Outreach Word Academy

“Judge recommends state revoke Outreach Word Academy's charter; schoolplans to appeal.” Victoria Advocate (TX), 7/15/2011

An administrative law judge recommended Friday afternoon the Texas Education Agency revoke Outreach Word Academy's charter school status.

The decision comes after what the TEA alleged was nearly a decade-long mismanagement of state and federal funds.

The school maintains no wrong-doing, blaming their financial problems on faulty software, lack of assistance from TEA and its conservator and issues with auditors.

"Do we have fault in anything? Yeah, trusting people to do what they're supposed to do, especially when we're paying them," Outreach's business manager and founder, Elaine Phillips said after being told of the judge's decision.

She founded the charter school in 2002 with her husband, Samuel Phillips...

Administrative Court Judge Pratibha Shenoy wrote the following, among other things, in her 37-page findings of fact:

The academy withheld payments from employee paychecks for federal taxes, but those payments were never sent as required by the IRS.

The school was routinely late on submitting required financial reports to various agencies

In 2006, the IRS issued a Notice of Levy against the school for $184,719.37 in unpaid payroll taxes, interest and penalties. That number now reaches more than $200,000.

A month later, Outreach Academy filed Chapter 11 bankruptcy.

For six years, the school reported a deficit of net assets. The latest audit in 2010 showed the school to have a deficit of net assets of $996,942.

Outreach Academy was unable to adequately document how federal funds were spent, which led to the school being required to pay back $783,093. The school has not paid or reduced the debt...