Education Alternatives Inc. and the Baltimore school system have resolved differences in student enrollment counts, but the company stills owes the city $338,500 it received based on overstated enrollment at "Tesseract" schools, city officials said yesterday.
The city concluded three weeks ago that EAI owed about $500,000 based on overstated enrollment, but the figure was reduced to $338,500 yesterday based on a revised state audit.
EAI has continued challenging the enrollment numbers and for the past two days has sought a further "adjustment" that would erase at least part of the $338,500 debt.
Superintendent Walter G. Amprey said he rejected that request, which EAI Chairman John T. Golle made for the first time at a meeting Tuesday at the school system's North Avenue headquarters.
Dr. Amprey said the conflicting views stemmed from honest differences of interpretation and that he would not rule out further adjustments that could reduce EAI's overall debt.
He said that his rejection of Mr. Golle's request had in no way indicated a rift.
"We're trying very hard not to create any unnecessary differences between EAI and the school system," Dr. Amprey said. "The important thing is we've got to work these things out. No relationship of any kind is without problems."
Mr. Golle did not return phone calls yesterday. Despite repeated school system statements to the contrary, the EAI chief has consistently maintained that the company never owed the city any money based on the enrollment discrepancy.
Hours before the meeting Tuesday, at a U.S. Senate subcommittee hearing on school privatization, Mr. Golle angrily responded to a question from Sen. Arlen Specter, R-Penn., about press accounts that EAI owed the city money.
"It's just not true," Mr. Golle said. "It is a contrived story that is without merit, and we resent it."
Soon after Mr. Golle spoke, Dr. Amprey and other school system officials said EAI indeed owed $338,500 based on overstated enrollment figures.
Union and City Council members said the bewildering turn of events shows that tighter public control is needed over the nation's first experiment in private management of public schools.
"Our contention has been that there needs to be some tighter oversight of EAI and how they're spending money. Now all we can do is take the school system's and John Golle's word," said Linda Prudente, spokeswoman for the Baltimore Teachers Union.
City Council President Mary Pat Clarke said EAI's budget should come under closer scrutiny because the Minneapolis-based company is spending public money.
"There should be closer oversight because we're being held accountable for the expenditure of taxpayers' funds," Ms. Clarke said.
She also said that the contract enables the city to give EAI more money without the approval of the Board of Estimates, the body that holds the city's purse strings.
As the contract is written, the company could run the nine schools under the original contract without having to answer to elected officials, Ms. Clarke said.
Mr. Golle's bid to reduce or erase the $338,500 deficit marks the latest in a series of claims by EAI that it had been underpaid because of previous mistakes.
Shortly after EAI took over the schools in September 1992, Dr. Amprey agreed to give the company $500,000 based on its contention that enrollment had been underestimated by about 250 students.
Under the company's contract, it receives an average of $2,000 each school year for each student by which enrollment exceeds city projections.
Dr. Amprey said he agreed to give the company the money only with the caveat that it would have to be returned if a state audit confirmed original school system attendance figures.
The audit, released three weeks ago, pronounced the original school system numbers on target, prompting Dr. Amprey to conclude that EAI owed the city the $500,000.
The company then challenged the state audit, with some success: EAI turned up 65 students who had not been counted because of missing roll book pages and other faulty recordkeeping at two Tesseract schools, Harlem Park Middle and Harlem Park Elementary.
That discovery led to the city's reducing the amount owed by EAI to $338,500.
Nat Harrington, spokesman for the school system, said the system has yet to determine a timetable for repayment of any remaining EAI debt.
"That's not been determined, and it's not important," Mr. Harrington said. "We don't want them to be injured, they don't want us to be injured, and that's what's driving this. We were giving them the benefit of the doubt because we have faith that they have the ability to see problems in accounting.
"They're never going to get more than their contact says they should. We're a partnership."