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Baltimore County schools audit finds staff and board members failed to file financial disclosure forms on time

A long-awaited audit of contracts approved during the tenure of a former Baltimore County school superintendent found just one significant failing: staff and board members did not disclose personal financial information in a timely way.

The audit, released Wednesday morning, did not find any wrongdoing in the way contracts were administered while Dallas Dance was superintendent. However, the audit only examined 18 large contracts awarded from 2012 to 2017; the board could order a second phase that would cover as many as 180 more contracts.

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“I’m pleased that the audit has finally been released, but I am troubled that it took so long to share the details with the public,” Baltimore County Executive Johnny Olszewski Jr. said in a statement. “I am glad that there does not appear to be any serious red flags, but do hope that the school board will act swiftly on the tangible recommendations for improvement.”

Baltimore County state legislators and the County Council had called for a comprehensive audit after Dance pleaded guilty last year to four counts of perjury for failing to acknowledge on financial disclosure forms that he had part-time work with a company that had gotten a contract with the school system to train principals.

Some county leaders, parents and board members feared the Dance conviction might have been the tip of a larger curruption scandal over the way contracts were given out during his tenure.

The lucrative technology contracts the school system entered into under Dance were of particular concern, in part because he traveled extensively to conferences where he spoke about school technology. Dance had become known nationally for his introduction of a program that provided a laptop to each student, as well as an online curriculum.

But the audit did not find such corruption.

It did find that five of the 18 top administrative staff members who were audited did not file financial disclosure reports on time. They included interim Superintendent Verletta White in 2016 and Dance in his first year as superintendent in 2013.

Some staff also had to file amendments to their disclosure forms because they had filled them out inaccurately. For instance, White filed an amended report showing she worked as a consultant while holding her job as chief academic officer. She worked for Dulle Enterprises from 2013 through 2016, the last year for which she has filed a form with the system’s ethics panel.

Of the 19 current and former school board members included in the audit, nine failed to file on time. The report said current board members Kathleen Causey, Julie Henn and Roger Hayden filed late several years ago. Causey is chair of the board and Henn is vice-chair. Both fought to keep the draft version of the audit secret.

While the audit said Causey did not file a report on time for 2014, she did not join the board until July 1, 2015.

“We identified that the timely filing of financial disclosure statements was not adhered to and needs to be more rigorously monitored,” said John Reagan, managing director of UHY Advisors, an accounting firm that did the work. “We believe additional training could lead” to the filing of reports on time.

The most significant finding had to do with the failures of both staff and board members to be more careful in their filing of the reports.

The financial disclosure reports are required not just of school system officials but of tens of thousands of officials across Maryland, who fill out forms annually to disclose any conflicts of interest they may have between their financial interests and their jobs or positions on boards.

The most recent scandal involving Baltimore Mayor Catherine Pugh and her book deals was uncovered because of information in financial disclosure reports, which are legally binding documents.

County Councilman Izzy Patoka, a Pikesville Democrat, said that the failure of board and staff members to file the reports accurately and on time is serious because it erodes public trust.

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“That trust if very fragile,” he said. “I think that part of earning that trust is fling your financial disclosure report in a timely way.”

Councilman Tom Quirk, an Oella Democrat, noted that some of the board members who had been most critical of Verletta White’s failure to file correct financial disclosure forms also had issues filing their own on time. Last year, Causey and Henn noted White’s failure to file correctly as one of the reasons they questioned making her the permanent superintendent.

“There were a lot of board members who were expressing concerns and hadn’t filed their own disclosures,” Quirk said.

But, he added, taxpayers should be pleased nothing serious was discovered.

“It seems to be suggesting that not a lot of damage was done, except for the severe damage to the reputation of the system. … Hopefully, all that trust can be rebuilt over time.”

The auditors, who poured through thousands of pages of contract documents, travel reimbursements and financial filings, issued recommendations for improvements in the way the school system documents the purchasing of products.

For instance, the audit said that the policies and procedures for contracts had not been updated in many years and needed to be reviewed. The firm also recommended changes to the way purchase orders are dealt with during the process of paying contractors. The school system agreed to make changes.

White said the audit shows the procurement practices need some “tweaks and adjustments” and that it is important to take the recommendations seriously.

She said the public should be glad to know that “there is no scandal here.”

Concerns about the audit grew when the school system disclosed it had shredded thousands of old financial disclosure forms in April and August of 2018, shortly before the audit was to begin and while it was ongoing.

School administrators said they did the shredding to make room for new reports to be filed in late April, but critics charged the staff was trying to hide something.

The audit has been the subject of board infighting for the past year, and tensions peaked Tuesday night over whether to release a draft version of the audit.

The school board spent nearly an hour arguing over whether to release not just the final audit, but the draft it kept under wraps for months. In the end, board members voted to release the draft and final audits. In the midst of the debate, the student school board member called the board’s behavior similar to that of middle schoolers.

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“We have just put on an entertainment show for the last hour. I apologize for the way we have acted,” Haleemat Adekoya said. “We are middle schoolers at this point.”

The board declined to release the draft in February because it said it believes it was not legally required to release the document because it was not finished and was considered “deliberative,” a category that means it does not have to be publicly released under Maryland law.

At the time, Causey said in a statement that while the board wanted to be transparent, “there are legal constraints to transparency.”

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