Schools to get budget help

City government and state officials to assist in revising flawed document

April 12, 2007|By Sara Neufeld | Sara Neufeld,sun reporter

The Baltimore school system will revise its flawed $1.2 billion budget with help from top financial managers from the city government and the state education department, officials announced yesterday.

But accounts differed over how much help will be provided by Edward J. Gallagher, the city's finance director, and Mary Clapsaddle, assistant state superintendent for business services.

William Reinhard, a spokesman for the Maryland State Department of Education, said the review is designed to help the school system better format its budget before a community meeting next week. He did not offer specifics about what the reformatting will entail.

"We will not be verifying numbers," Reinhard said. "We will not be doing any kind of audit to see if the numbers all add up. We simply do not have that kind of time between now and then."

Mayor Sheila Dixon, however, said that Gallagher "has committed to go through the entire document."

The outside help comes in response to a Sun review that found dozens of errors and tens of millions of dollars in discrepancies in the budget the city school board approved for the 2007-2008 academic year, as well as in this year's document.

In dozens of cases in both documents, the amount for salaries does not match the number of people who are to be paid. If the figures in next year's budget were correct, at least 460 employees would earn more than $200,000 a year on average, while more than 2,000 employees would earn less than $9,000 a year.

The school system has announced that its budget will be reviewed by an "independent third party" before an April 19 meeting at which officials will address issues in the Sun article and try to restore public confidence.

City Councilman Keiffer J. Mitchell Jr. demanded yesterday that Dixon - one of his opponents in this year's mayoral election - personally review each line of the budget. "We're already ahead of that," Dixon said later in response. "Mr. Gallagher is reviewing the draft as we speak."

Mitchell and Councilman Kenneth N. Harris Jr., a candidate for council president and chairman of the council's education committee, have called for a freeze on city funding to the schools until the budget questions are resolved. Harris asked city Comptroller Joan M. Pratt to audit the school system.

Pratt said yesterday that her office will not likely conduct an independent audit of the schools budget, but she said the city auditor, Robert L. McCarty Jr., will work with the Dixon administration's financial department in its review.

"We want to partner with the director of finance to determine if any action needs to be taken," Pratt said. "I'm requesting that the city auditor [meet] with the director of finance. It's my understanding that they're going to review the budget. I just don't want a duplication of effort between the city agencies."

Mitchell has used the budget dispute to bolster his argument that the school system should become a branch of city government as it was before 1997. That year, the city ceded partial control to the state in exchange for increased state funding, but critics say the arrangement has left both sides unaccountable for results.

Dixon said that reverting to a city-controlled system is "something to explore," but the state would need to guarantee that it wouldn't cut its increased funding. Mitchell is proposing that the school board, now jointly appointed by the mayor and the governor, be abolished and replaced with a schools chancellor reporting directly to the mayor.

While many elected officials have called for sanctions against the city schools since Monday's Sun article about the budget problems, Dixon and Gov. Mayor Martin O'Malley are standing by the school board.

In a brief interview yesterday, Dixon attributed the problems in the budget to a change in format this year. School system officials have said they were trying to make the budget more transparent and user-friendly, and they wanted it to reflect a new management structure.

Asked why the council and mayor approved the budget for the current school year last spring when it contained similar problems, Dixon said that budget had been corrected.

But The Sun found dozens of discrepancies in the final version of the budget that was printed and distributed to the public. For example, the document lists $4.4 million for the salaries of 15 employees in the chief academic officer's administration, amounting to more than $290,000 each. The same page, listing comparable figures for the previous two years, shows $2.2 million in salaried money from 2006 with zero employees.

At a news conference Tuesday, O'Malley said he suspected the newspaper coverage of the budget problems has been "overblown."

"Their budget has been in a constant state of revision for the last year as the Baltimore City Board of School Commissioners tries to have them slice it and dice it and present it in a more user-friendly, open, transparent way," he said. "But I don't think there's fundamental problems there, and I think it's overblown, and I think that's what eventually will come out in the wash."

At the same time, the governor acknowledged: "They have not yet gotten to a point where they can put forward the sort of budgets that we see and would expect from other public institutions when they are reviewed by legislative bodies."

Sun reporters John Fritze and Jennifer Skalka contributed to this article.

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