$23M in Maryland school funding was misallocated, investigation into enrollment and attendance finds

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An investigation into enrollment and attendance discrepancies in Maryland public schools has found nearly $23.4 million in state and local funding was misallocated over a five-year period.

The Office of the Inspector General for Education released findings Tuesday of separate investigative audits into the Maryland State Department of Education and four school systems including Baltimore City.


Investigators discovered nearly 3,000 instances between 2016 and 2021 across the state of students who were improperly counted as eligible for state and local aid distributed to school systems. The audit recommend Maryland education officials evaluate whether the funds should be recovered from school systems.

The investigative report notes the discrepancies represent a tiny percentage of overall enrollment counts for Maryland public schools, which counted 881,000 students in September and receive billions in local and state funding annually.

The Maryland Inspector General for Education has found nearly $23.4 million in state and local funding was misallocated over a five-year period.

Investigators say some students were ineligible for the aid because they did not meet attendance or enrollment requirements. About a thousand students had no documented attendance at any point during the year, the report states. Officials also found 29 instances where a student was counted twice, the report states.

Each year, the state education department collects a snapshot of local school systems’ student enrollment data on Sept. 30. Maryland’s 24 school systems typically submit this information to the state along with codes denoting each student’s eligibility for state aid, per state regulations. Students must be present in school for at least one day in September — and have not withdrawn on or before Sept. 30 — to qualify for that funding, according to the report.

The improper headcount awarded school systems an additional $12.9 million in state and $10.5 million in local funds, which typically are used for things like transportation for disabled students or services for English language learners, the report states.

Investigators found local school systems self-reported 92% of the discrepancies to the Maryland State Department of Education. However, the office faulted the state education department for not detecting the discrepancies, not acting on the ones that were reported by school systems and not identifying the errors later through an internal auditing process.

The department’s audit office reviews each school system’s state aid programs every two years using methodology that relies on random samples, officials said in the report. Recent education department audits for Montgomery County, Baltimore City, Prince George’s County and Dorchester County public schools did not uncover funding discrepancies related to attendance or enrollment.

The inspector general for education’s office also said school systems received conflicting information from the state on student withdrawal requirements.

In an April 18 letter to the inspector general for education, State Superintendent Mohammed Choudhury denied that funding was misallocated to local school systems and said the education department was required by law to use data collected annually on Sept. 30.

The superintendent said student data were correct when submitted on Dec. 1 to the Department of Budget and Management and the Department of Legislative Services. And the law, he said, does not require the education department to update or reconcile the enrollment count for state aid-eligible students after the data is submitted.


That process “aligns with state practices across the nation,” education department officials said in a statement Wednesday.

“MSDE and the local school systems verify enrollment data through rigorous analysis that has resulted in a significantly low error rate,” education officials said in the statement. “In fact, data presented in the Office of Inspector General for Education report confirms that 99.9% or more of the student population in Maryland was correctly identified as eligible over five years, a result that can be attributed to procedures and processes in place to ensure the accuracy of the data collected.”

The education department ultimately concurred with five of the inspector general for education’s six corrective recommendations.

However, state education leaders did not agree that it was necessary to make changes to the Maryland Student Records Systems Manual, which defines requirements for dating a student’s withdrawal.

In addition to the statewide enrollment review, the office of the inspector general for education also audited state aid enrollment counts for four local school systems — Baltimore City and Dorchester, Prince George’s and Talbot counties. The systems were chosen to represent both large and small jurisdictions.

The investigative report for Baltimore City schools, which serves an estimated 77,000 young people, found more than 900 instances over a five-year period of students who were deemed eligible for state aid funding but had not met attendance or enrollment requirements. More than 500 students did not have any recorded attendance during the year.


The errors were caused by attendance not being properly recorded, and school staff not identifying and withdrawing chronically absent students in the short timeframe available to school systems, the report states. The improper figures resulted in a misallocation of $9.8 million in state and local funding to the city school system from 2016 to 2021.

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Baltimore City school officials identified problems with recording no-shows in 2015 and created a process to improve student enrollment recordkeeping for funding eligibility purposes. Those changes, investigators said, resulted in a decrease of errors — until complications brought on by virtual learning during the 2020-21 school year resulted in a rise in discrepancies.

A representative from Baltimore City schools on Wednesday pointed to an April 18 letter penned by city schools’ CEO Sonja Santelises to Inspector General for Education Richard Henry.

The discrepancies represent “just 0.3% of City Schools’ total students eligible for state funding over the OIGE’s five-year review period,” the letter states. “The discrepancies were primarily concentrated in the earlier years of the review period, except for some entirely understandable challenges presented by a small number of schools in tracking students during the COVID-19 pandemic.”

The city school system concurred with all three of the inspector general’s corrective recommendations, which are expected to be implemented by the end of the 2022-23 academic year.

The Inspector General for Education’s investigation into the funding issues was prompted by the Maryland Public Policy Institute, a conservative public policy think tank. The institute asked the state education watchdog to investigate potential enrollment irregularities involving state aid funding for Baltimore City Public Schools.


The investigations follow a recent enrollment scheme discovered at the Augusta Fells Savage Institute of Visual Arts. The school’s former principal and three administrators were believed to have fabricated courses and approved students for graduation when they had failed to legitimately pass classes.

This inspector general’s report on the city school system lists Augusta Fells Savage as one of five schools selected by investigators for a risk-based judgmental sampling of students.