Md. School Payment Gaff to Affect Budgets

Overpayments to total $5M

ROCKVILLE, Md. -- The state accounting error that cost Montgomery County schools $24 million in state money will affect the budget process this fiscal year and the next, state officials said Thursday.

Overpayments to eight school systems are expected to total $5 million.

State analysts also have found that the error, the result of a $16 billion overestimation of property wealth in Montgomery, interfered with the funding formula for public libraries, creating overpayments to 20 of 24 county and city systems in fiscal 2009, which ends in June.

The findings come from the state Legislature's Office of Policy Analysis. It checked the calculations in fiscal 2009 and 2010 to see whether the glitch affected sums paid to local governments.

Mark Collins, principal analyst, wrote a letter to state Sen. Richard Madaleno Jr. and state Del. Brian Feldman, leaders of the Montgomery legislative delegation. Madaleno and Feldman had asked for the analysis.

The report confirms what Madaleno and others feared. The error affected complex mathematical formulas that determine funding to dozens of school and library systems, and not just in the current fiscal year.

Madaleno said he thinks the analysis shows the full extent of the error.

"I think there's a great degree of confidence that nothing else has been affected," he said Thursday.

Employees in the state Department of Assessments and Taxation entered the wrong sum for the value of taxable real estate in Montgomery as part of a statewide projection in November 2007.

That error led the Maryland State Department of Education to distribute too little money to Montgomery schools and too much to 17 other school systems in fiscal 2009.

Montgomery leaders began to suspect that the figures were wrong as early as January 2008. But the error wasn't confirmed until July, and the effect on schools wasn't revealed until last month.

Gov. Martin O'Malley has vowed to make up the lost funds to Montgomery schools and has said the other school systems can keep the overpayments, which total $31 million. A spokesman said Thursday that O'Malley would not ask library systems to return their excess money, which total about $553,000.

O'Malley and his chief of staff apologized for the error in letters sent this week to Montgomery Superintendent Jerry D. Weast and County Executive Isiah Leggett. Madaleno said he and other members of the legislative delegation got similar letters.

Madaleno credited O'Malley with taking "swift, immediate" steps to mend the error. Weast also praised the governor for "quick action" in a memo to the county school board.

Copyright AP - Associated Press
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