For more than a year now, an independent audit of Prince George's County schools has been the club most often used to beat up the school system.

Now comes new School Superintendent Iris T. Metts with her own audit saying that the first audit was full of financial flaws. Soon there may be a third audit to reconcile the discrepancies between the first two audits.

And we wonder why there's a problem in our schools.

While officials are squabbling over the numbers, issuing competing audits, how can they really concentrate on fixing the school system?

State legislators, the county executive and countless other concerned citizens have used the audit, completed in 1998 by MGT of America, as proof that there had been massive mismanagement of funds by school officials. In some instances, funding for the schools has either been withheld or held up because of the findings in the audit.

But Metts says MGT overstated the savings that could be squeezed from the school system.

For example, school officials point to a typographical error in the audit that led to the conclusion that the schools could save $6.6 million if officials consolidated printing. However, a misplaced zero turned the figure of $185,500 into $1,850,500, which was one of the numbers then used to project the $6.6 million savings over four years.

In the end, school officials concluded that instead of $125 million in projected savings over five years found by the audit, the schools could find only $10.8 million to trim.

Well, wait a minute, says an official for MGT, who took issue with Metts's review of the firm's audit and her assertion that the firm made numerous errors or failed to accurately account for the costs associated with putting the recommendations in place.

The MGT official said the final audit report was different from the draft in a very important way: It did not include that $6.6 million gaffe.

"We corrected that error," said Linda Recio, a project director at MGT who oversaw the audit of the Prince George's school budget. "We corrected that mistake, and the new savings projection was for $832,000."

Not only that, but the $125 million figure being used as the baseline for Metts's analysis of the MGT report is wrong, too, Recio said in a telephone interview last week.

"While $125 million savings was projected in the draft report, following Prince George's staff input, this projection was changed to $115 million," Recio wrote in a letter to Metts. "I am concerned that the draft report and not the final report is being used by the school district for [Metts's] analysis."

Recio is also a little miffed about something else.

She said that school officials, while conducting their analysis of her report, never called to discuss any problems they had with her firm's conclusions.

"I told people in the system that if they had any questions with any of our recommendations to please call me," Recio said. "To date, I have not received one phone call."

Metts said it's true that school officials didn't call MGT. She also said school officials did not know they weren't working from a final report from MGT.

For heaven's sake, why aren't all these folks talking to each other, and why do we have all this confusion?

That's what Artis G. Hampshire-Cowan, chairman of the panel appointed by the legislature to oversee Prince George's County's school reform efforts, wants to know. Hampshire-Cowan said last week that she's not happy with the different savings projections or the lack of communication.

"We are not accepting everything MGT said . . . and we are not accepting what Dr. Metts is saying," Hampshire-Cowan said. "Anyway you look at it, there is a big gap between $10 million and $115 million."

So, Hampshire-Cowan plans to get the two sides in a room and talk about what, realistically, can be done to trim any waste in the nearly $900 million school operating budget.

"I'm sending a letter inviting her [Metts] to meet with MGT and go through their differences," she said.

To help mediate, Hampshire-Cowan said they will use the accounting firm the oversight panel hired, KPMG LLP. She said the oversight panel doesn't have the money to have KPMG do a line by line reanalysis of MGT's audit report. Instead, the firm will play referee.

Metts, who I think is trying hard to find a middle ground, said she would welcome some mediation.

"I think right now, we have to do whatever is the most expedient," she said. "We can't go forward unless we have a complete analysis of any difference of opinion of savings. We all need to come to a conclusion as to what the true savings are. And, if we don't settle this, it could cloud the issue of what additional funds we might need for the budget."

Frankly, it always concerned me that MGT's audit, which was supposed to be used as a tool to help Prince George's schools, ended up being a hammer to pummel school officials. Is it no wonder they went on the defensive?

Politically, it was important that Metts get in there and have her people crunch the numbers to show the budget wasn't that bloated.

On the other hand, the audit clearly made the point that any budget has got some fat. Any business executive will tell you that in a budget as large as our school system's, there is going to be waste.

"What the oversight panel wants to do is be present when the two sides are going through their numbers and make a judgment as to who is right and who is wrong," Hampshire-Cowan said.

I certainly hope that works. It's time to agree on one plan and one set of recommendations so that we can cut whatever fat there is--whatever that amount may be. And then let's get on with the real business of fixing up the county's public schools.

Talkin' Money appears every other Wednesday in the Prince George's Extra. If you have any comments or column ideas, send me a letter or e-mail. You can write to me in c/o Talkin' Money, 14402 Old Mill Rd., Suite 201, Upper Marlboro, Md. 20772. My e-mail address is singletarym@washpost.com.

Metts Outlines Her Objections to School System Audit

Prince George's County School Superintendent Iris T. Metts is disputing an audit report that suggested the school system could save millions of dollars by cutting here and there. Metts says the audit report by MGT of America was full of flaws and failed to account for expenses associated with some of the firm's recommendations.

Here are some of her objections to the MGT report:

* MGT had a typographical error that led it to overestimate cost savings of $6.6 million if the school system consolidated printing needs. MGT made an error when they added a zero to the figure $185,500, turning it into $1,850,500. (MGT said that it corrected this error in its final report and that the final savings projection figure was $832,000.)

* MGT recommended that the school system develop a disaster recovery plan. But school officials say there was no cost estimate provided. To develop such a plan would cost $150,000.

* MGT recommended that the school system replace its instructional personnel cards with electronic data. But they didn't account for the extra expense of implementing this measure. The school system says it will cost an extra $100,000.

* MGT recommended that the current management information system be replaced. School officials say auditors did not include a cost estimate for upgrading the system. They estimate that it will cost $1.6 million to implement this recommendation and an additional $300,000 a year in maintenance costs.

(Linda Recio, a project director for MGT of America, said she has not seen Metts's report and therefore cannot comment on the specific criticisms of her firm's audit report by school officials.)