City Hall $8 million in loans.

In addition, the state is under pressure from a state Circuit Court judge who has ordered the city and the state to find ways to provide at least $30 million more for educational programs this year.

Although the $18 million Grasmick said she would release does not help satisfy the judge's order, it would help prevent the system from having a cash flow problem this school year.

Neither Grasmick nor the city schools chief executive officer, Bonnie S. Copeland, could be reached for comment. In a statement released by Copeland and Grasmick, they said they would jointly name a steering group including leaders from the State Department of Education, the Baltimore schools and representatives of the U.S. Department of Education. The steering group will then set up further negotiations and a timetable for working out differences.

Peiffer said the process is expected to identify why the system was spending money improperly and help it establish guidelines for using the money appropriately in the future.

The state audit found that Baltimore had spent its Title I dollars - federal money designated for poor children - on children in schools that were not considered as needy. Ninety-seven of Baltimore's 184 schools are designated Title I schools.

Though the state found no evidence of fraud, Grasmick said city school officials did not have adequate controls on spending.

Of its $900 million budget, the city receives about $51 million in Title I dollars each year.

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