A House of Delegates panel decided yesterday to strip $3 million in planning money for Morgan State University's business school from next year's budget and to restrict another $3 million in building projects until the school overhauls its procurement processes, which are under criminal investigation by the state attorney general's office.
Yesterday's action by the House Appropriations Committee's education subcommittee was the strongest response yet by the legislature to an audit report that found millions in questionable contracts at the Northeast Baltimore school. University officials have said they have taken appropriate action.
"I am disappointed," said Abraham Moore, the school's vice president of finance, who attended the meeting but did not address lawmakers. "But as a servant of the state, I accept whatever the state decides."
If approved by the full House, the actions would still have to be approved by the Senate. That body has so far taken no punitive steps against Morgan State as a result of the February audit detailing "serious deficiencies" in the university's dealings with private contractors.
Sen. Ulysses Currie, the Prince George's County Democrat who chairs the Budget and Taxation Committee, said the Senate will "reject what the House has done" and will also push to keep the $3 million in funding for the business school. That money is earmarked for planning for the $80 million project.
Auditors found that Morgan State officials padded a construction contract with a $3.1 million cushion and then used those funds to pay the same contractor, Baltimore-based Whiting Turner Contracting Co., for different work without getting state approval.
Whiting Turner was also overpaid $825,250 by the school in duplicate billings, according to auditors. The school also appeared to artificially divide other projects into smaller pieces to avoid scrutiny by the Board of Public Works, auditors said.
Despite repeated apologies from Morgan State officials and promises that corrective actions have already been taken - including the dismissal of a senior construction manager - the audit has undermined confidence in Annapolis with the school's administration.
Yesterday, the House panel appeared divided between lawmakers who wanted to more severely restrict Morgan State's independence and those worried about stalling work on a campus undergoing major revitalization.
"What we have here is gross misconduct," said Del. Galen R. Clagett, a Frederick County Democrat who runs a property management firm. "We have tinkering with bids, overpaying contractors, overpaying employees, changing the scope of work, and the list goes on and on. ... I would seek more than a slap on the wrist."
Clagett suggested withholding all $11 million in capital projects scheduled at Morgan State in the next fiscal year until it has addressed the auditor's findings to lawmakers' satisfaction. "My position is we hold it all until we fix it, because it ain't half broke, it's all the way broke," he said.
But Del. Melony Ghee Griffith, a Prince George's County Democrat, objected to that approach. "I'm not sure we want to tie up all of the projects," she said.
Del. John L. Bohanan Jr., a St. Mary's County Democrat who chaired yesterday meeting, initially proposed restricting about $750,000 until an overhaul of Morgan State's procurement processes is approved by the Board of Public Works.
Facing dissent from Clagett, Democratic Del. Henry B. Heller of Montgomery County and Republican Del. Nancy Stocksdale of Carroll County, Bohanan recessed the public meeting for a private discussion. When they emerged 10 minutes later, the lawmakers had decided to restrict an additional project - the $2.3 million renovation of a Morgan State-owned museum in Bolton Hill - until the internal overhaul was complete.
Under the terms of the restrictions adopted by the committee, Morgan State would be required to hire an independent management consultant to review the university's capital project management and recommend comprehensive reforms in order to receive the $3 million.
Then the university would have to revise its internal processes accordingly and submit a report of its actions to the legislature and the Office of Legislative Audits. Finally, the Board of Public Works - which comprises Gov. Martin O'Malley, Treasurer Nancy K. Kopp and Comptroller Peter Franchot - would have to approve the reform plan before Morgan State would get the money.
Bohanan said he believed the entire process could be completed within six months.
But Moore, the university official who approved the contracts criticized by auditors, said he worried that the requirements would delay the campus' renovations. "Anything that prevents us from getting resources prevents [projects] from going forward," he said.
House Majority Whip Talmadge Branch of Baltimore sat in on the meeting and praised the committee's decision as "not heavy-handed" and one that deals "no real penalties, from what I can see." But he cautioned that if Morgan State does not undertake serious reform, "next year, they'll deal with the committee again."
Branch acknowledged that yesterday's actions in the House are likely to face opposition in the Senate, both on the reform mandate and the delay of the business school. "I'm sure it will end up in conference with some kind of compromise," he said.
Sen. Edward J. Kasemeyer, a Howard County Democrat who holds a position roughly equivalent to Bohanan's, said he wants to wait until the attorney general decides whether Morgan State officials broke criminal laws before making a "final determination" about what action the General Assembly should take. "We don't want to be premature in passing judgment," he said yesterday evening.