Atlanta Preparatory Academy

“Atlanta school board considers own police force.” Atlanta Journal-Constitution (GA), 1/14/2013

“... The board on Monday also decided the fate of Atlanta Preparatory Academy, voting 8-1 (Byron Amos dissenting) to follow Davis’ recommendation not to renew the charter of the school. APS executive director of innovation Allen Mueller told the board the school has underperformed academically and has financial problems.

According to Mueller, the K-8 school with about 450 students ranks in the bottom 20 percent of schools statewide in academic performance; its enrollment is 45 percent lower than originally projected; and it owes $801,384 to for-profit education management company Mosaica Education, Inc.

Atlanta Prep board members and Mosaica co-founder and president Gene Eidelman said afterward the school will take its case to the state charter commission, which was approved by voters last November in part to consider charter proposals rejected by local school boards...”

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“Atlanta school facing loss of charter.” Atlanta-Journal Constitution (GA), 1/2/2013

The Atlanta school board will hear arguments in January whether to renew the charter of Atlanta Preparatory Academy or follow a staff recommendation to terminate it in June...

The dispute over renewal illustrates the dynamics and nuances of charter school relationships with local school boards, especially charters run by for-profit management companies that collect taxpayer funds from the district and extract hundreds of thousands of dollars in management fees.

Allen Mueller, APS’s executive director of innovation, told the board Dec. 3 the case against Atlanta Prep’s renewal is clear-cut and the school’s failings manifold. Atlanta Prep ranks in the bottom 20 percent of schools statewide in academic performance; its enrollment is 45 percent lower than originally projected; and it owes $801,384 to for-profit education management company, Mosaica Education, Inc., he said.

Mosaica has agreed to restructure the loan to eliminate a $568,000 balloon payment due in June, said Mueller. But the financial arrangement is still “untenable” because it’s a potential threat to the autonomy of the board, he said. The state of Georgia recommends charter boards have the independence to overrule their management companies...

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“Charter Founder Profits; Students Struggle.” East Atlanta Patch (GA), 12/11/2012

...In December 2006, Mosaica’s President Gene Eidelman filed a charter petition to open the Atlanta Preparatory Academy (APA).  The charter application indicates that non-profit APA intended to contract with for-profit Mosaica to provide all services.

Unlike Grant Park’s community-based Atlanta Neighborhood Charter School, APA was not founded by a group of local parents seeking better options for their kids. Instead, Gene Eidelman was joined by a team of three outsiders, none of whom live in the community where APA planned to operate its school and none of whom send children to the school...

The application acknowledged a conflict of interest as APA’s President was also the founder, owner, and President of Mosaica.

Undeterred by this conflict, the APS Board of Education approved the application...

Since the Board of Education approved the school’s charter five years ago, APA has been a revolving door for board members who join then leave the organization... None of the individuals who have served as CFO appear to have earned a degree in finance or accounting...

This instability and lack of financial experience stands in stark contrast to the consistent financial leadership seen at Atlanta’s successful charters...

Much like Mosaica’s other schools, APA’s students rank among the bottom of the pack on Georgia exams...

Importantly, the school’s highest performing students are 7th graders who received their K-4 educations elsewhere, prior to APA opening...

In addition to the charter’s dismal academic achievement, a review of APA’s financial statements raises questions about whether the school has been a good steward of public resources...

The Management Agreement between APA and Mosaica calls for a fee of 12.5% of per-pupil revenue received by the school, which in 2012 amounted to $577,716. It goes on to say that this fee “will not preclude the payment of additional consideration,” paving the way for Mosaica to charge more for any services not covered under the Management Agreement...

Only 36.2% of APA’s revenue for the year ended June 30, 2012 actually went toward instruction. This was the lowest percentage of expenses allocated to instruction among all of Atlanta’s charter schools...

To date, APA has spent close to one million dollars of public money on a site which in no way contributed to education...

[READ THE WHOLE PIECE]

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Citizens of the World Charter Schools

“Brooklyn Charter School Targets Rich, White Parents, Enrollment Plan Shows.” DNAinfo.com (NY), 4/23/2013

BROOKLYN — If you want to be a citizen of the world, it helps to be rich.

Though it's moving into a school where more than 90 percent of students qualify for free and reduced lunch, the controversial Los Angeles-based Citizens of the World Charterschool is actively recruiting affluent families for its first year in Crown Heights, DNAinfo.com New York has learned.

What's more, the primary engagement strategy for its New York flagship school in Williamsburg is geared almost exclusively at white parents, according to an internal enrollment plan obtained by DNAinfo.

"Through targeted outreach and recruitment, our schools are intentionally designed to reflect their surrounding communities and the larger society in terms of race, ethnicity and socioeconomic status," the charter network says on its website.

But the New York enrollment memo seems to directly contradict that statement, with the most time and resource-intensive recruitment tools clearly aimed at a small pocket of affluent families, while cheap, low-impact tactics like handing out fliers reserved for Headstarts and churches where recruiters are instructed to "lean towards" black and Hispanic families.

A chart titled CSD 14 Priorities lists the recruiters' top strategy as "engaging core parent group" and describes the target of that strategy as "middle/upper income, predominantly white."

In District 17,  the top priority is to "create core foundation of contacts," a strategy again targeted exclusively at "middle/upper income" parents.

Roughly half of the engagement strategies outlined in the memo are specifically intended to attract those same targets.

One-on-one parent meetings and one-on-one meetings with local pre-schools are saved for "middle/upper income" groups, whereas Headstarts are earmarked for flyering and group info sessions.

Where local preschools and Headstart programs were tough to differentiate, as in Crown Heights, recruiters are cautioned that not all may be "hot targets."

It's not just the paperwork that's skewed to exclude in Crown Heights — the charter's parent information session was held at the Brooklyn Public Library's Central Branch, more than two miles from P.S. 221 but a stone's throw from the district's wealthiest parents in Prospect Heights.

While Citizens showers its attention on affluent families, parents at P.S. 221 say they've barely heard from the school.

"There’s been no community outreach or interaction," one mother of three who declined to give her name for fear of losing her job told DNAinfo in March.

"We heard them speak for about two minutes — that’s been the breadth of our interaction with the folks at Citizens."

Citizens of the World did not immediately respond to repeated calls for comment.

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MORE RESOURCES

“Parent exposes Citizens of the World Charter Corporation's misdeedspart 1.” LA Schools Matter blog, 7/14/2013

“Citizens of WHAT World? Charter's recruiting tactics and leakeddocuments.” NYC Public School Parents blog, 4/27/2013

“Parents Sue State for Approving Citizens of the World Charter School.” DNAinfo New York, 1/29/2013

“New Charter for Northern BrooklynFuels Debate Over Gentrification.” WNYC, 12/20/2012

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daVinci Institute

“Former da Vinci Institute teacher sentenced to five to 20 years inprison.” MLive.com (MI), 8/22/2012

JACKSON, MI – A former da Vinci Institute teacher is going to prison for five to 20 years for having a sexual relationship with a 15-year-old student.

Jackson County Circuit Judge John McBain sentenced Matthew Lusby, 28, Wednesday morning for first-degree criminal sexual conduct.

Lusby pleaded guilty to the charge in July.He admitted to having oral sex with the girl early this year. She was then a student of Lusby, who worked as a math teacher at the public charter school in Summit Township...

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“Former da Vinci teacher pleads guilty to first-degree criminal sexualconduct.” MLive.com (MI), 7/24/2012

JACKSON, MI – A former da Vinci Institute teacher who had a sexual relationship with a 15-year-old student pleaded guilty on Tuesday to a single count of first-degree criminal sexual conduct...

Da Vinci hired Lusby in the summer of 2009. He resigned on Feb. 23 to take a substitute teaching position at another school, but did not reach an agreement with the other district.

When hired, Lusby passed a criminal background check.

This is his first brush with the law, Rezmierski said.

At da Vinci, Lusby was told he needed to improve classroom control and a “passive aggressive nature toward students,” and once had to apologize for throwing a referees flag at a football game.

Last fall, the principal and superintendent told him he should not be giving the girl a ride to school, especially when alone...

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Eric Mahmoud charter schools

“Georgia file connects Twin Cities charter school, fraud scheme.” Star Tribune (MN), 3/22/2013

When the news broke last summer that charter school entrepreneur Eric Mahmoud had entered a guilty plea to a mortgage fraud charge in Georgia, Mahmoud had a ready comeback for the Minneapolis school district, under whose authorization he was opening another charter school.

“I assure you that this was a personal, residential matter in Georgia and had nothing to do with Seed Daycare, Harvest Prep or any other educational institution,” Mahmoud told Sara Paul, the district’s liaison with charter schools, in an Aug. 16 e-mail.

In that case, Mahmoud has some explaining to do.

According to an investigative file compiled by Georgia authorities, there are at least two connections involving the school with the deal...

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“High Performing Charter Schools: Beating the Odds, or Beating theTest?” National Education Policy Center blog, 8/30/2012

...In Minnesota, birthplace of the charter school movement, one charter school operator labeled an “odds beater” has put a new twist on the concept. Eric Mahmoud, a former engineer and convicted mortgage fraudster, operates a group of segregated charter schools targeted at black, inner-city poor children that employs longer school days and years, strict discipline, and an unabashed strategy of beating state achievement tests.

For his success in raising math and reading scores, Mahmoud has been given rock-star status among charter proponents and recently was inducted into the National Alliance for Public Charter Schools hall of fame. In return, the Minneapolis school board recently awarded him the right to open four more charter schools sponsored by the city's school district, all presumably to be run in what a local conservative columnist laudingly called his “drill and kill” style. News stories and opinion pieces from traditional to the alternative press have nonetheless sung his praises, so desperate is the reform community to raise test scores. Meanwhile, almost no one has questioned the efficacy or morality of deliberately segregated schools, nor ones so focused on improving specific test scores. It seemed that, until very recently, Mahmoud could do no wrong.

Three weeks ago that might all have changed with a series of investigative stories in the Minneapolis Star Tribune by veteran reporter Steve Brandt highlighting fiscal and management questions that, given the lax controls on charter schools and Mahmoud's previous mortgage crime are unsurprising. Among Brandt's cumulative reporting is the following:

• Mahmoud's combined salary for his duties running charter schools (which total 900 enrollment) and their parent organization amounted to $273,000, more than any other superintendent in the state. In addition his wife, whose occupation is listed as “secretary,” took home $105,000, and his daughter got $28,000 as an “administrative aide.”

• Three of the four board members of the schools' parent organization, called “Seed Daycare,” which leases property to the school and provides administrative services, are Mahmoud family members.

• A letter from the charter school's authorizer “asserts that teachers whom Harvest (one of Mahmoud's charter schools) paid as contractors clearly fall under the IRS definition of employees.”

• The school's authorizer, Audubon Center of the North Woods, sent a “letter of deficiency” to Mahmoud asking for clarification of the organization's finances and for an explanation of “frequent payments among Mahmoud's organizations and Mahmoud himself,” and that “it's unclear what they are for and whether state money that supports Harvest and related entities is being used appropriately.”

• The Minnesota Department of Education is seeking to recoup money it granted to Mahmoud for an earlier, failed charter school used for its construction and to equip it. The MNDOE turned this issue over to the state auditor.

• Mahmoud, who operates deliberately segregated schools, is claiming racial discrimination, a claim disputed by the state, in the revocation of a $300,000 grant to one of his schools. The grant was to be used for a federally funded program called Reading First, which required the school to hire a full-time literacy coordinator and to use licensed teachers in the program, neither of which Mahmoud did.

But more important than the financial and management problems at Seed schools is the nature and structure of the educational pedagogy. The schools teach to the tests. Not just teach to them, but engineer high test scores with frequent testing, 100 minute blocks of reading and math each day and other methods...

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“Mahmoud, MDE clashed over pulling grant.” Star Tribune (MN), 8/20/2012

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“State inquiry focuses on failed north Minneapolis school.” Star Tribune (MN), 8/15/2012

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“Mahmoud's 273K salary raises eyebrows.” Star Tribune (MN), 8/15/2012

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"State examining finances of charter founder's schools.” Star Tribune (MN), 8/10/2012

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Mosaica Education

“Charter Founder Profits; Students Struggle.” East Atlanta Patch (GA), 12/11/2012

From its headquarters one block south of Wall Street, Mosaica Education claims to operate with a simple mission: “To empower students to learn and achieve – every child, every day.”

This for-profit charter management company was founded in 1997 by Sandy Springs resident Gene Eidelman and has since expanded to a network of 90 schools, generating more than $125M in annual revenue.  For several years, Inc. Magazine has ranked Mosaica as one of the fastest growing companies in urban America.[i] 

Unfortunately, students attending schools managed by Mosaica have not seen their educational trajectories rise with the management company’s revenue.  Instead, Mosaica’s students around the country consistently underperform their peers...

During Mosaica’s short tenure on the national stage, it has found itself immersed in a series of scandals across the country.

The Lafayette Academy Charter School opened in the fall of 2006, paying Mosaica $773,000 for the first year of a five-year management contract. Less than 10 days into the school year, the charter’s governing board started “noticing problems.” In a lawsuit filed against Mosaica, the governing board alleged that the management company failed to align its curriculum to Louisiana standards, failed to establish an after-school program for struggling students, and failed to properly organize transportation to and from the school.  On September 14, 2007, an arbitrator awarded the governing board a $350,000 judgment against Mosaica and upheld the school’s termination of its management agreement.

Two years later, Mosaica’s Howard Road Academy in D.C. was embroiled in a cheating scandal when a student announced to her exam proctor that she knew all the answers to the DC-CAS standardized test because she had been given the test to practice the day before.  The Washington Post later reported that Mosaica administrators distributed tests prior to exam day for “extra practice

In April 2012, Mosaica’s STEAM Academy of Winston-Salem, North Carolina faced revocation of its charter for financial problems and low academic performance. Just before annual exams were to be administered, The Winston-Salem Journal reported that Mosaica hired Susan Willis to run the school.  Prior to landing this job, Ms. Willis was fired by her previous employer when an investigation found that she conspired to boost test scores as the principal of William Flemming High School in Roanoke, Virginia.  Mosaica claimed to be “aware of a testing irregularity,” when hiring Ms. Willis, but “didn’t think it was anything significant.”...

Just last week, the Detroit News reported that Mosaica’s newest school in Muskegon Heights, Michigan has struggled to maintain a stable staff during its first year of operations. The principal quit before classes started, and just three months into the school year, 25% of the teachers have also left the school. ...

A comprehensive analysis conducted by Arizona State University lists the first 36 schools founded by Mosaica since it began operating in 1997.  Twenty seven of those schools have since been shut down by local authorizers or have extricated themselves from Mosaica’s management.

Of the nine which survived, eight can be classified as categorical failures...

The only possible beacon of success among Mosaica’s first 36 education attempts is the Columbus Preparatory Academy. Founded in 2004, until recently, the school has struggled...saw its performance undergo a meteoric rise to the 81st percentile on the state’s 2011 tests.

Even if this single-year increase is an accurate reflection of lasting student growth at Columbus Prepartory Academy, Mosaica has demonstrated no capacity to duplicate the success elsewhere. Instead, the organization seems willing to accept a certain level of school closures, focusing instead on a strategy of opening new schools. During the time the network watched 27 of its first 36 schools close, it was able to open more than 75 new schools. As long as Mosaica opens more schools than it sees closed each year, its revenue can continue to grow...

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STEAM Academy

“STEAM Academy of Winston-Salem relinquishes charter.” Winston-Salem Journal (NC), 4/4/2013

... The State Board of Education on Thursday accepted the voluntary relinquishment of the operating charter that allowed the STEAM Academy of Winston-Salem to operate.

The Winston-Salem school has seen its enrollment plunge by more than 70 percent over the last seven years while the school's debts skyrocketed. Its operators are voluntarily giving up the charter.

Last month, it was reported that the school's general fund was more than $700,000 in debt. Reports from as far back as April 2011 show the school was in financial trouble.

The school had a funded average daily membership, or enrollment, of 102 students, compared to 153 in 2010-2011 and 379 in 2006-2007...

About four dozen charter schools have been disbanded since the mid-1990s, when they started operating free of many of the rules governing most public schools.

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“STEAM Academy in financial trouble.” Winston-Salem Journal (NC), 3/11/2013

A Winston-Salem charter school is once again in hot water with the State Board of Education.

State officials are questioning whether downtown’s STEAM Academy has enough money to keep the doors open for another year. A report presented to the board last week shows the school’s general fund is more than $700,000 in the hole. The school added more than half a million dollars in debt in just the last year.

According to the state board’s report, there is substantial doubt about the school’s ability to continue. The school has been placed on disciplinary status for financial noncompliance. It is the most serious stage of financial warning. According to state board policy, schools may be dictated to undergo corrective action or even have their charter revoked...

It’s not the first time the STEAM Academy’s finances have been called into question. Concerns about academic performance, governance and financial solvency have plagued the school for several years. State Board of Education reports from as far back as April 2011 show the school struggling financially. A sharp drop in enrollment is causing many of the school’s problems, Medley said...

The STEAM Academy opened as the Downtown Middle School in 1997. Its charter was renewed for another 10 years in 2007. The school changed its name to the STEAM Academy, emphasizing its curriculum focus on science, technology, engineering, the arts and math in 2011 as an attempt to rebrand and combat declining enrollment. The school originally did not report the name change to the State Board of Education and was put in governance noncompliance for not seeking approval first. The name change was subsequently approved, as was a contract with the Mosaica, a national company brought in to oversee the school.

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Troubled school's principal fired previously over testing scandal.” Winston-Salem Journal (NC), 4/9/2012

The principal of STEAM Academy, a Winston-Salem charter school facing a do-or-die set of standardized tests this spring, was fired in 2009 after a Virginia state investigation blamed her in a testing scandal there...

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White Pine Charter School

“Idaho Charter School Principal Resigns Following Burglary Arrest.” Boise Weekly (ID), 7/24/2012

The homepage of the White Pine Charter School in Ammon reports that Melinda Christensen has taken over as interim principal at the school in the wake of the resignation of Terry Rothamer.

White Pine Charter's board of directors met in emergency session the afternoon of July 23 to consider its options after Rothamer was arrested July 11 in connection with a burglary at an Eastern Idaho restaurant, leading to his resignation. The Bonneville County Sheriff's Office reported that Rothamer appeared to be drunk at the time of his arrest.

A school spokeswoman told the Post Register that Rothamer, who had served as principal at White Pine Charter for three years, resigned voluntarily...

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“Ammon charter school principal charged in burglary.” KIDK (ID), 7/11/2012

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William and Josephine Dorn Charter Community School

“Charter school gets too much state funding.” KOAT (Albuquerque, NM), 12/4/2012

ALBUQUERQUE, N.M. —Target 7 learned a new charter academy grossly overestimated its enrollment numbers, and now the school will have to pay the state back for money it didn’t deserve.

The William and Josephine Dorn Charter Community School sits at the Eastern Edge of the South Valley. According to the state’s Legislative Finance Committee, the academy received more state money than it was owed for the entire year because it estimated it would have 90 students when it actually had nine...

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The Project School

Bank foreclosing on former charter school property.” Indianapolis Business Journal (IN), 2/25/2013

Old National Bank is suing the operator of a charter school that closed last summer in Indianapolis, claiming it failed to pay off the $1.8 million balance on its mortgage.

The Project School in August lost a court battleto stay open after Mayor Greg Ballard revoked the school’s charter due to poor test scores and financial issues...

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“Ballard moves to shut down The Project School.” Indianapolis Business Journal (IN), 7/17/2012

It looks like there will be no back to school at The Project School, a charter school just northeast of downtown.

Indianapolis Mayor Greg Ballard announced Tuesday evening that he intends to revoke the charter that gives The Project School the authority to operate. Ballard cited poor test scores and “recently discovered financial problems.”

The four-year-old school, which is publicly funded, has never seen more than 30 percent of its students pass both the math and reading portions of the state standardized ISTEP test...

A notice of revocation sent to The Project School paints an ugly picture of the school's finances. It claims the school has run a deficit in each of the last three years and now has nearly $5.3 million in debt. The notice also states that The Project School delayed paying its staff this month by one week because it had so little cash on hand.

The notice of revocation also cited a report by the Indiana State Board of Accounts, which found that The Project School had improperly used more than $63,500 in federal facilities and planning grant money to pay salaries and operational expenses...

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Fulton Science Academy High School*

“School board: Fulton Science Academy appeal must wait till May, June.” NorthFulton.Com (GA), 4/14/2013

FULTON COUNTY, Ga. – With May 23 the final day of school in Fulton County, it appears probable a decision on the future of the Fulton Science Academy High School will come just days before that date, putting in flux the academic plans for hundreds of high school students.

Last year, the Fulton School Board voted to terminate the charter with FSA HS on June 30, ending its relationship with the charter school after an eight-year partnership. Because there were two years remaining in the charter agreement, the action must be approved by the Georgia Board of Education (GBOE), following a recommendation from the Georgia Department of Education (GDOE), which is handling the appeal.

FSA HS appealed Fulton's decision to the state in January, but officials with the GDOE noted the process was not complete in time for the GBOE's April 4-5 meeting. The date of the May meeting has not yet been set and state officials are not promising completion of the process even then...

However, minutes of the board meeting show about a 7 percent decline in enrollment following the Fulton School Board's action in December, and an open house for prospective students in the spring was canceled because of the uncertainty of the appeal. FSA HS had an enrollment of 250 students at the start of the school year.

Last year, its sister school, Fulton Science Academy Middle School, lost its public school charter and converted to a private school. Morgan did not comment on whether plans have been made to follow the same route for the high school.

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“Financial, operational deficiencies cited in Fulton Science Academy closure.”NorthFulton.com (GA), 12/11/2012

ALPHARETTA, Ga. – The looming closure of the Fulton Science Academy High School has seen none of the drama created last year with the closing of its sister school, the FSA Middle School, as a public charter school.

Noticeably absent are the local politicians and community leaders who came out in force to try and stop the Fulton County School System from revoking last year the charter from the high performing middle school. One year later, few voices have come forward in support of keeping its sister high school open as a charter school.

Last week, the seven-member Fulton County Board of Education voted unanimously to begin termination proceedings against the charter high school at the end of June 2013. If successful, the high school will either close its doors completely in June, or convert to a private high school —the route taken by the FSA Middle School...

The recommendation to close the high school came after an extensive audit over the summer that examined the financial and operational processes of the school. The audit concluded significant deficiencies were apparent, and serious enough to warrant a closing of the school...

In recommending the closing of the FSA HS, Avossa pointed to a number of issues at the school, centered on governance board activities, low enrollment and its practice of charging students hundreds of dollars to take core classes, which should be offered at no cost.

Avossa noted FSA High School has never connected with the community or lived up to its goal of being the feeder school for the FSA Middle School. Its current enrollment of just over 250 students is well below the projected enrollment of 450...

"We've had numerous issues with the school since 2007 and have given them many opportunities to try and improve their operations," said Avossa. "The governance board has had a long history of ineffective leadership and poor decision-making, which has led to many of the current issues."

He pointed to the default on a $19 million bond, which was taken out last year to finance the construction of a campus to eventually house the FSA elementary school (Fulton Sunshine Academy), FSA Middle and FSA High. After Fulton County revoked the charter for the middle school, plans for construction stopped and the loan went into default in June. How the remaining $10 million will be paid back is still in legal limbo...

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* Gulen charter school

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Brooklyn Dreams Charter School

“Charter management firm charging huge rent markups to charter schools.”New York Post (NY), 4/30/2012

A for-profit education firm is soaking taxpayers by subleasing buildings to the Brooklyn public charter schools it runs at astronomical rates — including one at an incredible 1,000 percent markup, sources said.

While the city Department of Education leases buildings in Brooklyn for between $5 and $25 per square foot, the Michigan-based National Heritage Academies subleases to the charter schools it operates for roughly $38 to $45 per square foot, according to a review of public school leases by The Post.

For example, NHA is leasing a former school building on Parkville Avenue in Kensington from the Brooklyn Diocese for approximately $264,000 per year, according to a church source.

Yet the firm billed the site, the Brooklyn Dreams Charter School, $2.76 million for rent and related charges there last year — a 1,000 percent markup, financial filings show.

Critics say it’s part of the company’s MO: putting considerable money down to purchase or renovate properties, charging sky-high rents to recoup its investment — and eventually turning a hefty profit...

Most public charter schools get no funding for facilities, and mortgage lenders are wary of dealing with them because their charters are up for renewal every five years, supporters say.

“The bottom line is that if it wasn’t for NHA’s upfront investment in the real estate, the [Bushwick] school would probably not exist in private space,” [Cynthia Proctor, a spokeswoman for the State University of New York Charter Schools Institute] said...

The firm is one of the few for-profits in New York that manages all educational aspects of its charter schools, after being grandfathered in when state law abolished the practice in 2010.

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EdVantages Academics

“Charter schools pay off for CEO’s family.” Dayton Daily News (OH), 12/15/2012

A Dayton Daily News investigation found that a company managing several taxpayer-funded charter schools in the area is a lucrative family business whose husband-and-wife management team makes more than $400,000 a year.

The nonprofit, EdVantages, manages seven charter schools in Ohio, including schools in Trotwood, Middletown and Springfield. By law, these are public schools, but CEO Myrrha Pammer-Satow’s compensation is far higher than the pay of any local public schools superintendent with many more students.

Her salary is in addition to the income from another for-profit management company, Performance Academies LLC, that oversees other schools in Ohio and Michigan.

“That’s tough to defend,” said Terry Ryan, Ohio program director for the Dayton-based charter school think tank Thomas B. Fordham Institute, when presented with the newspaper’s findings...

In addition to Pammer-Stow and her husband, who is the Chief Operating Officer, the schools employ a number of family members, including the CEO’s sister, son, daughter and daughter-in-law. The daughter works as the nonprofit’s human resources director, responsible for all hiring and firing.

The structure of the management companies reduces the ability of the public to guard against nepotism in hiring practices...

Not all customers leave happy, though. The Parent Action Committee meets regularly at the Trotwood library to discuss ways to make the school better. Their complaints include the quality of materials and the administration not responding to their concerns of things such as bullying...

Because EdVantages is tax-exempt, it must report to the IRS how much it pays its top employees. Tax records obtained by the Daily News show CEO Pammer-Satow received a base pay of $168,466 in 2010, along with a $60,000 bonus and other compensation valued at $25,573. Her husband, COO Clinton Satow, received a base pay of $126,000, bonus of $45,000 and $14,000 in other compensation...

EdVantages is not unique, though. Richard Allen founder Jeanette Harris was compensated $226,685 in 2010, according to nonprofit tax filings, putting her pay above any local superintendent. Her daughter, Superintendent Michelle Thomas, was compensated $127,702.

Richard Allen Schools, with locations in Dayton and Hamilton, was called to task earlier this year by the state auditor’s office for problems including contracts involving companies owned by school board members and building rent paid to a church owned by the school president’s husband... [more info here]

The Ohio Ethics Commission estimates that it has about a dozen open investigations of allegations of nepotism at charter schools...

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EdChoices

“Oregon charter school founders accused in $20 million racketeering lawsuit.” The Oregonian, 1/4/2013

Tim King and Norm Donohoe, who ran a chain of taxpayer-funded charter schools across small-town Oregon from their headquarters in Clackamas, scammed the state out of $17 million and must repay that plus $2.7 million more, the state said in a court filing this week...

King and Donohoe, who were the director and president, respectively, of a nonprofit they named EdChoices, submitted false, incomplete and misleading records about how many students were enrolled in the schools and how they were spending the state's money, state prosecutors say in the complaint...

The pair opened and operated at least 10 charter schools that went by various and changing names, including Baker Web Academy, Estacada Early College and Sheridan AllPrep Academy. Most were launched under the name AllPrep. They existed under agreements with the school boards in Estacada, Sisters, Baker City, Sheridan, Burns and Marcola, but enrolled students from across the state in their online programs.

The state provided startup grants of up to $450,000 per charter school. The state Department of Educationalso paid about $6,000 a year for each student enrolled, relying on the charter school operators to document the number. The state now says those records were "erroneous, false and misleading."

Before starting AllPrep schools, King was a former teacher paid to create and run three North Clackamas School District charter schools: New Urban High, Clackamas Middle College and Clackamas Web Academy. Those schools are still operating, though King left in 2008.

The district discovered a trail of financial problems, including hundreds of thousands of dollars in questioned expenditures, only after his departure. The three schools agreed in 2009 to repay the district almost $400,000, a debt load that crimped their operations. But the state did not file a legal claim against King...

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See these entries for additional information

- Oregon charter schools (inadequate oversight)

- AllPrep Web Academy network

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Magnolia Science Academy charter schools

“Audit Report – Magnolia Science Academy-Charter Schools.” Los Angeles Unified School District, Office of the Inspector General, 8/20/2012

EXECUTIVE SUMMARY

This report contains the results of our audit of Magnolia Science Academy –Charter Schools (“MSA Schools”). The MSA Schools referred to in this audit were the Magnolia Science Academy-1, Magnolia Science Academy-2 and Magnolia Science Academy-3. The MSA Schools are part of twelve Magnolia Public Schools (MPS) operated by the Magnolia Educational and Research Foundation (MERF)...

Our audit found that the MSA Schools were not in full compliance with the selected provisions, standards and procedures outlined in their respective Charter Agreements. We also noted that the MSA Schools needed to strengthen their internal control systems and their oversight of fiscal and financial operations.
Some of the significant conditions we noted during the audit included:

• The governing board needed to review its existing governance structure to allow for the increased participation of parents, community members and other parties in the Charter Schools’ policy decision areas and other school advocacy.
• The MSA Schools did not maintain all employment documentation in the employee files as prescribed by the California Education Code and the Charter Agreement.
• The MSA Schools did not maintain all the enrollment documentation required by the written enrollment procedures and by the provisions of the Charter Agreement.
• Review of the financial statements and accounting records noted: non-disclosure of related party transactions; failure to maintain required fund reserves; failure to appropriately apply accrual basis of accounting; lack of monitoring of cash receipts and deposits process; lack of documentation for disbursements; lack of control over journal entries, and lack of adequate training for the accounting staff.
• The processes and controls over the bank reconciliation were inadequate. We found one Charter School that dated all reconciliations three days prior to this audit. We also noted that some deposits in transit remained outstanding in bank reconciliations from five months to almost a year.

Conclusion: Our audit noted control weaknesses in governance structure, employment documentation and qualifications of staff, admission/enrollment requirements and various financial control issues managed by the Magnolia Public Schools Central Office at the MSA School sites visited...

Potential Impact

The conditions described above, along with their underlying causes, may have increased the risk of fraud, waste and abuse of the MSA Charter Schools’ funds that could potentially result from the inability to detect irregularities, improper use of public funds or misappropriation of assets. Also, the questioned costs and questionable accounting practices identified in the course of the audit may have resulted in misstated and inaccurate financial statements of the MSA Charter Schools...

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NOTE: Although this internal audit report of these three Gulen charter schools was released in August 2012, the serious findings have not been presented to the public by the media, nor publicly discussed by the LAUSD school board as of 12/1/2012. It is also not known who ordered the audit, or why. If you live in LA, I urge you to pressure your local media to cover the story. More on the Magnolia chain HERE.

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