Howard schools’ spending faulted
State audit criticizes approval of no-bid contracts and lack of controls
A state audit of Howard County public schools says the system approved millions of dollars in salary increases, mileage expenses and construction projects without proper documentation or procedures.
The audit, released Friday by the Maryland Office of Legislative Audits, was conducted as part of a state process that reviews all 24 public school systems at least once every six years.
The audit reviewed data from mid-2013 through 2015, and found school officials awarded $12.6 million in no-bid contracts for various goods and services, suggesting they might not have gone to the most qualified vendors at the best value.
The audit also said the system entered into a dozen no-bid contracts with construction management firms worth another $9.3 million in fiscal years 2013 and 2014.
School policy allows single-source contracts if it is impractical to seek competitive bids, but managers failed to show why they did not seek competitive bids, according to the audit.
“If you’re a steward of public funds, you want to make sure the procurement process allows all vendors to openly participate so you can get the best price possible,” said Thomas Barnickel III, the state’s legislative auditor.
The audit also said the system awarded $15.3 million in salary increases for administrative staff in 2014 without county school board approval, as required by state law.
The system’s internal auditor, David Clark, disputed that claim, saying the board did approve the raises. But he said state auditors were unsatisfied with a school system process that grants raises as part of a salary scale set up years ago.
In another finding, the audit said executive employees received monthly mileage payments of about $208,000 in fiscal years 2014 and 2015 without board approval and without documenting mileage traveled.
Clark said the system uses a flat stipend to cover mileage, a process that does not require board approval.
He also disputed criticism of no-bid contracts, saying it was “unbalanced” for auditors not to mention that 97 percent of contracts were competitively bid.
“We want the audit. It can provide a value. But we want it to be done well,” he said.
The report warned that the system’s computer network might be vulnerable to outside attack, and made recommendations to secure it. Clark called those findings “well-reasoned,” and said a new management system implemented earlier this year is addressing those concerns.
Barnickel said the problems found in Howard County are not uncommon. He said other school systems have similar issues, though his office was especially concerned about Howard’s reliance on no-bid contracts.
Howard County Schools Superintendent Renee Foose did not comment directly on the audit findings, but county school board Chairwoman Christine O’Connor was critical, calling the audit a “disservice” and questioning auditors’ experience and understanding. State elected officials disagreed. Del. Frank Turner, a Democrat who represents part of the county, said school officials should “listen to these recommendations and take the steps necessary to improve.”
And Del. Warren Miller, a Republican who also represents a potion of the county, said, “It just seems like [the school system] has been caught doing something they shouldn’t have been doing, and we have to be the adults and step in and fix this problem.”
Specifically, Miller said he will consider legislation to halt no-bid contracts in the system.
The system came under budget scrutiny this year when the County Council and County Executive Allan Kittleman refused to fully fund its record-high request of $856 million. Instead, the system received $808 million.
The budget debate spurred the council to call for its own financial audit of the system, a review that is ongoing.
Additionally, a state ombudsman is expected to release by January a review of the system’s handling of public information requests. In April, the state Senate called for the investigation after parents complained school officials were not responding to information requests.
Del. Vanessa Atterbeary, a county Democrat, said the audit reflects concerns about transparency.
“It all goes back to whether the people we have entrusted our children with are doing the best job that they can. Are they being transparent? Are they being truthful? This audit calls all of that into question,” she said.