School officials in Prince George’s County violated district procedures or state laws in awarding contracts of more than $75 million, according to a state audit that points to a lack of oversight and other deficiencies in Maryland’s second-largest school system.
The report found problems in required justifications for contracts given without a competitive bidding process — known as sole-source contracts — along with a failure to submit those and other contracts to the school board for approval.
State auditors pointed to gaps in computer network security, the payroll approval process, and decision-making on executive-level employee pay increases.
Monica Goldson, the interim chief executive for the Prince George’s school system, responded with concern to the findings, saying in a community letter that she is taking steps to place the system’s procurement office under outside control while procedures are revamped.
Goldson said she would request an external audit of 13 sole-source contracts highlighted in the state report, with the aim of spotting potential ethical lapses or criminal wrongdoing. If found, such problems will be referred to law enforcement or other agencies, she said.
“Several issues raised in the audits go back almost 20 years to the early 2000s,” she said in the letter. “While my team has taken important steps to correct long-standing challenges, this most recent report signals a need for deeper and more comprehensive changes across the school system.”
Too often, the school system has opted to resolve complex issues with “the simplest solution,” said Goldson, who began as leader of the school system last summer.
Two school system officials involved in operations are leaving effective April 1, officials confirmed. School system leaders declined to discuss circumstances surrounding the departures, saying they are personnel matters.
Goldson described the system’s procurement department employees as hard-working in her community letter and said the school system hopes to provide them with “clear guidelines and stable leadership for the first time in over 15 years.”
The analysis, done by the state Office of Legislative Audits, came as part of a regular cycle of audits done of financial management practices in Maryland’s 24 school systems. The reviews are typically conducted at least once every six years.
The audit, dated March 11, found 32 contracts that were supposed to go to the school board for approval — valued at $43.1 million — but did not. They included two contracts that went to vendors who were not the most qualified or lowest bidders.
The report found the school system failed to document, as required by state law, the benefits of using an intergovernmental cooperative purchasing agreement, which allows one jurisdiction to piggyback on a contract procured by another. That agreement was valued at $34.8 million dating to 2014.
In all, the report included 19 findings, noting deficiencies in physical inventories of equipment, access to an automated fuel dispensing system and security for the school system’s internal computer network.
It said there was no policy for requiring justification for executive-level salary increases and for requiring they be reported to the school board.
Some school board members expressed concern that procurement problems identified by the state extend beyond what was pointed out. The auditors did not examine every contract, only a sampling.
“It appears to be a pretty alarming lack of honesty or lack of oversight,” board member David Murray said. “The findings were pretty shocking in terms of the millions in sole-source contracts and the millions that were not voted on by the board.
“They just didn’t have the authority to give out those contracts,” Murray said.
School Board Vice Chairman Edward Burroughs III said the school system needs to take action if laws were broken. The audit looked at a two-year period ending in July 2017.
“I’m very disappointed, and I believe the wrongdoers need to be prosecuted to the fullest extent of the law,” Burroughs said. “It’s a slap in the face to every teacher, every student and every taxpayer. . . . If we don’t hold people responsible, then we create a culture that this is okay.”
The school system’s purchasing manual says contracts valued at $25,000 or more need to go before the board, according to the audit.
In a letter to the state attached to the audit, Goldson offered a lengthy list of improvements that would be made. “Management agrees with all 19 audit findings and will work diligently to rectify the identified deficiencies,” she wrote.
However, as part of the plan offered, the system would change its purchasing manual, so that there no longer is a requirement about board approvals for all contracts over $25,000. State law and board policy do not require that, officials said.
Instead, the system would notify the board of new contracts in advance of board meetings.
The audit concluded that school officials had satisfactorily addressed nine of 23 findings from a previous audit, released in 2014.