Settling a dispute over severance payments, state officials recently agreed to allow the Maryland School for the Blind to deduct $264,552 from the school's endowment fund to cover the payments.
After a critical report of financial management at the school in Fullerton, the state school superintendent, Nancy S. Grasmick, had ordered repayment to the state of the $264,552, and $31,604 in bonuses school employees handed out in fiscal 1994.
But Dr. Grasmick will not require the school to repay the entire amount because if it did so, "the children at the School for the Blind would be detrimentally affected," said Ron Peiffer, a spokesman for the superintendent.
The $264,552 can be drawn from the school's private donations, Louis M. Tutt, school president, confirmed in a letter to Dr. Grasmick. The state also has approved a revised budget, including an equal amount in other allowable expenses that will be covered by state funding.
The financial review completed by education auditors came two months after a state audit uncovered a $111,553 "discrepancy" in spending for contractual services at the school in fiscal 1993.
The audits and charges of questionable fiscal management will be explored Oct. 17 by the Joint Budget and Audit Committee.
The attempt to pay severance and bonuses drew sharp criticism from Dr. Grasmick in August because more than 80 percent of the school's $12 million budget is state-funded and the school must adhere to state guidelines.
Dr. Grasmick wrote to Mr. Tutt that she was "disappointed" the school did not get agency approval for such expenditures.