Richard P.

Henry
MARYLAND OFFICE OF THE Inspector General
INSPECTOR GENERAL FOR EDUCATION
Douglas H. Roloff, III
Deputy Inspector General

April 20, 2022

MEMORADUM

To: Mr. Mohammed Choudhury

State Superintendent of Schools
Maryland State Department of Education
200 W. Baltimore Street
Baltimore, Maryland 21201

RE: Investigative Audit of Maryland State Department of Education’s State Aid Student
Enrollment Reporting (OIGE Case: 22-0001-A)

The Maryland Office of the Inspector General for Education (OIGE) has completed an
investigative audit of the accuracy of state aid student enrollment reporting provided by school
systems to the Maryland State Department of Education (MSDE). The investigative audit results
and recommendations are included in the attached final report.

The OIGE provided a draft report to MSDE on March 17, 2022. The State Superintendent of
Schools provided responses to the report’s recommendations on April 18, 2022. The responses
are included as Appendix A to this report and indicate MSDE’s concurrence with five of the six
recommendations.

This report details the findings and recommendations of the OIGE, Office of Investigative Audit
division. Please contact Mr. Dan Reagan, CPA, Supervisory Inspector General at (443) 721-
4889 or by email at [email protected] if you have any additional questions or concerns.

Respectfully,

Richard P. Henry
Inspector General

Enclosures

Maryland Office of the Inspector General for Education

100 COMMUNITY PLACE, CROWNSVILLE, MARYLAND 21032 Phone: 410-697-9692
cc: The Honorable Lawrence J. Hogan
Governor – State of Maryland

The Honorable William C. Ferguson IV

President – Maryland Senate

The Honorable Adrienne A. Jones

Speaker – Maryland House of Delegates

Mr. Clarence C. Crawford

President, Maryland State Board of Education

Dr. Sonja Santelises, Ed.D.

Chief Executive Officer, Baltimore City Public Schools

Mr. W. David Bromwell,

Superintendent, Dorchester County Public Schools

Dr. Monica Goldson, Ed.D.

Chief Executive Officer, Prince George’s County Public Schools

Dr. Kelly Griffith, Ed.D.

Superintendent, Talbot County Public Schools

Maryland Office of the Inspector General for Education

100 COMMUNITY PLACE, CROWNSVILLE, MARYLAND 21032 Phone: 410-697-9692
 

 Office of the

Inspector General


 for Education
 State of Maryland


`

 Richard P. Henry



Inspector General



Investigative Audit 22-0001-A


 Maryland State Department




of Education



State Aid Enrollment Counts



Final Report



April 20, 2022
 
Executive Summary
Investigative Audit of Maryland State Department of 

 Education’s
 State Aid Enrollment Counts

Objective: Results in Brief:

To determine whether students OIGE discovered 2,973 instances of
deemed eligible for state aid funding students who were deemed eligible for
met Code of Maryland Regulations state funding but did not meet the
(COMAR) requirements for attendance or enrollment requirements
attendance and enrollment. in COMAR. 995 of these students had
no documented attendance at any point
during the year.
Scope: Despite the noted discrepancies
School Years 2016-17 through representing only a small percentage of
2020-21 the overall enrollment counts for
Maryland schools, they represent at
least $23.4 million ($12.9M state,
Findings and Recommendations: $10.5M local) in funding that was
misallocated to LEAs over the five-year
The report contains four findings period reviewed. Further, systemic
and six recommendations to assist issues identified at selected schools
the Maryland State Department of indicate that additional discrepancies
Education (MSDE) in improving likely exist.
their ability to ensure accuracy of
Over 92% (2,757) of the discrepancies
state aid enrollment counts provided were self-reported by LEAs to MSDE in
by LEAs (Local Education subsequent reporting. However, MSDE
Agencies). MSDE has concurred did not identify or act on these
with five of the six discrepancies during the reporting
recommendations. process or during the state aid program
audits completed.
An established grant adjustment process
for self-reported discrepancies and
improved audit methodologies would
ensure that further funds are not
misallocated as school funding is
increased through the Maryland
Blueprint for the Future legislation
 beginning in Fiscal Year 2023.


Maryland Code, Education Article §9.10, establishes the Office of the Inspector
General for Education to provide a central point for coordination of, and responsibility
for activities that promote educational accountability, integrity, and efficiency in
government.

The Maryland Office of the Inspector General for Education is an independent entity
within the government of the State of Maryland. The office is responsible for examining
and investigating the management and affairs of county education boards, local school
systems, public schools, and nonpublic schools that receive state funding to determine
if established policies and procedures comply with federal and state laws.

The OIGE operates a Hotline so anyone can easily report allegations of fraud, waste,
abuse, or financial misconduct occurring within the State. The OIGE receives
numerous reports from concerned employees, vendors, and the public, most of which
are either investigated by the OIGE or referred to local school system administrators
for investigation and disposition. To report educational fraud, waste, or abuse, call 1-
844-OIGETIP or e-mail [email protected].


 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

Table of Contents

Background 2

Objectives 4

Scope 4

Methodology 4

Related OIGE Reports 4

Audit Results and Recommendations

Finding 1 5

Finding 2 9

Finding 3 11

Finding 4 13

Audit Team 14

MSDE Response Appendix A

OIGE Clarification Appendix B


 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

Background
On April 9, 2021, the Maryland Public Policy Institute formally requested the Office of
the Inspector General for Education (OIGE) to investigate potential enrollment
irregularities as it pertained to state aid funding at Baltimore City Public Schools. After a
review of publicly available enrollment figures, OIGE determined that a statewide
investigative audit would best address the risk of enrollment irregularities as it pertained
to state aid funding.
The Maryland State Department of Education (MSDE) is required to obtain records of all
students enrolled in Maryland public schools. This information is used to determine
state aid eligible students and the amount of state aid to be distributed to local school
systems. State financial assistance to the 24 public school systems in Maryland is
made through the Foundation Program, and targeted student grants for Compensatory
Education, Limited English Proficiency, Special Education, and Disabled Student
Transportation.
Foundation Program
The Foundation Program is the major state general education aid program for public
schools, accounting for nearly half of state education aid. Prior to FY23, the total state
and local cost of the foundational program was determined annually through a detailed
formula codified by the Bridge to Excellence in Public Schools legislation1. The formula
incorporated local economic indicators as well as an annual student enrollment count.
Each school year, MSDE’s Division of Assessment, Accountability, and Information
Technology (DAAIT) collects student information as of September 30 from Local
Educational Agencies (LEAs) to determine the student enrollment count. Data from
each LEA’s student information system is submitted to MSDE through a Web Data
Collection System.
LEAs are required to report a State Aid Eligibility Code for each student. Code 01 is
titled “Eligible for State Aid” and the remaining codes are classifications of ineligibility.
DAAIT works with LEAs to reconcile, correct, and update the information submitted and
to verify accuracy of the Eligibility Codes. Eligibility for State Aid is determined by
requirements listed in Code of Maryland Regulations (COMAR) 13A.02.06.03.
Regarding attendance and enrollment, a student must be present at least 1 day in
September and have not been determined to have withdrawn on or before September
30 to be classified under Code 01.


1
AfullexplanationoffundingformulascanbefoundatAppendixJoftheDepartmentofLegislativeServices’Fiscal
andPolicyNoteforHouseBill1300.

2

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

When the reconciliation process is completed, each LEA Superintendent takes

accountability for the accuracy of the final enrollment count by signing a Verification of
Enrollment Count.
Attendance Requirements for LEAs
LEAs are responsible for maintaining attendance records in compliance with the
Maryland Student Records Systems Manual, which is codified in COMAR. A student is
“present” if the student is attending an instructional program approved by the State,
local school system, and/or school. If a student is not participating in an approved
instructional program, they are considered “absent” and school systems are required to
record an absence code indicating whether the absence is lawful or unlawful.
Withdrawal Requirements for LEAs
The Maryland Student Records Systems Manual provides specific requirements for the
dating of student withdrawals. For students who do not attend school, the withdrawal
should be dated as of the first day of that school year, July 1. For exits during the
school year, the withdrawal date is the date of the first school day after the last day of
attendance.
Targeted Student Grants
The Limited English Proficiency, and Special Education funding formulas prior to FY23
were also laid out in the Bridge to Excellence in Public Schools legislation. Like the
Foundation Program formula, they include local economic indicators and a count of
eligible students provided to MSDE from each LEA.
COMAR 13A.02.06 also details attendance and enrollment requirements for students to
be deemed eligible for funding under the targeted grants. See Exhibit A.
Exhibit A:
Grant Requirement
Limited English Enrolled in a public school in a local school system and
Proficiency receiving English language acquisition services through
a local school system on October 31 of the prior fiscal
year.
Special Education Enrolled in a public school in a local school system or
an education program operated by the State and
receiving special education services on October 1 of the
prior fiscal year.

DAAIT and other MSDE program offices provide reconciled enrollment figures to
MSDE’s Office of Policy and Fiscal Analysis who input them into the funding formula to
determine the total local and state costs for all components of state aid for the following

3

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

year. The cost determination is forwarded to the Department of Budget and

Management for the inclusion in state budget proposals presented to the General
Assembly. Once finalized, MSDE disburses 12 equal monthly payments to LEAs
beginning in July of the following year.
Subsequent Reporting from LEAs
To increase accountability and ensure that continuous records are kept for each student
throughout the year, MSDE also requires that LEAs submit student information as of a
chosen date in March and June each year. The subsequent collections are referred to
as the “Early” and “End of Year” Attendance Collections (subsequent reporting) and
include each students’ entrance and exit information, as well as their attendance totals
from the beginning of the school year through the date of the collection.

Objectives
The objective of the investigative audit was to determine whether students deemed
eligible for state aid met the COMAR requirements for attendance and enrollment.

Scope
The scope of the investigative audit was students reported by LEAs as eligible for state
aid (Code 01) for the school years 2016-17 through 2020-21.

Methodology
To accomplish the objective, OIGE conducted interviews with key personnel to
determine how LEAs report enrollment figures and how MSDE offices collect and
process the figures to determine funding amounts. In addition, OIGE conducted data
analysis of all enrollment and attendance data reported by LEAs to MSDE for school
years 2016-17 through 2020-21.

Related OIGE Reports

In addition to this state-wide review, OIGE conducted four concurrent local investigative
audits of individual LEAs’ processes regarding state aid enrollment counts:
21-0003-A Talbot County Public Schools
21-0004-A Dorchester County Public Schools
21-0005-A Baltimore City Public Schools
21-0006-A Prince George’s County Public Schools
Selections were made in order to review both large and small LEAs. Reports for these
investigative audits will be published at oige.maryland.gov/reports.

4

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

Audit Results and Recommendations

The following issues were noted during the investigative audit:
Finding 1: MSDE Has Not Detected and Remedied Enrollment
Discrepancies Self-Reported by LEAs
The subsequent reporting from the 24 LEAs for the period 2016-17 through 2020-21
indicate 2,757 students classified as Code 01 during the September Attendance
Collection had not met COMAR attendance or enrollment requirements for the
foundational program. These students fall into two categories:
1) No Attendance as of September 30
1,949 students did not have a recorded date of attendance on or before September 30.
995 of those 1,949 students did not have any recorded attendance during the school
year.

NOTE: The draft version of this report indicated 2,420 students without a recorded date
of attendance on or before September 30th. However, after the investigative audit
fieldwork and draft report, Prince George’s County Public Schools (PGCPS) discovered
an error within their student information system that had resulted in incorrect attendance
information being provided to MSDE in subsequent reporting. On April 19, 2022,
PGCPS provided new evidence that 471 students included in the draft report had at
least one day of attendance on or before September 30th. OIGE has updated all
relevant figures in the final report. As a result of OIGE’s work, PGCPS has rectified the
error in their student information system.

2) Withdrawn as of September 30
808 students who attended school in September had withdrawal dates on or before
September 30. 713 of the 808 students did not re-enter school at any point during the
year. The remaining 95 students re-entered November 1 or later.
The ineligible students funded by state aid were concentrated at three LEAs but were
consistent throughout the period reviewed. See Exhibits B & C.
Exhibit B:
LEA Number of % of Total
Ineligible Students
Montgomery County Public Schools 1,204 43.7%
Baltimore City Public Schools 875 31.7%
Prince George’s County Public Schools 212 7.7%
All Other School Systems 466 16.9%
Total 2,757

5

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

Exhibit C:
School Year Number of Ineligible Students
2016-2017 615
2017-2018 535
2018-2019 557
2019-2020 394
2020-2021 656
Total 2,757

A detailed review of attendance and enrollment records for the 2,757 students indicated
that 357 students were incorrectly deemed eligible for the Limited English Proficiency
Grant and 391 students were incorrectly deemed eligible for the Special Education
Grant. These students were not attending school to receive English language
acquisition services or special education services as of the days required by COMAR to
be eligible.
For each of the three attendance collections throughout the year, the MSDE DAAIT
Office provides LEAs with a detailed Data Collection Manual. The annual Early and
End of Year Attendance Collection Manuals indicate specific guidance for self-reporting
students who did not attend school in September. It states that these exceptions will be
reported to the MSDE Audit Office. See page 6 of the 2020-2021 End of Year
Attendance Data Collection Manual:

826 of the 2,757 records identified above were coded precisely as instructed in the Data
Collection Manuals by the LEAs. However, the MSDE DAAIT Office has not reported

6

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

any of these discrepancies to the MSDE Audit Office, or any external entity for
investigation or funding adjustment/recovery.
DAAIT officials stated that the primary objective of the subsequent reporting is for
attendance collection, and not for state aid funding requirements. Despite the language
in their Collection Manuals and instructions for identifiable coding, they stated that they
do not have the resources to mine the subsequent reporting for discrepancies.
OIGE obtained the funding formula worksheets from MSDE’s Office of Policy and Fiscal
Analysis and removed the above students from the enrollment count in each applicable
funding formula from 2016-17 through 2020-21 to determine the total financial impact of
these discrepancies. In total, $11,677,864 of state funds were misallocated to school
systems over the five years reviewed. In addition, the local funding requirement for the
foundational program was overstated by $9,903,675. In total, $21,581,359 of state and
local funds were disbursed to fund students who were subsequently self-reported to
MSDE as ineligible for funding2.
Regarding the initial failure by LEAs to accurately code the 2,757 students, OIGE
identified two primary contributive factors:
1) Data integrity is reliant on attendance practices at the school level
OIGE did not find any evidence of intentional deception as it pertained to incorrect
attendance records. However, school staffs often failed to initially record accurate
attendance for students.
To attempt to provide accurate information to MSDE as of September 30, school staff
undergo a rigorous process to attempt to identify all enrolled students who have not yet
attended school. This process is more complicated for schools that have fluid student
enrollments. For example, alternative high schools that receive students for short
periods of time for disciplinary or attendance purposes are more likely to be unaware of
enrolled students not attending (no-shows).
At one Baltimore City Public Schools (BCPSS) alternative high school in Baltimore City
in 2020-21, students who had not yet been provided a device for virtual learning were
initially being marked with a “present” attendance code in September in accordance with
MSDE guidance. Meanwhile, school staff was working to determine which students
were not attending virtual instruction for other reasons. Eventually, it was determined
that 107 students could not be located or had voluntarily dropped out. However, the
process to make this determination was delayed because the school’s attendance
monitor was out on extended leave and their replacement was not experienced with

2
Duetotheintricaciesofthefundingformulas,theadjustmenttotheenrollmentcountstoaccountforthe2,757
discrepanciesimpactedthefundingamountsforall24MarylandLEAs.Afullexplanationoffundingformulascan
befoundatAppendixJoftheDepartmentofLegislativeServices’FiscalandPolicyNoteforHouseBill1300.

7

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

BCPSS’ withdrawal process. The students’ attendance records were not updated, and
the withdrawals were not entered until after data had been sent from BCPSS to MSDE
in October. Therefore, the no-show students were determined to have been eligible for
funding. Accurate data was reflected in the subsequent reporting but was not acted on
by MSDE.
2) Limited time available to identify withdrawals and correct attendance data
COMAR 12.02.06.03 states that a student may not be included in the enrollment count
of a local school system if the student is not present on or after September 30 and the
LEA determines before filing the end of November adjustment report that the student is
withdrawn. COMAR’s language indicates an allowance of two months for LEAs to
gather, review, and correct their enrollment counts. However, due to Maryland’s
expedited budget process, there is no “end of November adjustment report”. Final data
migrations from LEA student information systems to MSDE occurred in late October or
early November during the school years reviewed. In practice, LEAs have only one
month to gather, review, and correct their enrollment counts.
Beginning in FY23, the Blueprint for Maryland’s Future legislation will provide MSDE
with a revised funding formula that provides increased local and state funding to LEAs.
However, it does not fundamentally change the provisions or timeline of the enrollment
counts used in the funding formulas.
Given the time constraints of the current timeline for providing and finalizing enrollment
counts, there is an inherent risk of students being coded incorrectly by LEAs. If MSDE
does not develop a process to adjust grant amounts for students subsequently self-
reported as ineligible, the annual misallocation of funds will continue at an increased
rate under the Blueprint for Maryland’s Future.
Recommendation 1: MSDE should evaluate the 2,757 ineligible students identified
and determine whether state aid funds should be recovered from LEAs.
Recommendation 2: MSDE should develop and document a process to identify
students self-reported by LEAs as ineligible for state aid funding during subsequent
reporting. A process to immediately adjust grant amounts to LEAs should be
developed. Annually, MSDE DAAIT should provide reporting to OIGE and the Maryland
State Board of Education of the number of students subsequently identified by LEAs as
ineligible and corresponding grant adjustments.
(Note: OIGE is providing specific recommendations to Baltimore City Public Schools
and Prince George’s County Public Schools in local reports 21-0005-A & 21-0006-A.
OIGE will subsequently conduct a similar detailed review of enrollment count processes
and procedures at Montgomery County Public Schools to determine whether

8

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

improvements can be me made to report students’ initial eligibility for funding more
accurately.)
Finding 2: MSDE Audit Office Has Not Utilized Effective Methods for
Identifying Enrollment Count Inaccuracies
The MSDE Audit Office conducts audits of each LEA’s state aid programs every two
years. The first stated objective of the audits is to determine whether LEAs accurately
report the number of students receiving services through the State Aid to Education
programs. The most recent audits for Montgomery County Public Schools, Baltimore
City Public Schools, Prince George’s County Public Schools, and Dorchester County
Public Schools did not uncover any instances of funding discrepancies related to
attendance or enrollment.
In 2015, BCPSS uncovered 236 students initially coded as eligible for state aid that had
not attended school during the 2014-15 school year during an internal investigation.
The discovery was made by reviewing their own subsequent reporting. BCPSS self-
reported these issues to MSDE, and a grant adjustment in the amount of $1,208,441
was made as part of the 2016 state aid audit. Despite this amount being the largest
single recovery made by the MSDE Audit Office from 2013-2021, analysis of
subsequent reporting from LEAs was not incorporated into their audit methodology.
The MSDE Audit Office does not currently utilize any original enrollment or attendance
data maintained by DAAIT, to include data from the September Attendance Collection
or the subsequent reporting. The Audit Office requests a random sample of students
from the September Attendance Collection for each LEA from DAAIT to be used in their
testing. They have not conducted any data analysis to assess and target identified
areas of risks in the overall enrollment counts.
As a result, the MSDE Audit Office did not detect or report the 2,757 instances of
ineligible students that were self-reported by LEA from 2017-2021, which follow the
same pattern as the 236 students identified to the MSDE Audit Office in 2016.
In addition to the self-reported discrepancies, OIGE performed analysis on the universal
data maintained by DAAIT to develop a judgmental sample of additional students with
low attendance or with early October withdrawals, as these students were more likely to
have been incorrectly coded as eligible for funding. A review of attendance records
revealed that 187 additional students beyond those self-reported to MSDE did not
attend school on or before September 30 or were not properly withdrawn on or before
September 30. See Exhibit D.

9

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

Exhibit D:
LEA Students Reviewed Ineligible Students
Identified
Prince George’s County 256 132
Public Schools
Baltimore City Public 140 53
Schools
Dorchester County Public 131 2
Schools
Talbot County Public 87 0
Schools
Totals 614 187

Because MSDE Audit Office’s methodology only utilizes random samples, it was less
likely for these students to be chosen for review, and less likely that discrepancies
would be identified. Further, each LEA is audited at the same frequency, regardless of
size or perceived risk.
The MSDE Audit Office’s failure to utilize risk-based tools and strategies has resulted in
a failure to meet their objective of determining the accuracy of enrollment counts. In
addition to the $21.6 million of misallocated funds identified in Finding 1, the local
findings represent an additional $1,878,4352 of misallocated funds, as well as an
indication that many more funds may have been disbursed for ineligible students that
were not detected by the MSDE Audit Office.
Further, their reporting has provided LEAs and other stakeholders with a false sense of
assurance of the accuracy of the enrollment counts used for state aid funding formulas.
Independently, BCPSS has instituted a process to identify subsequently reported no-
shows at their individual schools and provide feedback to Principals. However, without
any acknowledgement of these discrepancies by MSDE Audit Office reports, other
LEAs have not instituted similar accountability measures to attempt to improve the
accuracy of initial enrollment counts.
Recommendation 3: MSDE should evaluate the 187 ineligible students identified and
determine whether state aid funds should be recovered from LEAs.
Recommendation 4: The MSDE Audit Office should adjust their audit methodology to
better address their stated audit objective regarding the accuracy of enrollment counts.
At minimum, the methodology should include:
x Analysis of all student data provided by LEAs to MSDE throughout the years
being audited
x A risk-based approach to determine the frequency in which each LEA is audited

10

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

x A risk-based approach to determine students for testing who are more likely to
have been incorrectly funded

Finding 3: MSDE Has Provided Conflicting Interpretations Regarding

Withdrawal Requirements
COMAR 13A.02.06.03 states that a student may be included in the enrollment count if
they have not been determined to have been withdrawn on or before September 30. In
February 2022, MSDE DAAIT stated that they have interpreted this to mean a student
needs at least one day of attendance in October and that they have communicated that
interpretation verbally to LEA officials. However, there is no official documentation of
this interpretation.
Meanwhile, MSDE has provided several conflicting, documented guidance:
x The Maryland Student Records Systems Manual states that “after 10 school days
of consecutive unlawful absences, the student should be exited from the school
with an Exit Status ‘W’ and Exit Code ‘50’.” Exit Code 50 is described as “Not
Accessing Educational Services”.
x The Maryland Student Records Systems Manual also states that once a student
has exited, schools have 10 consecutive school days to ensure that the student
is receiving educational services. Upon expiration of the day 10 day window, the
student should be exited as a W50 and the date of exit should be the first school
day after the last day of attendance.
x In 2016, a MSDE official informed Baltimore City Public Schools that a student
needs a date of attendance within the first 10 days of October in order to be
deemed eligible for state aid funding.
Officials for all four LEAs reviewed indicated that they do not automatically withdraw
students after 10 consecutive unlawful absences as stated in the Maryland Student
Records Manual. Doing so would have unrelated consequences. For instance, it is
more difficult for schools to attempt to re-engage students who are no longer in
membership at their LEA. Truancy court proceedings become more difficult. Further,
students’ grades and schedules are deleted from the LEAs’ student information systems
when they are withdrawn. Therefore, a schedule must be completely rebuilt if a student
re-enters.
Although the practice of not withdrawing students after 10 consecutive unlawful
absences appears to be consistent, LEAs are taking different approaches when the
unlawful absences occur during the September 30 time window.

11

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

x Baltimore City Public Schools’ student information system automatically excludes

students from state aid eligibility when they have 10 or more consecutive
unlawful absences that includes September 30. The guidance they received
from MSDE in 2016 is specifically included in their system’s functional
requirements guide.
x Dorchester County Public Schools manually reviews their student information
system to identify and exclude these students from eligibility for state aid.
x Prince George’s County Public Schools includes all students as eligible for state
aid as long as they have one date of attendance in September and a withdrawal
has not been entered by the time of their last data submission to MSDE in late
October or early November. Officials stated that the withdrawal process, which
can take up to several months, only begins when a student logs their 10th
consecutive unexcused absence.
Baltimore City Public Schools and Dorchester County Public Schools both utilize Code
06, “Ineligible – COMAR 13A.02.06.01” to appropriately exclude these students from
state aid funding but to keep them in membership for re-engagement purposes. MSDE
provided data on all 5,040 students who were classified with this code from 2017-18
through 2020-21 which illustrated the inconsistent usage across the state. See Exhibit
E.
Exhibit E:
LEA Total Students Code 06 Students
Baltimore City Public 317,930 4,587 (91% of state total)
Schools
Dorchester County Public 18,951 38
Schools
Prince George’s County 536,313 3
Public Schools
Montgomery County Public 652,771 0
Schools

The Maryland Student Records Systems Manual also includes the following passage in
its’ section regarding the September attendance collection:
A student with a prolonged absence during September, who is not in attendance
on September 30, must be withdrawn unless school officials have determined a
reason to keep the students on the roll. In the absence of supporting evidence,
these students must be withdrawn. If court proceedings have been initiated for
non-attendance, the student must remain on the roll. If it is determined that
certain students must remain in membership, but are not to be included for State

12

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

Aid Calculations, the record must be coded with the appropriate State Aid
Eligibility code.
Although this passage does appear to allow for schools to not withdraw all students who
are logging consecutive unlawful absences, it supports the practice that they should still
be excluded from state aid funding. However, the lack of clear messaging from MSDE
has resulted in some school systems including ineligible students in their enrollment
counts for state aid. 63 of the 132 ineligible students identified in Finding 2 from
Prince George’s County were students who had 10 or more consecutive unlawful
absences that included September 30.
Recommendation 5: MSDE should amend the Maryland Student Records Systems
Manual to define how school systems should proceed when students log 10 or more
consecutive unlawful absences. The guidance should consider the impact on accurate
enrollment counts while also maximizing LEAs’ ability to effectively re-engage students.

Finding 4: MSDE Data Indicates Duplicate Funding for Students

In 29 instances during the period reviewed, a student was counted twice as eligible for
state aid funding. In 16 of the 29 instances, the student was counted twice as part of
the same LEA. In 13 instances, a student was listed as part of two LEAs. 12 of these
13 instances were students listed as eligible for funding for both Baltimore City Public
Schools and Baltimore County Public Schools.
OIGE was not able to determine the precise financial impact of the duplication of the 29
students due to the inability to determine which school system each student should
have been solely assigned to for the purposes of state aid.
Recommendation 6: MSDE should investigate the identified duplications and
determine whether state aid funds should be recovered from LEAs.

13

 InvestigativeAuditofMarylandStateDepartmentof
Education’sStateAidEnrollmentCounts

Investigative Audit Team

Dan Reagan, CPA, CIA, CFE

Supervisory Inspector General for Investigative Audits

Georgia Conroy
Investigative Auditor

14

Appendix A
 Appendix B
Richard P. Henry
MARYLAND OFFICE OF THE InspectorGeneral
INSPECTOR GENERAL FOR EDUCATION 
Douglas H. Roloff, III
DeputyInspectorGeneral

April 20, 2022

MEMORANDUM

To: Mr. Mohammed Choudhury

State Superintendent of Schools
Maryland State Department of Education
200 W. Baltimore Street
Baltimore, Maryland 21201

RE: MSDE Response to OIGE Investigative Audit 22-0001-A

The Maryland Office of the Inspector General for Education (OIGE) appreciates the Maryland State
Department of Education’s (MSDE) detailed responses to the draft recommendations for the
Investigative Audit of MSDE’s State Aid Enrollment Reporting. The response indicates a
commitment to improving processes and procedures that will increase the accuracy of future
enrollment counts. Additionally, due to new information provided by MSDE regarding “final
duplicate checks that are now in place”, the OIGE has concluded that Recommendation 7 has been
satisfied and this recommendation will be removed from the final report.

Nevertheless, there are several statements made in MSDE’s Recommendation Response Form that
require clarification based on evidence found during our investigative audit. Please see below:

x MSDE Statement: The student data that the MSDE collects from the local school systems are
correct at the time of the state aid enrollment submission. (Cover Letter, Page 1)

x OIGE Clarification: The overall conclusion of the investigative audit is that student data is
not always correct at the time of the state aid enrollment submission. Although MSDE cannot
detect the inaccuracies in real time, student ineligibilities noted in the investigative audit
report supports our recommendation to institute a reconciliation process. (MSDE has
concurred with this recommendation.)

x MSDE Statement: The Department maintains that state aid funding was not misallocated to
the local school systems. (Cover Letter, Page 1)

x OIGE Clarification: Allocation of state aid funding is done through a calculation that
incorporates enrollment counts. If enrollment counts are incorrect, the corresponding

Maryland Office of the Inspector General for Education

100 COMMUNITY PLACE, CROWNSVILLE, MARYLAND 21032 Phone: 410-697-9705  
 calculations and allocations are also incorrect. The responsibility for the initial misallocation
of funds lies with the Local Education Agencies’ (LEAs) initial failure to provide accurate
enrollment counts. However, MSDE shares responsibility for the failure to correct those
misallocations when LEAs subsequently report ineligibilities later in the school year and
adjustments to the allocations are not made.

x MSDE Statement: The percent of students identified by the OIGE ineligible for funding over
the five years ranged from 0.06% to 0.1%. That means, by OIGE’s logic, 99.9% or more of
the student population in Maryland was rightfully identified as eligible students over the five
years. (Cover Letter, Page 2)

x OIGE Clarification: The OIGE agrees that only a small percentage of students in annual
enrollment counts were subsequently reported by LEAs as ineligible (See Finding 1).
However, the subsequent judgmental sample of 614 students assessed by OIGE found that
over 30% of tested students were also ineligible (See Finding 2). Although it would be
inaccurate to extrapolate the exception percentage of a judgmental sample to the remaining
approximately 4.4 million students, it would be equally inaccurate to state that all the
remaining students were correctly identified as eligible over the five years.

In fact, the judgmental sample used in our audit only included 14 total schools across the State
of Maryland. Our audit uncovered several systematic issues with both attendance taking and
dating of student withdrawals. These issues indicate the probability of there being
significantly more ineligible students who have been funded during the period reviewed.

x MSDE Statement: The MSDE does not agree with the recommendation (that MSDE should
amend the Maryland Student Records Systems Manual to define how school systems should
proceed when students log 10 or more consecutive unlawful absences). The Maryland Student
Records Manual already provides guidance to the local school systems on how to proceed
when a student has 10 or more consecutive absences. (Recommendation 5)

x OIGE Clarification: The OIGE found that there are contradicting passages within the
Maryland Student Records System Manual (MSRSM) as it pertains to students logging 10 or
more consecutive absences. The MSRSM states, “the student should be exited from the
school with an Exit Status “W” and Exit Code “50””1. However, the “September
Attendance” section of the manual also refers to situations where a student must remain in
membership but be excluded from State Aid Calculations.2


1
2020 Maryland Student Records System Manual, Student Attendance, Unlawful Cause of Absence, Consecutive
Absences, page 45.
2
Ibid., page 60
Maryland Office of the Inspector General for Education
100 COMMUNITY PLACE, CROWNSVILLE, MARYLAND 21032 Phone: 410-697-9705  
 In fact, officials from LEAs reviewed indicated that they are not automatically withdrawing
students in alignment with the requirement listed in the MSRSM. In addition, LEAs have
varied interpretations of the vague statement listed in the “September Attendance” section
regarding exclusion from State Aid Calculations. It is the opinion of the OIGE that this
conflicting guidance has impacted State Aid Calculations and has resulted in an inequitable
allocation of funding for students having 10 or more consecutive unlawful absences including
September 30th.

Based on the concerns raised regarding this finding, the OIGE request that the MSDE
reconsider their position as to the recommended revision of the 2020 Maryland Students
Records System Manual governing September Attendance guidance.

NOTE: The draft version of this report indicated 2,420 students without a recorded date of
attendance on or before September 30th (Finding 1, Page 5). However, after the investigative audit
fieldwork and draft report were completed, Prince George’s County Public Schools (PGCPS)
discovered an error within their student information system that had resulted in incorrect attendance
information being provided to MSDE in subsequent reporting. On April 19, 2022, PGCPS provided
new evidence that 471 students included in the draft report had at least one day of attendance on or
before September 30th. OIGE has updated all relevant figures in the final report. As a result of
OIGE’s work, PGCPS has rectified the error in their student information system.

In closing, I wish to thank you for both your support and understanding throughout the investigative
audit process. The professionalism and assistance provided by your staff surely reflects MSDE’s
dedication of our school systems throughout the State of Maryland. Please feel free to contact Mr.
Dan Reagan, CPA, Supervisory Inspector General for Investigative Audits at (443) 721-4889 or by
email at [email protected] if you or your staff have any questions or concerns.

Respectfully,

Richard P. Henry
Inspector General

Maryland Office of the Inspector General for Education

100 COMMUNITY PLACE, CROWNSVILLE, MARYLAND 21032 Phone: 410-697-9705