Baltimore school officials assured state lawmakers yesterday that their financial oversight has vastly improved in the past two years, since the period studied in a legislative audit that found controls severely lacking.
School board Chairman Brian D. Morris called the audit "a very good historical review of where we were at that time."
Timothy R. Brooks, the audit project manager, said his team also examined the first half of last school year and, when possible, went beyond that. He said auditors found problems with bank statement reconciliations in July.
Morris, schools Chief Executive Officer Bonnie S. Copeland and her top staff appeared before the Senate Budget and Taxation Committee and the House Appropriations and Ways and Means committees for a joint hearing on the audit, which was released Tuesday.
The audit primarily studied the 2003-2004 school year, when the school system laid off 1,000 employees and accepted a $42 million city bailout to get out from under a financial collapse.
The audit found, among other things, that the system had sent checks to dead employees, let people take vacation and sick time they hadn't earned and paid to transport special-education students to school on days they were absent.
Auditors made 23 recommendations covering every area they studied. Copeland said the system has implemented 13 of those recommendations and made significant progress toward implementing nine others, leaving one. She said the system has recovered all but $600 of checks issued to dead employees.
"We hope we will never again see reports of deceased employees being paid," she said.
The chairman of the city's Senate delegation, Nathaniel J. McFadden, said he would introduce legislation to require a follow-up review in Baltimore and Maryland's other 23 school systems to ensure that problems found by auditors are corrected.
A law passed in 2004 requires the state Office of Legislative Audits to conduct a thorough financial review of all 24 systems within six years. The law specified that the two systems with deficits at the time, those in Baltimore and Prince George's County, were to be audited first.
The Prince George's audit, released Wednesday and also a subject of the hearing yesterday, contained many findings similar to those in the Baltimore audit.
In both systems, "we were taken aback by some of the problems we found," said Gregory A. Hook, director of the performance audit division at the Office of Legislative Audits.
Because school systems had told legislators that they were under constant scrutiny, Hook said, auditors expected that certain basic controls, such as contract monitoring, would be in effect.
John Walker, the Baltimore school system's interim chief financial officer, said those controls exist now. He also said he will investigate five cases in which auditors found children of system employees were receiving taxi rides to school without documentation that they had disabilities making that service necessary.
Yellow Transportation, one of two companies that provides taxi services to special-education students, released a statement yesterday disputing an audit finding that the system was violating state regulations by paying flat rates, rather than metered rates, for taxi services.
Most of the legislators at yesterday's hearing spared Copeland and her staff from tough questioning, but Sen. Rona E. Kramer, a Montgomery County Democrat, demanded to know what sanctions had been imposed on employees who lost copies of contracts, among other missteps.
"I can assure you there have been consequences," Copeland said.
sara.neufeld@baltsun.com
