The Maryland Office of the Inspector General for Education released a report of its investigative audit that found that Baltimore City Public Schools may have paid taxi companies nearly $750,000 in charges not supported by attendance records or rates.
The report said BCPS also failed to “satisfactorily” monitor a promissory note between the district and the Yellow Cab Taxi Company for a $1.2 million debt based on a 2018 report by the Office of Legislative Audits, which found that the district had paid for “duplicative administration fees and an unapproved mileage rate.”
Monday’s report found that between the 2018-19 school year through 2021-22, there was a “potential $631,547 in charges from taxicab vendors that did not appear to be supported by the student’s attendance information,” and “$86,753 in overpayments to taxicab vendors based on unsupported rates.”
The Inspector General’s report “was to determine whether taxicab vendors are complying with all contractual and relevant state requirements while transporting BCPS students.”
The report found that the district paid one company, Yellow Cab, for rides that students did not appear to take because they were absent, withdrawn, transferred or graduated.
In February 2022, the report says, “Yellow Cab invoiced 18 roundtrip rides for Student A. Student A was marked present for nine days when reviewing attendance for the same month.”
“For 25 students who withdrew or transferred to another school system, Yellow Cab provided ride vouchers and invoiced for taxicab services that occurred after their last recorded date of attendance,” the report also said.
“The results of our data analysis indicate that BCPS has paid for taxicab services for students not attending school and that Yellow Cab potentially provided fraudulent invoices and vouchers,” the report said.
Despite the district reviewing vouchers for taxicab companies, the report found that the district didn’t determine why there were discrepancies.
Investigators “noted several instances of vouchers for Martin Luther King Day, a day when school is not in session, signed by both driver and student. While the Transportation Office caught these vouchers and did not pay for the trips that day, they did not perform any further work to ascertain why they were created and signed.”
The Office of the Inspector General for Education referred its findings to the Maryland Attorney General’s office, which confirmed to Chalkboard that it received the referral but could not confirm or deny the existence of an investigation.
Of the four other taxicab companies with which the district contracted besides Yellow Cab, one other taxi company was investigated for instances where students were purportedly taken to school after graduation.
But the school district’s response contained within the report said that the discrepancy could have come from students who rely on taxicab services needing to come to school for events even after graduation.
The district told Chalkboard Review that Yellow Cab was taking advantage of the system it had in place, and it has cut down its reliance on taxicab companies. It also said that the discrepancies were in the early years of the review period and that the district’s oversight has been working.
“City Schools has collaborated with the OIGE to get to the bottom of this matter to ensure that taxicab vendors do not violate their obligations to City Schools students,” the district said in a statement Monday. “As noted by the OIGE, these discrepancies were overwhelmingly the result of a single vendor that ‘potentially provided fraudulent invoices and vouchers’ that sought to circumvent City Schools’ existing controls.”
The Office of Inspector General for Education said that the district’s invoice review process did not contain adequate controls to detect fraudulent charges and that the district should attempt to recover the education funds spent on them.
The district also made $86,753.62 in payments to vendors that were not supported by Student Transportation System cost reports, according to the investigation.
But the school district said that it needed to increase the minimum fare for taxicab rides in 2020-21 because drivers weren’t willing to drive students short distances without the extra incentive. It added that it “recognizes the importance of memorializing this rate increase for record-keeping purposes.”
The report recommended City Schools work on getting the funds owed by Yellow Cab from the promissory note. The outstanding balance was $479,030.26 as of Feb. 10, 2023.
Yellow Cab was replaced in 2021 by zTrip, which is owned by WHC MD, LLC. The company contends that the district never included any obligations concerning the promissory note in its contracts, so it has no obligation to pay.
It also maintains that the district owes it $230,000 for invoice deductions since September 2019.
“City Schools is working to ensure repayment of the promissory note,” the district said in response to the investigation’s findings.
“Moreover, in light of the OIGE’s findings and any subsequent investigation by the OAG involving potential vendor fraud, City Schools may need to seek recoupment of additional funds and potentially reevaluate its relationship with this vendor, if it does not cooperate,” it added.