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Unexpected expenses and a possible penalty in state aid could require the Prince George's County school system to make up to $100 million in cuts next fiscal year, according to a school official.

"Of course we all know that the funds are just not there, and tough decisions are going to have to be made," school system Chief Financial Officer Matthew Stanski said at a budget meeting Nov. 18.

Stanski declined to give details on the unexpected expenses. However, some of the costs may be due to salaries that the school system may have to pay to about 50 employees who were notified about layoffs or pay reductions after the date specified in their union contract.

The current school system budget stands at $1.7 billion.

A large portion of the budget meeting focused on a possible $26.8 million penalty in state aid the school system may incur for not meeting budget requirements this fiscal year.

State Attorney General Douglas F. Gansler issued an opinion Nov. 4 that said the school system could penalized for failing to meet state maintenance of effort requirements, which requires counties to provide schools with equal or additional funding as was provided the previous year.

Because of a $113 million county deficit, County Executive Jack B. Johnson (D) sought a waiver of the law in April — an effort the county school board opposed. After the request was denied, the County Council opted to bill the school system $11.8 million for debt service on school construction bonds, which was previously provided free.

"Unfortunately, the way our budgeting process works, whether the board approves a budget, it is not fully adopted until approved by County Council," Stanski said.

Gansler said the new charge to the school system was a violation of state law.

The school system is required to submit a letter signifying MOE certification to the state in early January, Stanski said. At that time, state superintendent Nancy Grasmick will review the certification and could penalize the school system.

The penalty is based on the amount of increased aid the county received from the state, according to Gansler's opinion, but Bill Reinhard, a Maryland Department of Education spokesman, said the attorney general's office is reviewing whether federal funds should be taken into account.

"There is some question as to whether or not federal funds will be included in the calculation ... which is crucial to Prince George's County," Reinhard said.

Officials were unable to say by press time how much the penalty could rise if federal funding is included.

Ron Watson, vice chairman of the county school board, expressed confusion about the possible penalty, which he said should be charged to the county instead of the school system.

"When the county decided to use MOE, the board said, ‘No we will not go along with this,'" Watson said. "We are kind of in this no-win scenario. ... If the county does not meets its obligations, we get a penalty, and that is why there is something wrong here. "

Superintendent William Hite Jr. echoed Watson's remarks and said if the county is found to have not followed MOE requirements, legislative action should be taken against the penalty, to amend state rules to penalize county governments instead of the school board.

"If a penalty is to be imposed, impose it on the agency that is reducing the funds," Hite said.

Stanski said that each school system department has been asked to complete and submit its budget to the school's budget office in case of budget cuts next fiscal year.

Board member Rosalind Johnson (Dist. 1) said the $26.8 million penalty in addition to the $11.8 million school construction charge could devastate the budget.

"How do we even begin looking at equity in the county with a budget that is millions and millions less?" Johnson asked.

The next finance, audit and budget meeting will be held Dec. 16 at the school board headquarters at 14201 School Lane in Upper Marlboro.

E-mail Megan McKeever at mmckeever@gazette.net.