"My expectation is for the CEO, Dr. [Andrés] Alonso, and the school board to take corrective action immediately," Rawlings-Blake said after the city's Board of Estimates meeting.
Rawlings-Blake, who championed a controversial bottle tax to raise funds for school facilities last year and has partnered with the system to raise $1 billion to overhaul its dilapidated infrastructure, said that much is at stake as the city looks to head to Annapolis again to ask for school construction funding.
"We're fighting for money and we're cashing in a lot of political chips to make the investments that we need to make in our school system. We cannot make those investments and we cannot go to Annapolis to seek additional funds if there's no confidence that the money is being managed responsibly. That's why this needs to be corrected," she said.
Alonso declined to comment Wednesday.
Among the 32 findings in the preliminary draft, which school officials said since have been reduced, were millions of dollars of unsubstantiated overtime and uncollected debts; overpayments to employees of accrued benefits; millions of dollars in contract work that was never verified; millions of dollars in unjustified salary adjustments; several conflicts of interest, including employees working for the school system and other state agencies; and 1,400 missing computers.
In responses to the preliminary findings, city school officials said they were developing policies and protocols to address many of the issues raised.
The preliminary findings drew the ire of several state and local political leaders, who said earlier this week that the findings evoked memories of the system's financial mismanagement before Alonso's arrival, including a $58 million deficit in 2004 that nearly depleted the city government's rainy-day fund.
In a state legislative audit reflecting the year of the deficit -- the latest released for the school system -- state officials noted similar issues. Officials found the system sent checks to dead employees, overpaid employees thousands of dollars with no attempt to recover the money, let employees take sick time they hadn't earned, forced no one to file an ethics form, and paid bills submitted for the transportation of students on days they were absent from school.
The new audit comes during a year that Alonso has had to defend a series of questionable expenses -- such as $78,000 paid to his personal driver in overtime, $500,000 in credit card expenses charged by administrators that included expensive dinners and travel, and a $250,000 renovation of an executive suite -- at the same time officials lobbied state lawmakers for more funding for its crumbling school facilities.
In addressing Alonso's leadership, Rawlings-Blake said, "We've made a tremendous amount of progress under Dr. Alonso. That being said, I'm sure he wants to rectify this just like I want him to. This is Dr. Alonso's responsibility as well as the school board, and both of them bear the responsibility for ensuring that the money that is appropriated for our schools is spent wisely."
At a school board meeting Tuesday night, Jimmy Gittings, the head of the city's administrative union, testified before the board, calling the audit's preliminary findings examples of "gross malfeasance" under Alonso's administration that would work against the system during the next General Assembly session.
"When you take that road on [Interstate] 97 down to Annapolis, you might not get the lump sum you asked for," Gittings said. "In fact, your budget might be cut."
Gittings also said he was "completely dumbfounded" by the board's decision to continue supporting the schools chief.
For the past six months, tensions have broiled between the two leaders, after Alonso sought to remove principals whom independent hearing officers had cleared of suspected cheating at their schools. He has also protested Alonso's decision to demote more than one dozen principals who received satisfactory evaluations.
He said the school board's continued support was to stroke "an ego of a man who doesn't give a damn about our children."
City school board President Neil Duke said the panel supports Alonso, who has led the school system since 2007 and whose contract was renewed in June 2011 for another four years.
"The board has every confidence in the abilities of Dr. Alonso to lead the school district," Duke said Wednesday. He declined to comment on the results of the audit until it is released.
The mayor also responded to assertions that mayoral control would increase accountability in the school system.
Under a city-state partnership formed in 1997 -- which afforded the system a large annual infusion of state funding -- the school board is jointly appointed by the mayor and the governor; the school board hires the CEO.
"The allegations of mismanagement and poor performance caused the state and the city to merge the partnership," Rawlings-Blake said. "Mayoral control didn't prevent it and, as it stands, neither does the school board and the CEO."
"The issue is having proper auditing, proper management and making sure we are doing the best that we can for our kids."