A state takeover and a freeze on city funds were among the sanctions proposed yesterday as elected officials at City Hall and the State House reacted to the disclosure that the Baltimore school system's $1.2 billion budget is riddled with errors.
On the final day of the General Assembly session, lawmakers summoned school officials to Annapolis to question them about a Sun article reporting tens of millions of dollars in discrepancies in the budget the school board approved March 27.
In dozens of cases in the budget for the next school year, as well as in the budget for the current academic year, the amount listed for salaries does not match the number of people who are supposed to be paid. If the figures in next year's budget were correct, at least 460 employees would earn more than $200,000 a year on average, while more than 2,000 employees would earn less than $9,000 a year.
One mayoral candidate, Circuit Court Clerk Frank M. Conaway Sr., called for a state takeover of the system, demanding that the school board be removed and the fiscal officers be fired. Another, City Councilman Keiffer J. Mitchell Jr., called on the city to withhold money from the schools until the budget problems are resolved.
"Not one penny passes until we get this cleared; nothing," said Councilman Kenneth N. Harris Sr., a candidate for council president who backed Mitchell's proposal and also asked the city comptroller to audit the school system. "This is a very serious matter."
It was unclear whether the council would have the authority to freeze funds even if a majority of members wanted to. But in the face of heavy criticism, school system officials blasted The Sun's coverage, which school board member Kalman R. "Buzzy" Hettleman called "distorted and inflammatory."
"The newspaper story today was totally dishonest," said Hettleman, who chairs the board's finance committee. "It was inaccurate and unfair. ... You totally ignored the fact that the budget did add up."
Interim schools Chief Executive Officer Charlene Cooper Boston said the article contained "a lot of misrepresentation" and the system will issue a detailed response. "It's like a person who has on black and white and you say they have on black," she said. "Well, yeah, that's true, but they also have on white."
System officials said they are fixing errors in the budget for 2007-2008 before sending a final copy to Mayor Sheila Dixon and the council this week. They called the version that the board approved a draft.
But the budget with the errors was the version in front of board members when they passed it unanimously during a televised meeting, with one member absent. Curtis S. Anderson, who chairs the city's delegation in the House of Delegates, called the argument that it was a draft "crazy."
"If it's going to be a draft budget, why would you post it on your Web site?" he asked.
Councilman James B. Kraft was also frustrated by the system's response. "The thing that irks me the most, there's almost an arrogance in the statement that the budget's accurate," he said. "That just really gets me because they don't even know. ... You hate to say it because it sounds terrible, but if this is the attitude of the people running the system, no wonder our kids can't learn."
State lawmakers including Anderson weighed whether to order a new legislative audit, saying they feared the budget inaccuracies were a sign of deeper fiscal problems. They plan to submit a list of detailed questions for the system to answer.
School board Chairman Brian D. Morris told the delegates that the system would comply with an audit, but he said one isn't necessary, arguing that there are explanations for all the budget discrepancies. He said the system has made great strides toward improving its budget process after years of fiscal disarray and called the Sun article "damaging to the work we have tried to do to rebuild the public trust."
"There was a time when the system could not respond to questions like this," he said. "But today, we are prepared to offer answers after making substantial improvements in recent years."
The disclosure of the budget problems comes just months after the system declared itself fiscally healthy following a financial collapse and a $58 million deficit, which required a city bailout. It has renewed the debate about whether the current governance arrangement overseeing the city schools is working.
Until 1997, the school system was a branch of city government. That year, state officials agreed to give the city schools more money in exchange for increased authority. Ever since, the school system has been governed by a city-state partnership that critics say leaves both sides unaccountable.
Yesterday, council members including Mitchell and Mary Pat Clarke said the system should go back to being a city government agency. Rick Abbruzzese, a spokesman for Gov. Martin O'Malley, suggested that the governor would back such a proposal. He said the Sun article "underscores the need for accountability within our school system."
Under the current arrangement, the mayor and the council must sign off on the schools budget, but several council members said they don't have the authority to make additions or subtractions. They can ask questions, but eventually they have to sign off on the document so as not to hold up children's education.
Clarke also called on the system to start reporting its budget for each school, rather than organizing it according to central administrative departments.
"If we budgeted according to children instead of according to bureaucracy, we'd know how many people we had where," she said. "If you want to know where the money is and you want it to be transparent, you've got to do it school by school so people can compare."
Bernard C. "Jack" Young, who chairs the council's budget committee, said the council often doesn't have enough time to closely scrutinize the schools budget before it has to be approved by the end of the fiscal year June 30.
"To be honest with you, when we get the budget in May ... there's not enough time to scrutinize that budget like we should," Young said.
Shaun Adamec, a spokesman for Council President Stephanie C. Rawlings-Blake called the discrepancies "regrettable," but said that "the council wouldn't allow such errors and discrepancies to be approved." Asked why the current year's budget passed muster with the council last spring when it contains similar problems, Adamec said he didn't know.
"I'm not sure if I could necessarily speak to previous years' budget processes," he said. "I can tell you that, certainly in light of the article today but obviously just as a matter of standard practice, President Rawlings-Blake is very insistent on going line by line and making sure everything adds up."
Sun reporter Kelly Brewington contributed to this article.