School audit's results mixed

Financial practices mostly sound, but state officials find weak recordkeeping

October 10, 2007|By Ruma Kumar | Ruma Kumar,Sun reporter

The Anne Arundel County public schools have generally solid financial practices, but spotty recordkeeping for inventory and inadequate safeguards for employee credit card use make the school system vulnerable to theft or fraud, according to a legislative audit released yesterday.

The report, completed by the Office of Legislative Audits as part of its state-ordered review of all 24 Maryland school systems, noted Anne Arundel's sound management of federal funds and policies governing payroll. But it also found deficiencies, saying the district had no record of receiving more than $97,000 in textbooks, couldn't account for $170,000 in grounds equipment and had recorded $1,321 in supplies as being worth $111,269.

In written responses to the roughly yearlong audit, Superintendent Kevin M. Maxwell said the school system has improved credit card procedures and created committees to study card use and setting limits. Maxwell also wrote that the district's work to create a strategic facilities plan has improved the district's planning for addressing lingering facilities and maintenance needs.

Greg Nourse, the district's assistant superintendent for business and finance, said he couldn't comment until he had more time to study the audit's findings.

The audit recommended more precise recordkeeping after a random sampling found evidence that some invoices were incorrect or incomplete. In one instance, a review of 10 items with a total value of $154,214 showed incorrect prices for six of the items. The total value of the six items was recorded as $111,269. It was really $1,321.

The state reviewers also found the district had spent $800,000 on a human resources consulting service in July 2005 but hadn't received the mandatory board approval for the contract and did not get a proper accounting of hours from the consulting firm proving that it had worked the hours for which it submitted bills.

In his written response, Maxwell said he has strengthened the procedure for getting contracts to the board "to minimize human error."

The audit also asked the district to adopt a more comprehensive approach to tackle its more than $1 billion in deferred building maintenance. Though the district keeps lists of the projects that need attention, legislative auditor Bruce A. Myers, who oversaw Anne Arundel's audit, said the district didn't "have a plan on how to actually get those projects done."

In the transportation department, software the district had purchased in 1994 to allow the district to more efficiently fill buses and develop routes is not being used because employees complained it "wasn't user-friendly," the audit said.

The department had paid $305,000 in licensing and mapping fees through 2005 on the dormant system, the audit said.

Myers said Prince George's and Carroll county schools are successfully using the system. In Anne Arundel, he said, he was concerned to find that 21 of 68 buses reviewed by auditors operated at 19 percent to 69 percent capacity. Myers said the software could help run fewer buses with more riders and save money for the district.

The audit also called for better safeguards for spending. State reviewers found that more than 400 of the 1,700 credit cards issued to school employees had not been used during a six-month period and that supervisors did not always properly review transactions.

The audit's review of $10,098 in purchases found that in two instances supervisors did not sign off on purchases, suggesting stronger oversight needs to be in place.

"Credit cards open any organization - state, federal, local - to risk," Myers said. "If all those credit cards aren't being used, then the district needs to ask itself, `Do all these people really need cards?'

"The district is just exposing itself to possible risk. It's entrusting these individuals to spend taxpayer money wisely."

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