December 22, 2010

Auditors: Not enoughAuditors: Not enough state school money coming back state school money coming back

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By Andy Rosen
Andy@MarylandReporter.com

The state panel that oversees school construction has not recovered $3.2 million that Montgomery County owes it, after the local government sold school property that the state helped pay for, according to legislative auditors.

The Interagency Committee on School Construction should have gotten the money back, according to the report released Tuesday from the Office of Legislative Audits. The report does not name the school system in question, but a response from the committee refers to Montgomery County.

Chief Auditor Bruce Meyers also said “the IAC had not conducted required maintenance inspections for periods in excess of six years for 269 public schools currently in use.” But the committee, which is an agency of the Board of Public Works but staffed by the education department, disputes those figures.

The auditors point out that the Montgomery County land money in question had not been recovered despite being identified in two earlier audit reports. It also takes issue with the way the agency accounts for properties that have been sold by local governments. Some of the money for those properties could come back to the state.

The committee “did not adequately pursue recovery of at least $3.2 million due the state, relating to former school properties in which the state had made a financial contribution, that were subsequently sold or leased,” the report says. “In addition, the IAC did not maintain adequate records related to all such properties.”

The report says the committee compiled a list of properties that it could recover payments from, after legislative auditors requested one. The list identified 25 properties worth $4.5 million, but auditors say there are more out there.

Other properties worth about $910,000 weren’t on the list, and the audit report suggests that the state was unable to calculate the repayment status of another $560,000.

The state’s public school construction program has referred the Montgomery County collection to its lawyers, the committee said in a response to the audit findings. The county has disputed the repayment, according to the audit report.

The interagency committee pointed out that it has recovered other, similar debts in recent years.

For example, the school construction committee says the state has transferred $470,000 in bond debt back to local jurisdictions and recovered $193,000 from counties as well.

The outstanding $3.2 million developed over more than two decades, as Montgomery County got rid of 17 “surplus” school parcels and properties.

In a response to the audit, the state says it will continue to work to recover surplus money, as it has been doing.

On the school inspections, the IAC said its pace of inspections has been slowed by budget cuts since it took over the responsibility in 2007. But the auditors note that there are some schools that haven’t been inspected by the state in 18 years.