www.baltimoresun.com/news/maryland/education/blog/bal-city-school-officials-working-out-29-million-enrollment-error-20131211,0,1435867.story

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City school officials reconciling $2.9 million enrollment error

Error caused city to overestimate maintenance of effort payment

Erica L. Green

2:21 PM EST, December 19, 2013

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Baltimore school officials may have to cut the city government a $2.9 million check after the school system provided inflated enrollment numbers for the city's payment to the district last year.

According to city officials, the school district reported that 79,849 students were to be funded in the city's annual per-pupil contribution to schools, known as the maintenance of effort, when the number should have been 78,871. The 978-pupil discrepancy, which threw off the per-pupil expenditure by $30 per-student, could have cost the city millions, officials said.

And beginning this year, the city has changed the way it estimates its annual payments to prevent any future errors. Rather than the head count provided by the district, the city will use enrollment numbers published and certified by the Maryland State Department of Education

Though the school system's error affected the city's fiscal year 2013 payment -- fiscal year 2014 started in July -- school officials were still hammering out how to resolve the error this month.

The school system called the discrepancy “an isolated error.”

But city government officials indicated that they not only had to supplement the loss, but had to set aside $10 million to compensate for faulty schools enrollment numbers over the past few years.

“Negotiations are ongoing between the city and the schools regarding maintenance of effort payments and withholdings over the last few years,” said city budget director Andrew Kleine. “We could be on the hook. We already put through a supplemental $2.9 million, which was related to an enrollment number error. We got bad enrollment numbers for our Fiscal 13 MOE calculation. That resulted in MOE that was higher than it should have been.”

Victor De La Paz, chief financial officer for the school system, said that both the city school system and government planned to appeal to the Maryland State Department of Education board to set the correct payment.

In any event, he said, the city school system will make sure the city doesn't lose any money as a result of the error. He said there was no impact to the school system's budget, because he did not plan on receiving the $2.9 million. And if the state rules that the city has to pay the additional money, he is prepared to pay it back.

The district also said the enrollment error did not impact state or federal funding it received tied to enrollment that year.

De La Paz said he was not aware of any other enrollment errors and was not sure why the city budgeted $10 million to cover them.

“This is the only error that we’ve been talking about, and there are different mechanisms that could reverse it,” De La Paz said. “We have a complicated financial relationship in the city, but it’s not related to enrollment.”

This isn't the first time the school system has had a close call with inflated enrollment numbers.

In 2007, the Baltimore school board overstated the school system's enrollment for the current academic year by 1,000 students. It was a mistake that could have had multimillion-dollar implications for the system. Enrollment errors also contributed to the infamous $50 million budget crisis the district faced several years ago.

erica.green@baltsun.com

twitter.com/EricaLG

Baltimore Sun Reporter Luke Broadwater contributed to this article.