Schools emergency funds and retirees’ health care benefits to be tapped to pay for STAT? Updated 5/20

Close-up Of Auditor Inspecting Financial Documents At Desk

A scathing County Auditor’s report on the school district’s laptop-per-student program known as STAT reveals BCPS plans to tap an “unprecedented” level of emergency funds for next year, nearly $32 million. Leaders might also help shore up the controversial digital initiative via a fund for retirees’ health benefits.

There’s a clear fiscal crisis pending it seems—including Baltimore County Public Schools pulling $31.8 million from the district’s fund balance, a year-end surplus also known as an emergency fund. Using such funds at that level, which the report terms “historically high,” highlights the digital initiative’s unsustainability over time.

The proposed 2018-19 budget for BCPS “relies upon the use of an unprecedented level” of BCPS’ “fund balance as a revenue source,” the county Office of the Auditor budget analysis notes. “Such a fund balance, by the school system’s own projections, will not be available at a similar magnitude in future years.” (See details footnote 1 below, and link to report here.)

Under STAT, as continued by current Interim Superintendent Verletta White, there will be ongoing four-year turnover of laptop leases–massive spending now approaching $300 million for the program’s first several years alone (The 2014 $205 million laptop contract–well over $100 million of which has been spent so far and counting with current leases, according to school officials. Another contract “refresh” for a separate $140 million was recently awarded to the same bidder Daly Computers/HP this spring, plus $17 million in additional 4-year contracts for tech services (see footnote 2).

Such staggering amounts far outpace other school districts nationwide and do not include the many software curricula, tech infrastructure, and related costs for tens of millions more annually. And BCPS’ one-to-one juggernaut is expanding, despite such 1:1 programs’ ongoing financial woes and lukewarm student outcomes. See recent PCWorld’s “Who Needs Computers in the Classroom? Not Students: The money is better spent on sincere and hardworking teachers.”

An outside audit, based on widening local and state concern over such costs and contracts, finally went up for a vote, and was approved by the school board.

Compare such pay outs to another startling BCPS figure that belies claims that tech is not replacing teachers: The district has 388 positions “vacant as of April 15, 2018,” mostly instructional and transportation jobs. This number has trended high, nearly triple the amount of unfilled jobs in 2012, when former superintendent Dallas Dance was hired, and planning for the digital initiative began (for details, see p. 14, auditor budget analysis). Are positions being left open to pay for STAT?

In addition, the County Office of the Auditor pointed out that the county’s proposed FY 2019 budget for BCPS totals $1.7 billion, with a general fund increase of $28.3 million including “new funding for the S.T.A.T. program, and funding for curriculum materials. These increases are significantly offset by the elimination of retiree healthcare funding, which totaled $25 million in FY 2018.

It’s unclear what that “elimination” means, though it apparently does not mean that employee or retiree health care benefits have been cut, or that coverage won’t be available to future retirees (benefits, however, have been trimmed back previously, as a percentage of health costs covered etc., according to county documents). Recent discussion among county and school officials instead described a “budget appropriation transfer” from the retirees’ fund reserve, apparently to be used to pay for STAT and other expenditures. This raises questions re: possible raiding of the fund now and over time. Will there be an ongoing countywide tapping of underfunded retirement and outside-pension employee benefits (OPEB) monies?

Update: While the fund does include substantial assets, a recent county “Spending Affordability Committee” report noted concern about “policy decisions that have put at risk future retirement health care benefits for the County’s current employees and retirees, as well as saddled the County with long-term commitments that are unaffordable under the current revenue structure.”

The County Office of the Auditor’s budget analyses inform the council and county leadership, who then determine appropriate funding for county departments, including schools. A budget work session was held in council chambers in Towson on May 17, in which BCPS cited misleading score claims and related. Previously, the three Republican county council members (Wade Kach, David Marks, and Todd Crandall) voted to strip $14 million from the schools’ STAT program, but were outvoted by Democrats on the council.

Spending priorities also seem way out of line. The county administration has mostly allowed multi-million dollar increases for STAT, yet for the proposed budget for next year: School safety measures — “one-time maintenance funds of $644,800 were requested to update software operating the card door access control system which provides security to all schools; however, the County Executive did not fund this request,” the report notes (footnote 3).

Laptops in high schools certainly make more sense, but the latest $140 mill round to HP/Daly Computers created yet another scandal, still costing twice an industry standard and well above other Maryland counties. Such expenditures top ongoing questionable in-development education software being tested on district children, totaling more than $60 million in no-bid contracts yet to be audited. For example, $10 million alone to Discovery Education in a no-bid contract for online “techbooks” and related.

Baltimore County Council members, executive leadership, and state representatives should review this analysis closely and judiciously. The report also offers options to “slow the rapid proposed growth in BCPS spending,” i.e. burdensome laptop costs, and possibly provide devices in elementary schools on carts (as most digital districts pursue) not assigned 1:1 in lower grades. Such moves would save $14 million or more next year, and avoid a scenario that seems to be threatening state Maintenance of Effort (MOE) requirements, a state formula for school funding. Approval “as is” might also lock the county in to higher taxpayer-funded contributions for years to come.

As the auditor’s budget analysis stated: “it is important to note that committing ongoing funds above the MOE level represents a binding funding commitment. Once the Council appropriates such funds, the County is unable to “pull back” its spending authorization on a per-pupil basis – in the upcoming fiscal year or in future fiscal years.”


Additional notes:

The Maryland State Board of Education (MSDE), in an apparently unusual move, also recently refused a schools’ exemption request for $4 million in added curricula to be categorized as a “one-time” cost the state would cover; (most of the digital curriculum is set by multi-year contracts, and thus is not necessarily one-time). This could send additional funding commitments back to the county or schools, causing the BCPS budget to soar to nearly $30 million over the state’s MOE requirement. The district has appealed the decision.

This $4 million and other curriculum contracts also run contrary to previous promises that digital curricula would only cost $1 million annually. In a 2014 article, BCPS digital director Ryan Imbriale said the district would “move its entire curriculum online and make it available to teachers and students. He estimates that the district will spend more than $1 million a year on digital resources for its 108,376 students.” (BCPS One, also mentioned in the story, adds another $2.5 million or so annually in software/platform fees and related to several vendors, school records show. Now Schoology, Inc. will apparently be contracted for more than $3 million over five years, replacing one of those vendors, Engrade, which the district says was paid out $3.4 million by early January this year. (see footnote 5). Mind-boggling numbers and shell games it seems.

Among other suggestions for budget cuts, excerpts from the Office of the Auditor schools budget analysis for 2018-19 include reducing the appropriation to Education’s “Other Instructional Costs” Program (3505), which does not include any salary costs.”

Lastly, the audit point out various school needs yet to be covered, including: Multi-year plans to increase the number of guidance counselors, social workers, pupil personnel workers, and psychologists.

Overall, after years of leadership controversy at the county public schools, it seems rather clear that fiscal professionals in-the-know understand that the costs and 1st-12th grade implementation of this laptop-per-student program are unsustainable. Are county taxpayers facing a long-deferred tax hike, or a government pension debacle that might come back to haunt the county and school district in a market downturn–or longterm?

Leaders indeed need to look out for schools that have numerous other unmet needs: 388 unfilled positions, a bulk of those instructional roles; current teachers who must pay money out of their own pockets for classroom supplies; principals facing slashed school discretionary budgets; students in need of staff support; and taxpayers who are footing the bill for an apparently ill-thought-out corporate-backed tech initiative in county schools.

See also “Priorities in a School System Where Nearly Half of Students Live in Poverty.”

Postscript 5/18:

Future projections for county and school retirees’ health care benefits remains unclear. Stakeholders should ask school board members and county council members to clarify this issue as well as cuts to services, and overall siphoning off of money from “all areas of operations” for STAT, including school discretionary budgets and numerous important areas of need all around.

UPDATE: For more information on the retiree health fund and spending affordability issue see this Baltimore Sun story here. 

Footnotes 5/20:

1. The “fund balance, by the school system’s own projections, will not be available at a similar magnitude in future years (see page 83 of the FY 2019 Board Proposed Operating Budget).” Some of that money was cached for STAT’s wider rollout, but BCPS’ own projections show that not enough surplus will be available regardless. “The proposed budget relies on the use of approximately $31.8 million of BCPS’s fund balance, which BCPS projects will total $29.7 million at the end of FY 2018 and $17.0 million at the end of FY 2019.”

2. Maintenance vendors are apparently tackling all of the district’s tech: “BCPS issued an RFP for contractors to provide skilled network support and maintenance technicians for the Department of Information Technology. On May 8, 2018, the Board of Education approved the four-year, 1-month $17.3 million contract with 27 vendors for the support and maintenance of the technology hardware and network used in schools and offices, including the digital devices.”

3. See pages 18 and 19 of the county auditor’s budget analysis to see what specific costs were not funded by the county, and elsewhere to see what was expanded, such as ESOL services.

4. Regarding the maintenance of effort (MOE) formulas the state uses to determine funding to schools. This is pretty complicated (again, see budget analysis itself), but the nitty gritty is here:

“The proposed budget exceeds the State’s MOE requirement by $29.8 million, which would increase the County’s MOE requirement by $273 per student for FY 2020. (On May 4, 2018, the County’s Office of Budget and Finance advised that it submitted an appeal to MSDE to reconsider its decision to disapprove $4 million in one-time curriculum costs as an exclusion to MOE; should MSDE reverse its decision, BCPS’s budget would exceed MOE by $25.8 million).”

“As of May 16, 2018, Baltimore County’s proposed FY 2019 General Fund budget exceeds the Spending Affordability Committee’s spending guideline by approximately $4 million due to MSDE’s disapproval of an MOE exclusion request by the County; an appeal of this disapproval is pending (should MSDE not reverse its decision, the proposed budget would be $29.8 million above MOE).”

5. Re: Schoology, BCPS contract records note: “This is a new contract to provide a learning environment to host student performance, grades, curriculum, content, assessments, professional development and communication tools for staff, students, parents and the community. Approval is requested for a five (5) year contract with one (1) recommended bidder and contract spending authority of $3,037,620. The Learning Management System (LMS) is a learning environment used by BCPS staff, educators, students, and parents in the teaching and learning process. LMS supports an interconnected system of curriculum, content, assessment, and communication tools. This contract will replace contract JNI-749-13 [Engrade] which will expire on October 1, 2018. The average annual expenditures on contract JNI-749-13 were $691,000 and total contract expenditures are $3,455,302,” according to BCPS records on the Schoology contract up for approval in early January. So, that would make a likely total of more than $7 million for what is essentially an online grading book with teacher contact info? 

For more info on increased funding for STAT, see also p. 93 of the 2018-19 BCPS proposed budget: “Contracted services increase 21.2% primarily due to the increased leasing costs associated with final year of implementation of the S.T.A.T. program, providing one to one devices for students; providing audio visual upgrades,” etcetera, etcetera.

And additional background info: Apparently the Los Angeles Unified School District (LAUSD), which had a troubled tablet program, approved only a one-year contract at first to see how it went. Not well.



Absence of Permanence: State rejects school board appointment of Verletta White

Image result for images ethics

Ethics-fueled chaos at Baltimore County Public Schools expands, with Maryland schools superintendent blocking the board’s permanent appointment of Verletta White to the superintendency, citing “great concern” over ethics violations and a stalled audit of school contracts.

There’s a lot at stake. The decision — which allows time to review district initiatives and wait for a newly elected school board and new county executive within the year — only makes sense. As state Superintendent of Schools Karen B. Salmon noted: “That will allow sufficient time for completion of the audit, and for full disclosure of the results.”

Verletta White could bring a great deal to the job; and she might continue as interim superintendent for another year, as the state noted. Yet time is needed: Ethics concerns linger. Normal procedures should be followed to select the schools’ next leader. Mislaid trust and lack of objectivity remain prevalent–well beyond recent outcomes with the controversial previous head of schools.

The sentencing of former Superintendent Dallas Dance to six months in jail on perjury charges revealed a culture of lies. Yet issues cited by the state prosecutor and the Baltimore Sun “Baltimore County officials fear that Dallas Dance’s conviction has hurt public trust in schools,” still persist among the administration he has left behind, including possible “exploitation of positions of trust.” That can be addressed, but only if action to separate from Dance’s questionable legacy is taken.

For White, who has said she wants to restore the public trust, these actions include:

  • Disclosing companies with which she met as a consultant for an entity (ERDI) that represents many edtech vendors with contracts at BCPS.
  • Paying back or officially donating the $12,000 or more in consulting fees for the undisclosed side job with ERDI–“private gain” which the Ethics Review Panel found in violation of ethics law.
  • Assertively pursuing a full and objective outside audit of district procurement policies and ongoing contracts for edtech and related multi-million deals, including the curricula rule, policy 6002, that allows no-bid contracts. That audit should include White’s year as interim.
  •  Stepping back from Dance’s suspect and costly laptop-per-student initiative known as STAT, and taking a more skeptical, and for students developmentally and fiscally appropriate view of screen time, video-game based software, and other unproven edtech industry approaches to education.

Overall, the STAT digital initiative still seems a pre-ordained BCPS-described “conversion” being used as a template and digital prototype around the nation: No matter the cost to students here.

There’s the continued travel conference culture, with nearly $400,000 for just a handful of administrators such as BCPS digital director Ryan Imbriale, who widely promotes the district’s digital initiative nationwide and whose role should be reconsidered* (Postscript 2). See travel costs laid out in next year’s BCPS budget,  according to records. Troublesome edtech industry affiliations and potential conflicts-of-interest reveal bias, not a balanced view about the pros and cons of increased tech reliance in schools, especially elementary level. Interim Superintendent White–who was recently voted permanent by the school board in a surprise mostly split-decision now toppled by Salmon–has served with the Center for Digital Education and other affiliations. She should instead forge her own way forward, relying on her years in the classroom, not jumping at yet another education fad: Computer-centered learning.

Various issues remain widely underreported:

White, also cited for ethics violations, has amended her financial disclosure statements after failing to disclose outside income, yet the school board’s Ethics Review Panel also found she violated ethics laws by accepting such compensation as private gain “in her capacity as a school official.” White admitted earning $12,000 over four years of undisclosed consulting for the Education Research & Development Institute (ERDI). Under Policy 8363 “Conflict of Interest — Prohibited Conduct,” as cited by the ethics panel and referred to in Salmon’s letter: “A school official may not intentionally use the prestige of office or public position for private gain of that official or the private gain of another.”

White was approached by ERDI because she was a public school official, the ethics panel found: “The Panel concludes that White was invited to participate in ERDI conferences directly as a result of her position as an education leader in the Baltimore County Public Schools and that she was compensated financially by ERDI for that participation.”

In response, White has vowed not to consult in the future (as Dance also promised), yet has she paid that money back? That private gain would remain.

Even more alarmingly, White has not publicly disclosed ERDI-related companies she met with as the schools’ Chief Academic Officer, a public role that oversaw the selection of ERDI-affiliated BCPS vendors under Superintendent Rule 6002. Such vendors now earn taxpayer-funded multimillion-dollar no-bid curricula contracts, most set for expansion. Those include a combined $6.4 million for just two software vendors, DreamBox Learning and Curriculum Associates/iReady, with whom Dance met as a consultant, as part of industry-supported efforts. Those contracts were championed and $4 million in expansions approved under White’s tenure in July 2017, after Dance left.

To “restore trust,” White should clearly name companies she met with via ERDI panels, focus groups, and conferences overall — conducted during the deployment of the STAT laptop-per-student rollout. She is a taxpayer-paid official. The public has a right to know potential or current vendors with whom she met. Otherwise, how do we know whether there was influence or not?

(Links to the state superintendent’s letter, and the full Ethics Review Panel report can be found within this Sun story). White has denied wrongdoing, and her letter to BCPS staff in response to the state’s decision can be found here.)

White has a strong background in the school system, and does not need to follow the signature program created by her predecessor, whose claims have been proven fraudulent. Time would allow a more objective review, for example, of the district’s current student score citations and claims, as those appear to also be cherry-picked to “support” the program, not objectively evaluate, and have been questionably defended. These claims were made in the past year, primarily under White.

White says that the audit would target the work of her predecessor as “the previous administration.” Yet she was second in command, and also oversaw and recommended the selection of the no-bid curricula contracts under BCPS Policy 6002. For a few details: That unusual BCPS policy for instructional materials bypasses competitive bidding processes, the gold standard in procurement. (The district’s avoidance of such bids has also drawn criticism from the state’s auditor).

Under the policy, a selection committee made up of teachers, principals and others reviews material brought to them by administrators such as White, and forwards the recommendations “to the Chief Academic Officer for review and action.” White, as chief academic officer, then made a recommendation to the board and superintendent for final approval. In other words, she was intimately involved in the selection or expansion of such no-bid curricula contracts totaling more than $60 million, and that’s among ERDI clients alone. These contracts remain in place, and are being further pursued at BCPS.

Here too is a video of White, along with Dance and Imbriale, at an edtech summit co- sponsored by Global Silicon Valley. The panel was led by a representative of Discovery Education, whose $4 million contract with BCPS was expanded to $10 million just a few months later. The school district said the conference paid for their trips and pricey California hotel rooms.

Indeed, to explore her claims of upstanding practices, the audit should now be expanded to cover White’s year in office as well, including payouts to and services provided by Discovery Ed, and contracts with DreamBox and iReady/Curriculum Associates and the recently approved new 4-year round of laptops–accomplished squarely under her tenure as interim superintendent. White discussed seeking an audit in November, yet seven months later it appears little has occurred.

In the end, the controversial laptop-per-student program brought to the county under suspect circumstances by Dance, who did promotional videos for edtech vendors such as HP and related, is mushrooming under White — with another staggering $140 million contract for laptop leases alone, on top of $100 million and counting already spent out via a previous concerning contract with the same bidder. These are hundreds of millions for leased laptops, which are discarded after four years. A forever revolving door of e-waste to boot.

Laptops are expanding to high schools next school year, which is likely where they should have been placed initially. Yet students are assigned devices 1:1 all the way down to first grade. The newly approved device contract with Daly Computers, an HP-reseller, also includes lease payments at least twice recommended costs and industry standards (even as recommended by HP), and indicates likely misspending–prompting ongoing questions of possible malfeasance that should be investigated via an audit and other means.

One has to therefore ask: Why not take a step back? What is the continued role of corporate influence here? How much pressure is coming from such quarters as Hewlett-Packard, whose devices have been chosen during both mega-million contract rounds (this time, the internal review, testing, and ranking of the proposed devices was conducted under an apparent “non-disclosure agreement.”) See a pattern of HP tech contract controversies here, here, here and BCPS-related advertising here. (Details in postscript below). And if one is to ‘follow the money:’ At more than $300 million combined, the Daly/HP contracts are the biggest money here.

Actual transparency, objectivity, and further digging is required before any trust can be restored. County and state audits and further investigations by the press and other oversight agencies are also required, otherwise defenses ring hollow.

Overall, technology is needed in schools, yet overspending, misspending, and a lack of objectivity takes away much-needed resources and other proven student supports, such as smaller class sizes, for more than 100,000 young people in the county, and possibly many more in the state and elsewhere if BCPS continues to serve as a “model” for other districts–which is still being pressed by the district administration as this titled event notes, “The Future of EdTech Starts Here“–despite deeply fraught circumstances at Baltimore County Public Schools.

Joanne C. Simpson, guest post


Hewlett-Packard, which has a checkered past with government tech contracts, has also been an apparent backer of the schools’ digital initiative/laptop program (see links below).
Hewlett-Packard widespread bribery case and settlement: “Computing multinational Hewlett-Packard (HP) is to pay US regulators $108m to settle a corruption scandal involving employees at subsidiaries in three countries, who were charged with bribing government officials to win and retain lucrative public contracts.”
HP workarounds / Idaho, got in a $180 million laptop contract two weeks before a voter referendum on the program (which was rejected by voters because of costs).
Likely relevant: “Hewlett-Packard has agreed to pay $16.25 million to the federal government to settle whistle-blower lawsuits alleging that contractors working for the company lavished meals and gifts . . . The investigation centered on tips that contractors working with Hewlett-Packard and other companies gave the gifts to employees of the Dallas and Houston independent school districts, hoping to get inside information and win contracts that were supposed to be awarded through competitive bidding, federal authorities said.” Dance formerly worked at the Houston independent school district. He was not cited, though numerous trips and meals were covered by edtech companies and the school district while he was superintendent in Baltimore County.
Other violations and apparent strong-arming of journalists (!)
HP/Baltimore County Public Schools video, etc.
There are also numerous other “collaborative” documents, such as an HP “Case Study” of BCPS titled: “Blended learner-centered classrooms integrate digital content with HP Tablet PCs.”
Postscript 2:*
Ryan Imbriale, who “leads” the BCPS digital initiative, is not exactly objective on pros and cons of tech integration in schools: According to his bio here:  He “has extensive experience presenting to audiences on online and blended learning,” and “is a Past-President of Maryland’s ISTE Affiliate, and a former member of the Board of Directors for ISTE, the International Society for Technology in Education.”
“In 2010, Tech & Learning magazine named Ryan one of the future leaders” and he “was honored by Intel® as an Education Visionary, an elite group of approximately 40 education leaders from all over the world who will be exemplars for global education transformation.
See link URL here: