Inspector General for Education flags closeout error, reports rise in complaints as office seeks staffing

The Maryland Office of the Inspector General for Education (OIGE) told the Education and Economic Development Subcommittee on Oct. 27 that a fiscal closeout error tied to the Maryland State Department of Education (MSDE) resulted in roughly $1.25 million being assigned to an MSDE default account and not applied to OIGE payroll.

Laura Hyde of the Department of Legislative Services opened the hearing with a budget analysis. Hyde said OIGE’s proposed fiscal 2026 operating budget increases by $44,000, or 1.6 percent, to $2.7 million and noted that fiscal 2026 is the first time OIGE’s budget is being heard separate from MSDE. Hyde also referenced that MSDE initially reported a $1.3 million reversion in OIGE’s fiscal 2024 closeout that was later determined to be in error.

Richard P. Henry, Maryland’s Inspector General for Education, told the panel the error was discovered after an internal review. “This error amounted to approximately $1,250,000 and I want to assure this committee that this error has been corrected,” Henry said. He said the arrangement of OIGE’s budget being managed through a shared services agreement with MSDE has caused repeated closeout issues and that Secretary Grady directed staff to separate OIGE’s budget from MSDE to create a truly independent agency.

Henry also summarized his office’s recent work and audits. He told the committee OIGE experienced a 62 percent increase in complaints over the previous year and a 918 percent increase since 2020, and that last year his office identified more than $13 million in financial mismanagement. He said OIGE underwent a peer review by the National Association of Inspectors General and an Office of Legislative Audits review that “did not report any negative findings or exceptions.”

Hyde’s analysis, cited by the committee, shows OIGE’s fiscal 2026 budget would allocate roughly $2.5 million, or 91 percent of the allowance, to salaries and fringe benefits and about $233,000, or 9 percent, for routine operating expenses. The agency’s personnel count is listed as 16 positions in fiscal 2026, a net reduction of 0.5 positions from fiscal 2025 due to converting a contractual position to meet target budget requirements.

The DLS analysis also summarized OIGE’s 2024 work: four administrative investigations, three audits, and four management alerts to local education agencies; three of 11 investigations resulted in findings with recommended actions. Hyde’s presentation asked OIGE to report on the status of recommendations and actions taken by MSDE and local education agencies to remediate those issues.

Henry told the committee that MSDE has updated guidance on mandatory reporting and will implement a compliance mechanism to ensure local education agency staff complete mandatory trainings. He also said MSDE will amend the statewide teacher employment-history review form to include an under‑penalty‑of‑perjury clause and that OIGE recommended MSDE work with stakeholders to review and amend COMAR regulations for language consistency.

Henry said OIGE asked for additional staff but that the request was denied; he added that the staffing change from 16.5 to 16 positions will result in the loss of the agency’s certified public accountant. Committee chair remarks thanked Henry and his team for their work; no committee questions were recorded during the OIGE presentation.

The Department of Legislative Services recommended concurrence with the governor’s allowance for OIGE in its analysis.

The subcommittee moved on to the next agency after the exchange, and OIGE representatives said they were available for further questions and follow up.