HCPSS Announces FY 2022 Annual Comprehensive Financial Report (ACFR), Annual Audit Completion and Elimination of the Historic Health and Dental Fund Deficit

October 4th, 2022

The Howard County Public School System (HCPSS) has received an unmodified opinion from its external auditor, CohnReznick LLP, which is included in the Annual Comprehensive Financial Report (ACFR) for fiscal year (FY) 2022. The unmodified opinion signifies that the HCPSS financial statements are presented fairly and in accordance with generally accepted accounting principles. More significantly, the FY 2022 audit and ACFR represent an important milestone reflecting HCPSS’ steadfast focus on improving the financial management of the school system through the elimination of the historical deficit in the HCPSS Health and Dental Fund, reporting a fund balance of $5.95 million.

“Eliminating the health fund deficit is a significant achievement and a testament to our unwavering commitment to ensure the school system is on strong financial footing,” said Dr. Michael J. Martirano, Superintendent.

The Superintendent was first made aware of the deficit in the Health and Dental Fund in May 2017, within days of beginning his tenure with the school system. “I remember the conversation with our County Council in those early days regarding the importance of fixing this structural deficit to ensure that we take care of our employees’ health care and restore credibility in how the school system manages taxpayer dollars.”

“When I was elected to the Board in 2018, I went in believing that we had an insurmountable obstacle in the health and dental fund deficit,” said Vicky Cutroneo, Chair of the Board of Education. “Instead, I am incredibly proud and grateful for the collaboration and hard work by Dr. Martirano and the HCPSS team to fully eliminate the health and dental fund deficit. It took four years of cost cutting, better budgeting, supplemental funding from the County Executive and County Council, and fully funding our annual commitment of the benefits of our HCPSS staff to get to this day. It is truly remarkable what we have achieved working together as a team.”

HCPSS staff presented the deficit elimination plan in November 2019 to the Board of Education following an adverse audit opinion in the FY 2019 ACFR. Through strong fiscal management and by fully funding projected health costs in fiscal years 2020, 2021 and 2022, as well as a $10 million one-time contribution from County Government, HCPSS was able to realize its commitment to eliminate the Health Fund deficit. The FY 2022 ACFR reports a Health and Dental Fund balance of $5.95 million as of June 30, 2022, compared to a deficit of $9.7 million as of June 30, 2021.

Additionally, the ACFR notes a $6.4 million Unassigned Fund Balance as of June 30, 2022.

The full report is posted online.