The Howard County Board of Education last week unanimously approved conducting an internal audit of the school system.
David Clark, the school system’s internal auditor, went over the proposed annual audit plan during the school board meeting June 27.
The fiscal 2020 audit is divided into four areas: individual schools, school system subjects, management assistance and board assistance. For fiscal 2019, the school board unanimously approved a similar audit.
“The audits and related work will identify opportunities to understand [school] board policies and school system guidance and procedures, strengthen internal controls, ensure employees understand their responsibilities for preventing and reporting fraud as set out in the Board of Education ethics policy, and help the board oversee and analyze the budget,” the audit proposal states.
School board member Christina Delmont-Small asked for a review of the school system’s annual budget process to be added to the audit.
After a contentious budget season, the school board last month unanimously adopted a $894.2 million operating budget, a $54.6 million capital budget — both for fiscal 2020 — a $654.6 million capital improvement program for 2021-25, and the 2020-29 $1.12 billion long-range master plan budget.
In response to Delmont-Small, Clark said he would include a budget review in the proposed plan.
Under the individual schools category, the school system’s internal audit office “will continue to audit high schools based primarily on high schools’ higher level of school activity funds and other risks.” Elementary and middle schools and education centers will be audited on a selection basis, after looking at previous audit results, principal and/or financial manager transitions, and any new issues, risks or questions that arise.
For school system subjects, the office will look at “selected aspects” of the school system’s procurement activities, including its request for proposal process.
Under the management assistance category, Clark said he will work with school system employees to ensure they “understand their responsibility” to be on the alert for fraud.
The school board will receive budget analysis assistance from Clark focused on identifying potential savings, better analyzing programs, and promoting effectiveness and efficiency.
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The school board’s audit approval came a week after County Executive Calvin Ball pre-filed a resolution with the County Council asking for a performance audit of the school system to be completed by the Maryland State Department of Education.
A performance audit, as defined by the state’s Office of Legislative Audits, “is to evaluate whether an agency or program is operating in an economic, efficient and effective manner or to determine whether desired program results have been achieved.”
The County Council has not discussed Ball’s legislation at this time.
Howard schools Superintendent Michael Martirano said during the June 27 meeting that he and some school board members had met with Ball earlier that week to discuss the audit.
“Being in a position to use the performance audit … I’d welcome that as an opportunity as ‘We have a health care deficit that needs to be addressed.’ By law, we cannot carry a deficit on the books,” Martirano said.
In 2011, the school system’s employee health and dental fund started to be underfunded and, in 2017, it began showing a deficit. The fund’s deficit currently is $37 million.
“Ring that bell, ring it loud; [we’ve] got to make sure we’re addressing that [deficit],” Martirano said.