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HCPSS Howls at Poor Grades From State Auditors

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The Howard County Public School System (HCPSS) is used to getting excellent report cards. It has some of the best public schools in the state, data show, and maybe some of the best in the country.

The state legislature’s auditors issued a report card late last month that slammed the system’s business practices with 15 different negative findings. Howard County school officials were furious.

The team from the Office of Legislative Audits (OLA) found too many no-bid contracts, undocumented raises and expense payments to top staff, poor computer security, inefficient bus routes, procedures that disregarded state law, lax oversight of contractors and other sloppy business practices.

As such audits go, this financial report was very bad, perhaps a D, based on my reading of hundreds of past audits and reporting on scores of them. It was not as bad as audits of the Prince George’s County Public Schools, which have found massive incompetence and fraud. But bad enough for a school system used to getting gold stars.

The leaders of the school system chose to make an embarrassing situation worse by vociferously disagreeing with the auditors on over half their findings. The board chairman then summarized their objections in a two-page letter that insulted the auditors and essentially accused the legislature’s chief watchdog of making things up to suit a political agenda. Yikes.

Stranger still, in the context of hundreds of other audits, the response letter came not from the school superintendent or the chief financial officer, but from the chairman of the Board of Education, which is supposed to provide independent oversight of these operating officials.

Accusing the Auditors

Chairman Christine O’Connor said the cover letter from Legislative Auditor Thomas Barnickel to the co-chairs of the Joint Audit Committee — one of them is Howard County Sen. Guy Guzzone — was “deliberately misleading and appears to serve a political purpose for OLA.”

O’Connor accused Barnickel of sending an audit team “with inexperienced staff who were both inadequately supervised and appeared not to understand Maryland law and financial best practices.” The auditors “stubbornly resisted acknowledging the sound business practices we use,” O’Connor said.

This is not the usual way agencies with bad audit reports communicate with accountants who represent the people who hold the purse strings — the Maryland General Assembly. But Howard County school leaders did not follow the usual protocol. As mad as auditors and bureaucrats might be with each other in private, audits and the responses to them are usually presented in polite bureaucratic language in which no one is blamed by name and the rage is between the lines.

Missing from Barnickel’s cover letter was the usual boilerplate language thanking the agency for its cooperation. Instead, throughout Howard County’s testy response, the auditors responded with their own justifications.

This is extremely rare in audits; basically, agencies that have corrected the problems found in the audit simply say: We corrected this by doing such and such. Howard County said instead in several spots: “This finding is not relevant to our current operations.”

The Howard County school board and superintendent have been accused throughout the past 18 months of lack of accountability and transparency, and of having a generally high-handed attitude of “Who are you to question us?”

In that context, the response to the legislative audit was politically foolish. It reinforces the perception of the school board as above outside scrutiny.

Charlie Hayward, a retired auditor of federal agencies and a contributing writer to MarylandReporter.com, the news website I run, concurred in how unusual the response to this audit was.

Said Hayward: “The Board may have questionable objectivity in its role as independent overseer of the system, with respect to implementing audit recommendations”; and, “Vitriol is a potential fraud indicator under the well-established auditing literature” — meaning it is a bright, red flag when the school system doth protest too much.

The state of Maryland provides the Howard County schools with about 29% of their budget, $225 million this year. The school system also protested when the Howard County Council passed a bill for a local audit of the school budget. It gets 70% of its money from county taxpayers, which is $562 million.

Question A

Howard County Executive Allan Kittleman opposes the public campaign financing charter amendment on county ballots because it would force him to use taxpayer dollars to fund candidates.

“There’s no question I support public financing of local campaigns,” Kittleman said, but only if it comes from voluntary contributions, not tax dollars.

Under the charter amendment known as Question A, “the county executive must put in the budget what this unelected commission says,” Kittleman said. “This is clearly taxpayer funded campaigns. This is wrong.”

Kittleman was responding to a previous column about the proposal to finance races for Howard County executive and council with public money.

The proposal has gained statewide and national attention from a coalition of groups because it is the first time public financing of local races has been put on the ballot as a separate issue.

The coalition supporting public funding estimates that it would cost $2.5 million in the 2022 election.

Supporters concede this is less than is currently spent on competitive races for these offices. “[The] goal is not to ensure a candidate using matching funds can outspend all competitors; [the] goal is to stay competitive with enough funding to get the message out,” said the outline for the proposal.

‘No Way to Raise $2.5 Million’

But Kittleman said, “Even if there is a voluntary check-off, there’s no way you’re going to raise $2.5 million” from the 120,000 tax filers who pay county income taxes.

Howard County Council member Jon Weinstein, the lead sponsor of the charter amendment, said Kittleman’s opposition was no surprise. Kittleman had told him that privately in the spring, when the council was reviewing the measure. The administration did not publicly oppose the proposal, but the lone Republican on the five-member council did vote against it.

“Any system that works involves taxpayer dollars” in some fashion to ensure that the funds are available to candidates as promised, Weinstein said.

Weinstein said it was interesting that Republican Gov.Larry Hogan was the first to successfully run for governor using public financing. He pointed out that Hogan in this year’s budget proposed replenishing the campaign finance fund with $1.8 million in taxpayer dollars. The legislature cut $790,000 from Hogan’s proposed funding, and replenished the campaign fund with $1 million to replace the money from the fund that had been taken from the fund for other purposes.

Annual Appropriations

Under the Howard County proposal recommended by the coalition of groups, an independent commission would make funding recommendations to the county executive and county council for annual appropriations. That would ensure the program is available for qualifying candidates in the 2022 election cycle.

Voters also would be allowed to make a check-off on their local income taxes to fund the program, with the rest of the money coming out of the county budget.

With campaigns funded using tax dollars, Kittleman said an unwilling taxpayer could wind up paying for a robocall from a candidate they oppose. (The same is true for the many Democrats whose tax check-offs funded Hogan’s campaign.)

Weinstein said total voluntary funding is “not a secure system. We need some level of guarantee.”

The 2022 election was chosen as the first one to use the campaign fund, so there would be enough time to fill it. Weinstein pointed out that because of the council’s three-term limit, he is the only current member of the county council that would be impacted by the campaign financing.

“It’s either self-serving or self-defeating,” Weinstein said.

To make the voluntary check-off on personal income tax returns possible for Howard County, the legislature would have to act since the state collects the local piggyback tax.

Weinstein said the $2.5 million estimate was deliberately high and presumes that the candidates are “not only qualifying for public funding but maxing out.”

While proponents have been very visible under the umbrella of FairElectionsHowardCounty.org, there is also a committee called Howard County Citizens Against Question A, which is chaired by David Loeffler of Laurel, with Bradley Myers, of Hanover, as treasurer. Myers is also treasurer of Kittleman’s campaign committee.

The anti-Question A group has a website, VoteAgainstQuestionA.org, which makes some of the same points that Kittleman did in an interview. But it also asks, “Will this raise my taxes?”

“Almost certainly,” it said.

The opposition from Kittleman and a committee with ties to him may be too little, too late to defeat what is generally seen as a popular measure to reduce the influence of big donors.