An internal audit criticizes Anne Arundel Superintendent Eric J. Smith and his human resources and payroll departments, saying they overpaid top administrators, awarded undeserved raises and granted improper signing bonuses, generally without the knowledge of the school board.
The 47-page audit released yesterday portrays the school system's human resources operation as chaotic and unregulated, typified by incomplete employee files and governed by a school board policy that is one sentence long.
Smith, who requested the audit, welcomed the findings, though he took issue with some observations. He said the human resources department has operated on vague, unwritten rules for decades and that a housecleaning is overdue.
"Is this a troubling report? Sure," he said. "It means we have a lot to do in HR."
Among the findings:
* In a random sampling of files for employees hired between November 2002 and October 2004, the auditor found that 29 percent contained no evidence of a completed background check, 41 percent contained no proof that the applicant's references were checkedand 36 percent held no academic transcript.
* In four cases, executives were paid apparent signing bonuses of $3,000 to $6,000 to cover "consulting" and airfare before the employees reported for work.
* A 2003 reorganization of top staff members resulted in pay raises of $11,000 to $13,000 for four high-level administrators without the knowledge of the school board.
Smith countered that the school board was notified and that the reorganization saved the school system money.
Auditor Walter Federowicz concluded that "significant actions must be taken to address" details in the report, including a host of new written policies and procedures.
Tricia Johnson, vice president of the school board, said the audit raises a lot of questions that need answers. "There's practices here that at least several members of the board are concerned with," she said.
Smith said he saw no evidence of "any purposeful wrongdoing on anybody's part" in the audit, given that the school system lacks written rules to govern such things as performance and signing bonuses.
"The problem is there's no policy that permits it and there's no policy that forbids it," he said.
The school system has initiated several changes to correct problems listed in the audit. One is to review the paperwork on all new employees to ensure a background check is complete. Another is to increase the human resources staff to work through a backlog of employee files to make sure that each is complete. And the department is working on a comprehensive salary policy.
Within the county's schools, the auditor found consistent violations of a county rule that forbids teachers to spend more than six days a year out of the classroom for meetings, to minimize the use of substitutes. The auditor found that 215 teachers had attended six or more meetings in the 2004-05 school year and one had missed 64 days.
Among headquarters staff members, the auditor noted a pattern of employees "jumping" past several steps on the yearly salary scale. One group of 24 employees jumped from the ninth step to the 15th on the scale in a year, resulting in pay raises averaging $3,165 more than what the workers would have earned without the leap.
The report also noted a practice of allowing certain employees to jump through the salary steps to "catch up" with their perceived level of experience, including one employee who advanced 10 years on the scale in two calendar years.