Baltimore schools CEO Andrés Alonso defended the system's financial management Thursday as a complex work in progress, in response to a state audit released Thursday outlining 26 recommendations that address inadequate oversight.
In a mass email statement, the schools chief said the system took the recommendations "extremely seriously" but went on to emphasize that the audit — the first conducted under his administration — of fiscal 2010 had fewer findings than the system's last audit in 2004.
"We agree with many of [the audit's] recommendations and have already put them into practice or are working actively to do so now," Alonso wrote. "Just as we have gotten better over the last few years, day by day and week by week, we know that we still have far to go and we must continue to improve."
The district agreed or partially agreed with the majority of the recommendations Thursday, only fully rejecting the finding that its policy of paying employees for unused sick and vacation time was excessive.
Auditors pointed out that the district had failed to collect millions of dollars in debt, overpaid dozens of employees in both salary and benefits, paid $2.8 million in overtime without substantiating hours, paid questionable salaries, failed to follow its own procurement protocols, and failed to verify millions of dollars in academic and maintenance work it contracted.
In one case, the lack of independent verification contributed to the system being schemed out of $150,000 by a Baltimore County woman who ran a fake tutoring service. The woman, Tracy Denise Queen, pleaded guilty and was sentenced to 10 years in prison, with all but 18 months suspended.
Earlier this week, The Baltimore Sun published a preliminary draft of the audit that was submitted to city school officials in the spring and showed 32 findings.
Over the course of the week, city and state leaders called on Alonso to restore public confidence in the system's ability to manage more than $1 billion in taxpayer funds, particularly as the city attempts to maintain political and community support to lobby for more money for school facilities.
The schools chief said the system was "committed to constantly improving our stewardship of the resources that are entrusted to us."
Raquel Guillory, spokeswoman for Gov. Martin O'Malley, who has made education funding a focus of his administration, said that while the governor's office hadn't had the opportunity to fully review the audit, "we are concerned about the findings that money may have not been used for its intended purpose — and that is for our children."
The state's interim auditor, Thomas J. Barnickel III, declined to specifically discuss a handful of findings that were listed in the preliminary report but not in the final version.
He said that findings could change based on explanations or documentation provided by the school system, and the office adjusts based on what it finds "accurate or significant."
The final report shows the findings have been reduced mostly because findings from the initial report were consolidated.
Language was less scathing, and fewer details were provided, but the most of the findings were the same.
In the preliminary report, the auditor said "doubt exists" that employees worked all of the overtime that was paid because there was no documentation or supervisor's approval. Auditors said in the final audit that there was a "lack of assurance" that the employees worked all of the hours.
While auditors noted in the final report that the school board lacked a sufficient ethics policy, the final audit did not mention several conflicts of interest, such as school employees also being paid as vendors and 105 employee addresses matching that of vendors. In the preliminary document, schools officials said they would put protocols in place to check employee addresses against vendors and would enforce the policy of reporting conflicts of interest.
The final audit also didn't note that three employees were paid for logging 241 overlapping hours at Coppin State University and the Maryland State Department of Education. In the preliminary document, city schools acknowledged that they were investigating the overlapping hours; Coppin State officials confirmed the issue to The Sun and said it was resolved.
And while auditors initially found that 1,400 computers were missing, they ultimately said the number was about 1,200.
Officials also noted in the final report that the district had critical vulnerabilities in its payroll, network and student data systems. It also found that the system lost money by failing to establish lease agreements with charter schools, which the district failed to pay $530,000 in per-pupil funding that year.
Barnickel said that the system had made improvements to transportation, federal grants, food services and setting up a fraud hot line since the previous audit.