Monday, April 09, 2007

Baltimore School Budget Riddled with Errors

The Balitmore Sun is carrying an exclusive look at the Baltimore Public School Budget. The document is riddled with errors, some of which seem completely rediculous but all are cause for concern.
In dozens of cases, the amounts budgeted for salaries do not match with the number of people who are supposed to be paid. One line item shows $6.2 million in salary money to pay zero employees.
The problems surface just months after the school system declared itself fiscally healthy after a major financial collapse and as the state infuses hundreds of millions of dollars in aid to the city's chronically underfunded schools.

The school board chairman and the head of the board's finance committee acknowledged that no one had noticed the many discrepancies before the board unanimously approved the budget March 27, with one member absent.

Among The Sun's findings:

• If the figures listed in the 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 person would earn $1.4 million, another would earn $1.9 million and 13 would earn more than $510,000 each.

• Different sections of the same document provide drastically different figures. A summary page lists 7,011 employees, including teachers and principals, assigned to work under the school system's chief academic officer. Elsewhere in the document, the number of employees exceeds 10,000.

• While the budget is supposed to include an extra $1.5 million to decrease class sizes in selected elementary schools, it would effectively increase class sizes by reducing the number of staff assigned to elementary schools citywide by 204 positions.

Presented with a list of the findings, city education advocates expressed outrage.

"Second perhaps only to ensuring that there's a good CEO, making sure that the right spending is taking place is the most important function that any school board has," said Matthew Joseph, executive director of the nonprofit Advocates for Children and Youth. "It's hard to believe that the city school board can carry out that function properly if the information they have is contained in that budget document."

School system officials attributed many of the problems to a new budget format.
It seems strange, that even with a new format such mistakes would not be caught. Assuming good faith errors in the document, some simple proof-reading and document checks would go a long way to making sure such errors didn't occur with such frequency. But as described in the news story, some of the errors describe a number of consistent errors, which raises questions about the authenticity of the document.

Balitmroe schools have suffered from a number of financial problems over the years and this budget is just one symptom. The Balitmore budget also highlights a number of assumptions about school budgeting. Because it is common that legislatures will simply throw money at schools when they are struggling, budgets don't get the scrutiny they deserve. But school boards and administrators are the keepers of public funds and the public will look into the matter.

Of course, some of these budget items will be investigated much deeper and the results will not be pretty.

UPDATE: (4/9/07 10:28pm) The Baltimore Sun is reporting that lawmakers in Annapolis, coming to the end of the annual legislative session, are not happy with the Baltimore School Board:
A state takeover and a freeze on city funds were among the sanctions proposed Monday 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.
While the General Assembly and city officials debate what to do, the School Board is souding even more defensive than the Bush White House:
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.
Until 1997, the Balitmore City Schools were a branch of the Baltimore City Government and were run through city hall. But in exchange for more money (surprise, surprise) the schools were made an independent branch with more autonomy. The schools appear to ultimately answer to the State and that has not served anyone well.

I am sure more will be coming.

UPDATE II (4/10/07 4:06pm): In the somewhat removed distance, these kinds of budgetary screw-ups were almost to be expected. For decades, we have watched politicians of all political persuasions and at all levels of government do nothing but throw more and more money at educators and the educrats. The totals now stagger even the most jaded budgetary observer, to the point that education is eating up between 40 and 60 percent of state budgets and sometimes as much at 70 percent of local budgets. That is not to say that the money is not important, but the explosive growth in school budgets will tend to outstrip the ability of people involved in budgeting to manage the funds.

But more than just the money is the incompetence demonstrated in this episode. Incompetence only applies though, if the errors were made in good faith. I am not convinced that the errors were all made in good faith. But when dealing with these kinds of sums, why did no one on the school board staff do any work in checking this. The staff are supposed experts and if a newspaper reporter can break down the errors, then why didn't a budget expert?

While the General Assembly adjounred last night for the year, I would not be surprised if a series of hearings were held and possibly even a special session to remove the autonomy of the Baltimore City School Board. Hopefully not a single person on this board will be re-elected, but that may be a faint hope at best.

Check out this link to an example of one of errors the Sun found.

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