Auditors

Baltimore liquor board chairman Mark S. Fosler has resigned as head of the state agency and appears to be eyeing a subordinate position as liquor inspector, according to agency officials and sources familiar with the hiring process. At liquor board hearings at City Hall Thursday, commissioner Edward Smith Jr. took over in Fosler's absence. Smith confirmed Fosler's departure but did not elaborate. Fosler recently took the civil service exam to become a liquor inspector and a short time later quit his post as liquor board chairman, said Samuel T. Daniels, the agency's executive secretary.

HFS Inc. had little reason to believe that merging with CUC International Inc. wouldn't boost earnings.HFS had put together a broad array of businesses -- real estate and hotel franchising, car rentals, mortgage banking, corporate relocation -- and had made money at a rate impressive even by 1990s standards.Merging with a direct marketing powerhouse like CUC would mean more of the same, or so HFS executives thought. Then they discovered that CUC had "simply invented" hundreds of millions of dollars in income.

"The new challenge for Carroll is to expand teacher resources in the classroom, to get students the help that they need to achieve.""Few suspected any financial hanky-panky by the school system, even with a secret county grand jury investigation... The clean audit should help to allay remaining doubts."THE CARROLL County school board finally got some good news about the job it's doing. Independent auditors apparently found everything copacetic in the finances of the school system. Every expense and receipt documented and properly accounted for.While auditing firms are increasingly open to legal second-guessing, there's nothing apparent to suggest that the school board auditors -- Wooden & Benson, a Towson firm -- are missing anything.

Maryland State Police are doing a "dramatically" better job of completing criminal background checks of handgun purchasers, General Assembly auditors have concluded.The legislative audit, released yesterday, was done after a breakdown earlier this year allowed dozens of felons and other unqualified buyers to purchase guns.Conducted between June and August, the audit found that state police were performing all handgun checks within the legally mandated seven-day waiting period.In January and February, state police were routinely failing to conclude checks within seven days and were not issuing required "hold orders" that would have prohibited merchants from completing those gun sales, the audit said.

Basic money-handling shortcomings have exposed several Anne Arundel County government departments to embezzlement and costly errors, the county auditor says.Audits repeatedly recommend that departments handling payments from the public divide money-taking and record-keeping duties among several employees to provide a systems of checks and balances.But sloppy bookkeeping often goes unchanged until an obvious problem surfaces."You are creating an opportunity for one person to take money and cover it up," county auditor Teresa Sutherland said.

State auditors are challenging a company that runs Maryland's small-business loan programs for using part of the proceeds from its state contract to make political contributions, including some to lawmakers who sponsored legislation extending the contract.Stanley W. Tucker, president of MSBDFA Management Group Inc., confirmed this week that state auditors have questioned the propriety of giving political candidates any of the nearly $1 million a year the company receives from the state.Although it is not illegal for Tucker's private company to make political contributions, state officials said they are concerned about the perception that public money is being funneled into campaign coffers.

A committee of parents, teachers and administrators is to review an independent audit that found Anne Arundel County educators are wasting money by putting students who are struggling readers into costly special education programs for mentally disabled and autistic children.The panel was appointed by Carol S. Parham, superintendent of the 74,275-student county school system, who announced the appointment of the 27-member committee last night.Parham asked the committee to report to her by March 1 with recommendations and cost estimates for revamping the special education program.

As the ruble fell like a rock and the Duma fought the nomination of Viktor S. Chernomyrdin for prime minister, 11 Russian auditors boarded a plane headed for the United States.Leaving the crumbling economy behind, they arrived in Maryland for an intensive three-week course in the American ways of accounting.Politically speaking, this may not be the best time to hold up the United States as a role model. But in financial terms, even with the roller-coaster U.S. stock market, this country is far ahead of Russia, where the government of the emerging free market has yet to learn how to collect taxes and much of the economy is based on bartering.

An article in yesterday's Maryland section about a legislative audit of the Developmental Disabilities Administration incorrectly reported that state Budget Secretary Frederick W. Puddester said it was a shame auditors focused on only the negative aspects of the agency's performance. In fact, Puddester said it a shame news media focus on only negative aspects of the agency's record.The Sun regrets the errors.The state agency that cares for developmentally disabled Marylanders lost millions of dollars through mismanagement at a time when thousands of its highly vulnerable clients were languishing on a waiting list for want of money to provide services, legislative auditors have concluded.

The former bookkeeper of a private school in Arnold has been sentenced to 18 months in jail and ordered to repay the $300,000 she embezzled from Chesapeake Academy over nearly four years. But how much of that money the school will see is questionable.Anne Arundel County Circuit Judge Clayton R. Greene Jr. also ordered a weeping Patricia Anne Mason, 40, to perform 500 hours of community service while she serves five years of probation after her prison term."She is never going to be able to make full restitution," said her attorney, T. Joseph Touhey.

The agency that runs a voluntary retirement plan for state employees failed to adequately disclose a $48 million loss in the market value of a conservative investment pool, according to an audit released Monday. A toughly worded report suggests that the staff and board of the Maryland Teachers and State Employees Supplemental Retirement Plans had been lax in their oversight of private firms that manage many of the plan's investments. The auditors also said plan managers were unable to answer many of their questions or provide relevant documents.

Legislative auditors have criticized the State Highway Administration for lax controls over its contracts, equipment and spending in a report that found continuing problems in the way the agency keeps track of public property. The report, released late last week, found that the agency maintained inadequate controls over about $25.7 million in materials and supplies during the budget year that ended June 30, leaving auditors unable to account for articles worth hundreds of thousands of dollars.

A former employee of the University of Maryland University College improperly used a corporate credit card to purchase $8,800 in electronic equipment and had it shipped to her home, according to a state legislative audit released last week. The audit says that in August and September 2005, the employee used the card to buy laptops, music players, cameras and other items. Upon discovering those transactions, auditors found four other purchases worth $2,800 that could not be accounted for on campus.

The Justice Department is threatening to withhold up to $8.2 million in stimulus money from Baltimore because of poor record-keeping for federal grants the city received a decade ago. Until the city can account fully for how those federal funds were spent, it could be blocked from receiving money that Mayor Sheila Dixon is counting on to hire police and pay for other crime-fighting measures. The Justice Department notified Dixon in a recent letter that the city is considered "high risk" and may not draw more Justice Department money until submitting documents on grants received in 1996, 1998 and 2000.

The director of student activities at Baltimore City Community College used a campus credit card to make $7,250 in "questionable purchases," including an $800 digital camera, electronic game consoles, video games and DVD players, according to a legislative audit report released yesterday. College officials told auditors that the consumer items were given away to students at school-sponsored events, but they were "unable to document the specific students to whom prizes were given or the related events," the report said.

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.

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.

A project manager at the state Department of the General Services has been referred to the attorney general's office for criminal investigation because of repeated conflict-of-interest findings by legislative auditors, officials said yesterday. It is the second audit finding in three months of potential employee ethics violations at the Department of General Services. The state agency manages state buildings and hires and supervises private contractors who build facilities for Maryland government agencies with public money.

The legislative audit that detailed contracting problems at Morgan State University has raised lots of questions. But university officials have failed so far to give satisfactory answers. That's especially disturbing because the auditors were concerned enough about irregularities to refer the matter to the state attorney general's office for possible criminal charges. At the least, a follow-up audit is needed and greater oversight of Morgan building contracts should be restored - until the university can show that it can be a better steward of state funds.

Legislative auditors who uncovered serious financial mismanagement at Morgan State University want to broaden their investigation to more construction contracts at the public Baltimore campus, a key lawmaker said yesterday. Del. John L. Bohanan Jr., a St. Mary's County Democrat, said he spoke with auditors before a contentious three-hour hearing he chaired yesterday. During the hearing, legislators sharply criticized Morgan officials for lax financial oversight of public money and raised the possibility that the General Assembly could rescind Morgan's hard-won authority to manage its own construction projects.