As investigations continue into complaints of financial mismanagement at Rock Terrace School, Montgomery County administrators have begun a series of reforms hoping to prevent future problems at the special education school.

School auditors have been visiting the school, training teachers and reviewing financial practices in hopes of fixing problems at the Rockville school.

The changes at the Rock Terrace come as the Montgomery County State’s Attorney’s Office investigates complaints of bad financial management at school. The school system’s initial findings found money tied to student work-study programs were poorly managed, with some funds used inappropriately but no evidence of fraud.

The county is working with attorneys to decide whether or not the school system should count the money students receive in the Transition to Work program as wages reported to the federal government, said Montgomery schools Chief Operating Officer Larry Bowers at a Board of Education committee meeting Monday.

Transition to Work is offered at schools other than Rock Terrace and is designed to teach students to associate working with compensation. But Bowers said money tied to the Transition to Work program has been put on hold countywide as the district waits for final word from attorneys on how the district should handle money given to students as part of the work curriculum.

Bowers said the district considers the money as stipends. It is an important part of the curriculum for students, but he doesn’t think they should be counted as earned income.

“It makes it much more real for them going into the workforce,” Bowers said.

It is unclear how much longer the Maryland State’s Attorney’s Office will need to complete its investigation, Bowers said.

School officials have also completed an audit of the schools’ independent activity funds.

Among the audit’s findings:

●Rock Terrace administrators need to do a better job of reviewing bank statements and other financial reports in a more timely manner and ensure financial paperwork is signed by the appropriate staff members.

●Rock Terrace administrators purchased gift cards and an iPod Nano without documenting the reason for the purchases and who received the items. This finding is similar to the district's previous audit of the school covering activity from August 2008 to September 2011.

●Rules established to track revenue generated from student activities “to gain work experience” weren’t followed, with the “business office ... no longer involved in the billing process.”

Board of Education members who reviewed the audit Monday said they were concerned about what the school system could do to restore parents’ trust in the district.

Board President Chris Barclay said he was particularly disappointed with how the district failed to quickly confront and apologize to Rock Terrace parents.

“We owe it to these parents and these young people for taking accountability of what we did and did not do,” Barclay said.

Bowers said that with the new leadership in place at Rock Terrace and the improved financial management measures underway at the school, he is confident that parents’ faith in the district will return.

But, “It will take a little time to get that trust back,” Bowers said.