About $12.3 million in state education funds went unused over several years while local school boards were frustrated by a lack of guidance on how to spend them, a state audit found.

The audit by the Maryland Office of the Inspector General for Education, released Feb. 6, chided state education officials for not giving adequate training on how to use millions in “concentration of poverty” funds distributed to school systems under the Blueprint for Maryland’s Future, a 10-year education reform plan. In written responses, the Maryland State Department of Education said it planned to implement new grant management policies by March 1.

In eight counties that were allocated those grant funds, which are focused on supporting students living in communities with high poverty and little access to health care and social services, about a quarter of the roughly $42.7 million went unspent in fiscal years 2020 through 2022, the report says, attributing the low utilization to deficiencies in training.

Although the law lays out 13 services the funds can be spent on, “several [local education systems] shared frustrations about the lack of clarification or guidance by MSDE staff about whether certain items, positions, or services could/could not be procured using [concentration of poverty] funding,” the report says, noting that school officials said state staff “would primarily provide only verbal guidance” on how to spend the funds.

The audit, which focused on funds allocated to Anne Arundel, Baltimore and Montgomery counties’ school systems, as well as five other local education agencies in Western Maryland and the Eastern Shore, found the state board had prepared various training materials related to the funds — but little documentation that the school systems were ultimately trained on how to spend them.

Instead, county school systems ended up using their allocated funds to pay for consultants to explain how to use them, the report notes.

As an example, the report says one school system entered a $4.1 million, five-year contract for “continued technical support in implementing a community school strategy.”

In fiscal year 2022, Montgomery County only spent 30% of over $4.7 million it was allocated for personnel grants and used none of its per-pupil grant money, the report says. The same fiscal year, Baltimore County spent less than half of the funds it was allocated, according to the report.

The office recommended that the state education department set up policies and procedures, including a monitoring process to make sure additional funds aren’t misused.

In its response to the audit, the state school board agreed with most of the inspector general’s findings and detailed a plan to communicate policies for using the funds, though disagreed with a recommendation for the education department to “establish an ongoing audit” of Blueprint expenses, saying that they had already hired a firm to probe grant spending.