He said, however, that "the areas that we've identified as problems relate to big, fiscal impact areas."

"They improved over the past six years, but they still have a ways to go," Barnickel said. "Right now, they do have some fiscal management challenges. There are some areas where they really need to improve their controls, and make sure that fiscal accountability is established."

He said he believed most of the issues could be resolved in a short time, except for facilities. Auditors found that because of the lack of a facilities plan, the school system paid at least $7.5 million for space it wasn't using.

School officials said it has since remedied the problem with a $1 million, 10-year facilities plan the district commissioned last year to present to legislators. It will also be used to guide the closing and consolidating of schools this fall.

Mayor Stephanie Rawlings-Blake, who championed a controversial bottle tax this year to devote $10 million to school construction, called on Alonso and the school board on Wednesday to take "corrective action immediately."

Neil Duke, president of the city school board, said of the audit: "This year's results suggest progress, but room for improvement. Going forward, the district will prioritize improving our internal practices and policies consistent with the advice we've received from our state partners."

After reading the revelations of fiscal mismanagement, Robert Santoni Jr., chief financial officer of Santoni's Supermarket, said grocers will once again begin lobbying the City Council to repeal a recent 3-cent increase to the city's bottle tax — which was intended to raise money for school construction.

He said rectifying fiscal mismanagement disclosed in the audit, not raising taxes, will provide the schools with the money they need.

"There's millions of dollars in mismanagement," Santoni said. "We're going to lobby council members. How can they move forward with a pending increase in the bottle tax in light of what we now know?"

Baltimore Sun reporter Luke Broadwater contributed to this article.

erica.green@baltsun.com

twitter.com/EricaLG