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A checkup for school spending [Editorial]

Howard County School Audit
Howard County School Audit

The county school system plans to take a microscope to the way its money has been spent and allocated, going back to 2010.

A so-called forensic budget audit is expected to zero in on why the system’s line item for employee health and dental coverage is now $23 million in the red and whether grant funds have been properly budgeted.

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The audit needs to be embraced and its findings, and recommended remedies, shared publicly. Having the school system bring in an outside, independent auditor makes the process cleaner.

Although it seems like a distant memory, the school system’s budgeting was a political football during the final months of the tenure of Superintendent Renee Foose. Her administrators had warned about escalating insurance and benefits costs but had bristled when the County Council stepped in with its own review of budget practices. (That audit, its reach limited by state regulations, found the schools to be in compliance with generally accepted procedures.)

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The Howard County Public School System is in the process of hiring a new independent auditor to perform a forensic audit prior to submitting its budget to the County Executive in January.

The county’s audit last spring followed one in October 2016 from the state Office of Legislative Audits that questioned some $12.6 million in contracts that were awarded without competitive bids and flagged anemic security controls on financial systems, including those that process payroll and control inventory.

A $23 million deficit is small when placed against a nearly $820 million school system budget and the reason could be as straightforward as a surge in medical and dental claims, which then would call into question the actuarial calculations used to predict benefits costs.

Health care costs will remain challenging as an already uncertain insurance landscape shifts and the school system honors its union contracts for benefits, including health and retirement. It wouldn’t be a surprise if the schools are facing significantly higher costs for employee health coverage and the elected and appointed policymakers have to make some difficult choices, possibly taking new approaches to total compensation packages.

As a start, the internal audit will go a long way toward identifying lapses in the system, and ought to lead to better forecasting, so that tax dollars are spent efficiently.

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