Facing a possible county deficit this year, Baltimore County Executive C. A. Dutch Ruppersberger III has moved to freeze $10.5 million that the school department accumulated in health care savings and planned to spend on other educational expenses.
"We had no idea that there was $10 million in an account such as this," Mr. Ruppersberger said of the money held by Blue Cross and Blue Shield of Maryland.
He moved to freeze the funds this week, arguing that the money belongs to the county and that the school board may not spend it without permission.
Executive seeks audit
While the executive did not suggest that the school board or Superintendent Stuart Berger had done anything wrong, he called for an audit of the account.
"I want to know if any monies have been spent out of that account without authorization from the County Council," said Mr. Ruppersberger, citing a state law that forbids school boards from spending nonbudgeted revenue without approval.
"I'm not making any accusations at this point," Mr. Ruppersberger emphasized. "I just want to find out what the story is."
"It's much ado about nothing," said Dr. Berger, who said he had spoken to Mr. Ruppersberger about the money. As far as the audit is concerned, Dr. Berger said he told the county executive, "Be my guest, but it's our money."
The superintendent said yesterday that the school board had planned to spend the money on unfunded budget items, as well teachers' salaries, computers and books for students -- but only after getting the council's permission. The proposals were outlined in a letter from the school system to the administration.
Existed for years
Dr. Berger said he was surprised that the executive didn't know about the account, which has existed for years. The school board and Blue Cross have used it to accumulate surpluses in years when health care payouts are low and to provide funds in years when payouts exceed premiums.
He said county officials "always knew it was there," although apparently "they didn't know how much" was in it.
He said the account never had such a large balance before and attributed it to negotiations with Blue Cross and several employee unions to reduce costs.
"It's absolutely the result of our hard work," he declared.
The superintendent said school officials were surprised in October when they learned the size of the account. "We didn't think we had saved that much," he said.
Dr. Berger seemed surprised at Mr. Ruppersberger's swift action, but said he understood the county executive's concerns.
"He thought we had the money last spring [during budget debates] and we didn't tell him," the superintendent said.
Indeed, Mr. Ruppersberger said it came as a surprise to him that the funds even existed because he had never heard of the account during his nine years on the County Council.
RTC "As a county councilman, when I vote on the budget, I want to know about that," he said.
Signal of things to come
While discussions between Dr. Berger and Mr. Ruppersberger may have cooled the situation, the debate may be a signal of things to come.
Mr. Ruppersberger campaigned for office by promising to be generous with education dollars but tough on supervising how the money is spent. He also was backed by the county teachers union, which has squabbled constantly with Dr. Berger.
The executive said he wants the school board -- whose budget accounts for half the county's spending -- to be more accountable. To that end, one of his first official acts after assuming office earlier this month was to hire accountant Robin L. Churchill as his fiscal "watchdog" over the school system.
It was Ms. Churchill who brought the $10.5 million fund to his attention.
For years, county executives have complained about the difficulty of getting financial information from the school board, which has more leeway in spending than other departments. Dr. Berger, his predecessor and school board members always have maintained that they are hiding nothing.