Some school expenses, big and small, remain a mystery

By Jerry Zremski, Sarah Meklir, Christine Folivi and Zachary Intrater

The Local News Network is a student-powered nonprofit news organization led by professionals at the Philip Merrill College of Journalism at the University of Maryland.

If you take a look at some of the ways Maryland school districts spend your tax dollars, you may be left with an obvious question: Why?

In one major case, it’s not a question the spokesman for Anne Arundel County Public Schools was willing to answer. As a result, the third-largest school expenditure in the state remains unexplained.

However, other school districts explained far smaller but surprising expenses for catering at an Italian restaurant chain and retirement gifts at a local jewelry store.

Here is a look at some of the most mysterious expenses the Local News Network found when examining more than 26,000 vendor payments of $25,000 or more made by Maryland’s school districts between the 2018-2019 and 2021-2022 academic years:

In Anne Arundel County, the school district paid just over $694 million to something noted as Electronic Funds Transf Program.

It’s common for individuals, businesses and government entities to transfer funds electronically; you do that if you pay your bills online. But bank statements specify who got paid via electronic transfer. They don’t do what the Anne Arundel school district did, which is simply note that a huge amount of money has been transferred electronically without any clear indication of why or where it was transferred.

Mysterious as it is, Anne Arundel’s payments to Electronic Funds Transf Program ranked as the third-highest allocation to a public school vendor in the state, behind only CareFirst BlueCross BlueShield and Kelly & Associates Insurance Group.

The Local News Network contacted Bob Mosier, chief communications officer for Anne Arundel County Public Schools, multiple times to inquire about payments to the Electronic Funds Transf Program. 

At first, Mosier promised answers — but then he stopped responding to emails. As a result, Anne Arundel County’s biggest vendor outlay remains a mystery.

In Howard County, the public school system paid $746.5 million over from 2019 to 2022 to Kelly & Associates Insurance Group. That made Kelly & Associates the second-highest-paid vendor among the 6,009 companies that Maryland school districts did business with during that time.

“Prior to this fiscal year, we used Kelly & Associates Insurance Group to manage the payments for each of our benefit providers (medical, dental, vision, etc.) and Kelly & Associates Financial to manage all employee/employer payroll taxes and garnishments,” wrote Brian Bassett, director of communication and engagement for the Howard County Public School System.

While the project Local News Network conducted focused on school expenses between fiscal years 2019 and 2022, one 2018 expenditure stood out In Baltimore County: a $1.57 million payment to an “unknown vendor.”

In other words, district officials don’t know exactly where $1.57 million went. Charles Herndon, a spokesman for the district, blamed it on a massive ransomware attack that hit the school system’s computers in November 2020.

That attack led to a “catastrophic compromise of all BCPS functions and operations,” Herndon said. The data breach happened when a district employee opened an email attachment that was really a phishing attack. Recovering from that data breach cost the district more than $10 million, district officials said.

As for the data that was lost, “instead of creating thousands of individual vendors, a generic ‘unknown vendor’ was used to restore the accounting,” Herndon said.

While many districts didn’t report any 2018 school spending data because the law didn’t require them to do so, Baltimore County has been reporting that information since 2011, which is why the Local News Network was able to find that 2018 expenditure.

In Prince George’s County, the public school district spent $87,596.83 at Three Brothers Italian Restaurants between fiscal years 2019 and 2022. To be more specific, the district spent $55,321.53 at Three Brothers in Greenbelt during the 2018-2019 school year and another $32,275.30 at the restaurant’s Hyattsville location in the 2021-2022 school year.

The district appears to have a longstanding relationship with Three Brothers. While most school districts in the state didn’t start reporting their vendor expenses to the state until 2019, Prince George’s County has been doing so since 2012. Those older figures show the school district spent $82,505.60 at Three Brothers in 2017 and 2018.

Raven Hill, the district’s associate superintendent for communications and community engagement, indicated Three Brothers is a go-to caterer for school events.

“The catering expenses were spent across many schools, generally for student celebrations and staff/family meetings,” Hill wrote. “For context, schools often provide food at parent meetings to encourage attendance. Meals were also provided to students at several community schools (low-income population, wraparound services) as incentives.”

In Calvert County, school district officials haven’t been just buying school supplies, textbooks and computers. They’ve been buying wristwatches, too.

The district spent over $25,000 at JW Jewelers, a locally owned jewelry store in Prince Frederick, in 2021.

The expenditure was for 118 watches, costing roughly $218 apiece, that were gifted to retiring employees, according to Scott Johnson, the district’s chief financial officer.