School officials face possible contempt
Judge warns schools for special education failures

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BALTIMORE, Maryland (AP) -- City school officials could face penalties for contempt if they keep failing to provide overdue special education services such as speech therapy and counseling, a federal judge said.

About 9,000 students were supposed to receive those services last school year, but an effort to make up the work during the summer helped only 300, according to the court order issued last week by U.S. District Judge Marvin J. Garbis.

The Baltimore school system has cited the lack of qualified staff as among reasons for not providing the legally required services. The system tried to hire an outside firm this school year, but Garbis rejected the $4 million contract as being too expensive.

Garbis is presiding over a 1984 lawsuit that alleges the city and state have failed to adequately educate students with disabilities as mandated by federal law.

Garbis's order outlined a timetable the system must follow to avoid "most serious consequences." By Monday, for example, the school system must submit a report identifying the number of students in need of special education counseling and other services.

The court order issued last week doesn't mention specific penalties for contempt of court, but they can include jail time or fines.

On Wednesday, Governor Robert Ehrlich expressed outrage at the mounting legal fees over the lawsuit. But school board chairman Brian Morris said politicians were "grandstanding" over the issue.

"We're not going to run this school system based on some politicians' polling data," Morris said.

Copyright 2006 The Associated Press. All rights reserved.This material may not be published, broadcast, rewritten, or redistributed.

Officials at city schools appeal special ed order
U.S. judge had given state control over eight departments in system
By Sara Neufeld, Baltimore Sun Staff, September 13, 2005

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Baltimore school system officials appealed yesterday a federal judge's order giving the state control over a significant portion of the system's operations because of its failings in special education.

The system is appealing the order, filed Aug. 12 by U.S. District Judge Marvin J. Garbis, to the U.S. Court of Appeals for the Fourth Circuit. Garbis authorized the state to send managers to oversee eight school system departments that affect special education, including finance, instruction and human resources.

School board Chairman Brian D. Morris said in a written statement that the system is appealing because of concerns about "the serious if not damaging effects that [Garbis'] order will have on our fiscal standing and the overall operations of the System to provide instruction to all of our students."

Garbis had ordered the school system to cover the cost of the state intervention, which was initially estimated at $1.4 million a year. Late last month, the system filed court papers asking Garbis to reconsider that portion of his decision, saying the state was already spending more than it said it would.

The school system is trying to eliminate a crippling $58 million deficit by the end of this school year. Meanwhile, it has agreed that it is responsible for providing hundreds of thousands of hours in makeup services to special education students, at a cost of up to $10 million.

Garbis' order last month came after a breakdown of the school system's ability to provide and document services such as speech therapy and counseling to special education students. System officials say they provided many of those services but did not properly document them.

But on the same day as Garbis' order, the school system acknowledged that it is in contempt for its failures in providing such services, a move that observers say will make its appeal more difficult. All three parties in the 21-year-old lawsuit - filed by lawyers for students with disabilities against the school system and the state in 1984 - signed the contempt agreement detailing the system's failings.

School system spokeswoman Edie House said the system is not disputing the problems it has had, but is questioning the appropriateness of the remedy Garbis ordered.

"We're not saying we didn't have issues, but ... we don't think the state's plan is the most appropriate remedy," House said.

In a news release yesterday, the school system suggested that the court allow it to implement its own plan to bring in national experts to improve special education. In his Aug. 12 order, Garbis had called that plan "unsound," saying it appeared "cobbled together by counsel 'on horseback.'"

State Superintendent Nancy S. Grasmick, who has already sent seven managers to oversee city schools departments and plans to name one more, said in a statement that she is "disappointed" in the school system's decision to appeal Garbis' order.

"That order provides an opportunity to improve the circumstances for Baltimore City children with disabilities," Grasmick's statement says. "We have assembled a strong team and are anxious to pursue this critical path. If this appeal delays this process in any way, it would hurt the very students we are seeking to help with our work."

Lawyers for students with disabilities could not be reached for comment yesterday.

The school system filed a one-sentence "notice of appeal" yesterday with Garbis in U.S. District Court in Baltimore. House said the system will follow up with a more lengthy filing in the U.S. Court of Appeals for the Fourth Circuit in Richmond, Va.

Copyright © 2006, The Baltimore Sun

'04 audit finds city schools misspent
System officials say most problems have been corrected
By Sara Neufeld, Baltimore Sun reporter, January 18, 2006

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Financial oversight in the Baltimore school system was so lax two years ago that officials sent checks to dead employees, let people take sick time they hadn't earned and paid to transport special education students to school on days they were absent, according to a legislative audit released yesterday.

School system officials insist nearly all the problems noted in the audit, which covers the year the system was crippled by a $58 million deficit, have since been resolved. But the state legislative auditor, Bruce A. Myers, said that's unlikely.

"I'm not going to say they're not making progress," said Myers, whose office spent almost a year studying the school system's finances. "But has everything here been addressed? That would be fantastic, but I would be surprised. I would think some of these things are going to take a while to do."

Auditors issued 23 recommendations covering virtually every aspect of the system's financial management, including lax oversight of contracts and lack of inventory records to account for textbooks and other supplies.

They found the system was paying 50 percent more than it needed to for children with disabilities to take taxis to school. They found problems in bank statement reconciliations, with unresolved differences totaling as much as $4.8 million. And they found that someone who never worked for the system received $2,500 in direct deposits.

The audit findings immediately became a campaign issue for Mayor Martin O'Malley, who is seeking the Democratic nomination for governor. The campaign of his opponent, Montgomery County Executive Douglas M. Duncan, released a statement that read in part: "It looks like Mayor O'Malley should have been spending more time paying attention to his school system's finances. ... We should all be troubled by these findings."

Raquel Guillory, a spokeswoman for O'Malley, emphasized that auditors primarily reviewed documents from the 2003-2004 school year.

"We are aware of the shortfalls in the system back then," she said. "The school system has for over a year taken steps to correct those problems."

In 2004, the General Assembly passed a law directing the state Office of Legislative Audits, a nonpartisan agency, to conduct a comprehensive review of the financial management practices of all 24 Maryland school systems within six years.

The law specified that the two school systems that at the time had deficits, Baltimore and Prince George's County, were to be audited first. The Prince George's audit is scheduled to be released today. The audits of both school systems will be the subject of hearing in Annapolis tomorrow.

Auditors worked in Baltimore from November 2004 to August 2005, primarily reviewing documents from the school year that ended in June 2004.

The audit points to the reorganization of the school system in 1997, when it became an independent agency rather than a branch of city government, as the root of many persisting problems. It says the system had very little support in such areas as accounting and payroll and "is still to some degree experiencing the impact of that initial lack of vital infrastructure."

In addition, auditors note "significant turnover" on the school board and in the system's management, including the financial office staff.

Schools Chief Executive Officer Bonnie S. Copeland said routine independent audits that school systems must undergo each year showed major improvement from 2004 to 2005. Copeland said the system also solicited extra reviews during its fiscal crisis and has been working to implement various recommendations.

If nothing else, the legislative audit provides a fuller picture of the mismanagement in the school system at the time of its financial collapse. The system had to fire 1,000 employees and accept a $42 million bailout from the city. It expects to be deficit-free by June of this year.

The audit cites instances where employees were paid more than they were supposed to be:

Though the school board in 2001 prohibited senior management from cashing in unpaid sick and vacation time, one "executive-level" employee was improperly paid $16,000 for time he had accumulated. Copeland said yesterday that the employee is repaying the money.

Another management employee had approved his own grant stipend, totaling $20,000.

Auditors reviewed the records of 11 dead employees chosen at random and found payments to two of them that continued for up to four months after they died.

As of June 10, 2005, according to an internal school system report reviewed by auditors, 135 employees had used 1,031 days of vacation and sick time they had not yet earned. One employee had taken $21,000 in unearned sick time before leaving the school system, and the system was not trying to recover the money.

The issue of transportation for students with disabilities has been fundamental in a pending special education lawsuit facing the school system, and it was an area of substantial audit findings.

Auditors found that taxicab operators, who received $2.4 million in the 2003-2004 school year to take disabled children to school, were paid a flat rate rather than a metered rate, in violation of state regulations.

For 27 students whose files were reviewed by auditors, the system paid $15,900 for flat-rate taxi trips in September 2004. Under the going metered rates, it would have paid $10,400, the auditors found.

In addition, five children of school system employees were receiving taxi rides to school without documentation of disabilities that would make that service necessary.

Copeland said the system has cut its reliance on taxis by 60 percent this school year. Eric Letsinger, the system's chief operating officer, said the system has improved the way it sets taxi rates.

According to the auditors, the school system needs to develop a formal process to ensure that it gets the best price for contractual services. The audit found contracts that were extended without determining whether rebidding the services would be less costly and contracts that were vastly expanded in scope without school board approval.

On one school construction project, work started before the school board had approved a contract for it. On another project, the system could not find a copy of the contract, which was supposed to contain labor rates and material costs. Yet another contract was negotiated at $2 million, though the contractor's cost proposal was $1.4 million.

John Walker, the system's interim chief financial officer, said the system has "cleaned up our whole record keeping of contract procurement."

Auditors said the system needs to modify its employee ethics policy to require that annual disclosure statements be reported on time. As of March 3, 2005, 211 of 473 employees required to submit annual financial disclosure statements by Nov. 1, 2004, had not done so. The system responded that new procedures are now in place.

The audit lists some promising practices in the system, including employee travel restrictions and attempts to save money by buying gasoline, heating oil, office furniture and instructional supplies in consortiums with other area school systems.

"We were pleased with the audit, by and large," Copeland said, "pleased that they recognized our improvements."

sara.neufeld@baltsun.com

Copyright © 2006, The Baltimore Sun