Theodore Roosevelt Public Community School

“Thousands in receipts questioned in school firing - Charter ousts its superintendent after audit finds discrepancies.” The Cincinnati Enquirer, 6/17/2012

The superintendent of two local charter schools has been fired from his $80,000-a-year job because of questionable receipts for thousands of dollars of purchases that surfaced during a routine audit.

The school board in May fired Roger Conners from the Theodore Roosevelt Public Community School in South Fairmount and its sister school, the College Hill Leadership Academy. The receipts only involved the Theodore Roosevelt school...

According to the records, school Treasurer Doug Mangen flagged $32,672 in receipts submitted by Superintendent/Principal Roger Conners as “fraudulent”

Several other receipts were flagged as “questionable,” and a few were flagged as “illegal.”

The school did not lose any money because Conners was never reimbursed for the receipts, some of which dated back to 2009. However, under his agreement with the school he would have been reimbursed for them at a later date when the board bought the school...

Records showed:

• $32,672 in receipts were flagged as “fraudulent.” Some totals had been logged twice or numbers had been changed or added to inflate the total amount. In one case, the total on a receipt for tile, paint and other items was changed from $265 to $1,265. Another receipt for pea gravel was changed from $290 was to $9,290, according to the documents.

• Dozens more receipts ranging from food to gas to construction supplies were flagged as “questionable.”

• $228 in receipts for beer and cigarette purchases were flagged as “illegal.”

Richland Academy put the school on probation April 30 after learning about the problems. As sponsor, Richland is responsible for fiscal oversight and making sure the school complies with the law...

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Burnham Wood Charter School District (three schools)

“Problems bring TEA monitor for Burnham Wood Charter School District.” El Paso Times (TX), 7/21/2012

The Texas Education Agency has assigned a monitor to the Burnham Wood Charter School District as a sanction for many problems the state previously found, including school leaders who misused public funds on some business deals and campuses not properly serving at-risk students.

The charter district's Superintendent Iris Burnham did not return phone calls this week, but in an email she said the district is contesting the education agency's decision to assign a monitor...

A state audit report released earlier this year showed that the district, which runs three charter schools in El Paso [see * below], misused public funds on some property transactions, which allegedly resulted in private benefits for Burnham, who is also the president of the district's board of directors.

The board breached its fiduciary duty when in September 2006 it approved using $1.2 million in revenue bonds to buy property on the West Side from Burnham for Howard Burnham Elementary, a charter school named for the superintendent's late husband, according to the state audit.

Education agency investigators concluded the purchase price far exceeded the property value...

Rebeca Perez, a former textbook administrator at the district who has claimed she was fired for raising concerns to school administrators and to the state education agency, said there should be harsher punishments against the charter district's leaders for misusing public funds.

TEA officials have not said whether the agency reported any of its findings to law enforcement authorities...

"Based on the audit, there's a lot of factual information that tells us there are violations of criminal activity," Perez said. "(Iris Burnham) basically is paying herself from the money entrusted to her. The citizens of El Paso should be concerned because this is taxpayer money."...

The more than two-year state investigation into the district held its accreditation status in limbo for three school years, but the education agency has since accredited the district...

The agency will reassess Burnham Wood's accreditation status if problems at the school are not resolved.

"I wish to express my concerns and caution the board regarding the lack of governance oversight that has resulted in these findings," Scott wrote. "I strongly urge the board to take swift and decisive action to address the many continuing deficiencies identified for the school."

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The three schools of the Burnham Wood Charter School District are the Howard Burnham Elementary School, the Da Vinci School for Science & the Arts, and Vista del Futuro. They are operated by the El Paso Education Initiative, Inc. and are also known as Burnham Wood Schools or the Burnham Wood Family of Fine Schools.

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Vitalistic Therapeutic Charter School

"Bethlehem school board accepts Vitalistic's voluntary charter surrender.” The Express Times (PA), 12/10/2012

The Bethlehem Area School Board tonight accepted the voluntary surrender of the charter of a city-based charter school that the board spent months trying to shut down.

Vitalistic Therapeutic Charter School of the Lehigh Valley spent months fighting charter revocation proceedings initiated by the Bethlehem Area and Allentown school districts. 

But then in October the charter school announced  "with profound sorrow" that it plans to shut its doors Jan. 25, which marks the end of the first marking period for the sending districts. A revocation hearing scheduled for Nov. 29 was canceled in light of the voluntary surrender of the charter...

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“Bills pile up as Vitalistic charter school's future looks murky; Bethlehem charter school hasn't offered mandatory speech therapy since February, owes creditors $87,531.” The Morning Call (PA), 3/31/2012

Already under two investigations, Vitalistic Therapeutic Charter School of the Lehigh Valley is facing mounting financial pressure that has led trustees to raise the specter of closing the school, which serves mostly poor children with learning, emotional and physical disabilities.

Records obtained by The Morning Call show money issues led the Bethlehem school to stop offering legally mandated speech therapy while nearly $9,500 in food vendor bills have gone unpaid and part of a federal education grant was used to pay a utility bill.

More pressing, the school can no longer afford to pay more than $17,000 in monthly rent and maintenance costs at its building on Fourth Avenue in Bethlehem and is looking for cheaper quarters in Allentown, records and interviews show. The Bethlehem building is for sale.

In a March 24 email on moving, board President Joyce Thompson wrote that she and another trustee "were talking about the possibility of having to close the school."...

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“Vitalistic charter school chief resigns,alleging continued financial mismanagement; She alleges continuing financial mismanagement at Vitalistic in Bethlehem.” The Morning Call (PA), 3/28/2012

The top administrator of a troubled Bethlehem charter school resigned Wednesday, alleging that school officials continue to mismanage tax dollars even as two local school districts investigate its finances and loss of a state license to provide students with mental health care.

In her resignation letter, Nancy Egan, chief executive officer of Vitalistic Therapeutic Charter School of the Lehigh Valley since 2010, said the board of trustees and other administrators have undermined her attempts to correct years of fiscal mismanagement...

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“State offers to help investigate Vitalistic charter school; Pennsylvania Department of Education offers Allentown and Bethlehem school officials help examining charter's financial and special education records.” The Morning Call (PA), 12/31/2011 

State officials have offered to help the Allentown and Bethlehem Area school districts with their joint investigation of Vitalistic Therapeutic Charter School of the Lehigh Valley.

Bethlehem Superintendent Joseph Roy said Friday his staff "received a very supportive call" from the Pennsylvania Department of Education concerning Vitalistic. He said the state has offered to help the districts analyze the charter's financial and special education records...

The districts' investigation stems from a story in The Morning Call on Nov. 27 that examined Vitalistic's finances and its loss of a state license that served as the cornerstone of its chartered mission to provide poor students with intensive mental health therapy.

Using public records and interviews with state and Vitalistic sources, the newspaper found Vitalistic had improperly lent taxpayer money to its nonprofit sister school, had problems documenting students' special education services, and had repeat violations of its licensed mental health program. Vitalistic billed the state for more than $200,000 in services from the preschool and charter school that auditors could not determine if children and their families had received...

The newspaper's investigation found Vitalistic's board of trustees offered little to no oversight of those funds or management decisions. The story showed Vitalistic had problems administering and documenting whether students received services under a welfare department license to provide outpatient partial hospitalization care, according to audits conducted by Magellan Behavioral Health Inc., a Connecticut-based private managed care company that monitors treatment for people on Medicaid with mental health issues...

The state auditor general's office is also investigating Vitalistic.

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The original story here: “WATCHDOG REPORT: A charter school's troubles emerge; Vitalistic Therapeutic billed state for 'services not rendered' records offer no proof of services to students.” The Morning Call (PA), 11/26/2011  

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REAL Prep Charter Academy

“How REAL Prep charter school spent $450,000 before problems weredetected.” The Oregonian (OR), 9/14/2011

The founder of a proposed Portland charter school was able to spend $450,000 in federal funds with little to show for it by choosing the least-regulated route to creating such a school and papering over problems when overseers checked in.

Erica Jayasuriya, a Portland mom with visions of opening a recording arts-based high school that would transform education for disengaged teens, presided as the team she assembled spent the money on planning, promotion and curriculum design -- without ever mustering enough curriculum, materials, students or equipment to open a school.

No one at Portland Public Schools, which approved Jayasuriya's proposal to open REAL Prep Charter Academy, or at the Oregon Department of Education, which awarded the nonprofit she created two $225,000 grants, took steps to stop her and her team until late August.

By then, 17 months after the money began flowing, the school was weeks from its scheduled opening and the money spent. Jayasuriya's pay took at least $68,000 of it.

State and school district officials say they understand why the public questions their failure to notice problems earlier. But they say failings were hidden from them, in part by misleading information from REAL Prep leaders and in part because Congress specified that charter school starters be allowed control over their grant spending.

"There was nothing that was said and nothing in what they submitted to us that brought our attention that they were not progressing toward opening a high quality charter school," said Susan Inman, the state's director of learning opportunity options.

Three days before school was to start Sept. 12, district officials shut REAL Prep, forcing students to scramble. More than 120 students filled out paperwork showing they wanted to attend, including 48 who officially enrolled.

Now, eight days into the district's school year, only half of the 120 students are in school. Thirty-seven are trying to get into a school that fits them and has room, while the status of 28 others is unsure because officials haven't been able to reach them...

Jayasuriya signed a detailed agreement, including to preserve financial records and get state approval if spending changed from the school budget. Unknown to state regulators, however, she was at odds with most of her own board over spending.

Eric Ensley, president of the board from its founding in May 2009 until he resigned in June 2010, said he tangled with Jayasuriya over her desire to immediately begin paying people -- including herself -- rather than first get a firm financial plan and seasoned administrator in place.

"There were manipulative tactics to try to get things approved and paid for that I didn't think should be paid for," he said. "I can't tell you how heated the debate got in the boardroom. ... To pay Joe Schmo to advocate for the school just because he knows this deejay is no way to run a school."

Ensley insisted, for example, that for Jayasuriya to become a paid employee of the school, she must step down from the board and apply for the job. In the end, Ensley and three other board members resigned, leaving Jayasuriya and two others on the board. Jayasuriya then helped hire herself and the board treasurer as paid contract employees of the school...

On Sept. 1, the problems became starkly clear. In a meeting at school district headquarters, four top school officials began arguing. The treasurer said she was ill-equipped and would resign that night. The co-director resigned during the meeting. A third leader walked out in disgust after learning there was no money left for furniture and equipment. And the list of seemingly qualified board members the district had been given was a fiction...

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Capital Preparatory Charter High School

“Trenton charter high school is under State Police investigation over financial problems.” The Times of Trenton (NJ), 5/10/2011

Capital Preparatory Charter High School has surrendered its charter and is under investigation for financial mismanagement and a range of violations by the New Jersey State Police, a state Department of Education spokesman said yesterday.

The Grand Street school had been placed on two consecutive 90-day probationary periods before it gave up its charter May 2. It will close at the end of the school year. Because Capital Prep chose to surrender its charter rather than have it revoked, it cannot appeal, DOE spokesman Alan Guenther said.

In addition to the financial problems, visits to the 329-student school by DOE staff “revealed a weak educational program, lacking in rigor and not meeting the goals set forth in the school’s charter,” Guenther said...

The DOE’s Office of Fiscal Accountability and Compliance (OFAC) had found problems including a $300,000 deficit, improper expenditure of funds, severe cash-flow problems, and violation of state travel policies, Guenther said.

The agency also found Capital Prep lacked a certified school business administrator and committed “gross mismanagement of public funds,” including bid violations, payments without adequate documentation, overpayment to consultants and employees being paid as vendors, Guenther said.

The investigation was spurred by an audit revealing the deficit, said Carly Bolger, director of the DOE’s Office of Charter Schools. Charter schools must have a balanced budget.

Bolger said the school violated travel policies last year and this year by spending $46,000 to stay at The Chelsea Hotel in Atlantic City for several meetings and retreats without obtaining a waiver from the DOE...

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Harmony Public Schools, AKA Harmony Science Academy schools / Cosmos Foundation (40 schools)

“Texas Legislature To Launch Investigation Of Charter Schools.” CBS Dallas / Fort Worth 29 Jun 2011 

The Texas Legislature ordered an investigation on Tuesday of the largest charter school network in the state after news organizations reported potential ties to a Muslim organization and misuse of public funds.

These concerns about Houston based-Harmony Public Schools helped lead to the initial defeat of Senate Bill 1, which had to pass before the budget could be balanced, because of provisions that provided guarantees for charter school bonds.

“We were uncomfortable voting for that bill unless we were sure that those funds were being properly spent,” said Rep. Phil King (R – Weatherford). The bill allowed charter schools to achieve AAA bond ratings, which decreases the cost of insurance rates and issuance costs.

King said a caucus after the bill’s defeat brought out these concerns, and he suggested an investigation into the charter school network as a stipulation of passing the funding. This guarantee led to the passage of the bill on the second vote.

The concerns stemmed from a New York Times article published earlier this month [see below] that drew a connection between Harmony and Fethullah Gulen, a Turkish preacher of moderate Islam who has built up a worldwide network of followers.

The article also insinuated the school gave preference to Turkish-run companies when choosing building contractors and food suppliers when cheaper options were available, as well as hired international teachers, specifically from Turkey, who might not have been qualified.

“These are serious allegations,” King said. “As public officials, it is our duty to look into them.”...

Jennifer Sarver of Burson-Marsteller, the public relations firm representing Harmony, said the New York Times article that prompted this investigation was inaccurate and “full of bias.”...

When CBSDFW.com contacted [NY Times reporter Stephanie] Saul, she rejected charge of bias and said the story was “100 percent accurate.”

“I think that the report stands on its own,” Saul said. “The story lays out a number of details about their construction arrangements and if the reader takes away from it that they feel it’s improper, then that’s how the reader interprets the story.”...

Sarver denied any connections with the Gulen organization, and said the only interest in hiring contractors to build schools was the speed at which it could get done...

While Duckett echoed Sarver’s feelings that the article and the investigation were unfair, King said the Legislature’s decision did not reflect feelings of bias within the House or Senate.

“This investigation is absolutely not any type of witch hunt,” he said, “it’s just an effort to make sure public dollars are being used appropriately.”...

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“Charter Schools Tied to Turkey Grow in Texas.” New York Times 6 June 2011

TDM Contracting was only a month old when it won its first job, an $8.2 million contract to build the Harmony School of Innovation, a publicly financed charter school that opened last fall in San Antonio.

It was one of six big charter school contracts TDM and another upstart company have shared since January 2009, a total of $50 million in construction business. Other companies scrambling for work in a poor economy wondered: How had they qualified for such big jobs so fast?

The secret lay in the meteoric rise and financial clout of the Cosmos Foundation, a charter school operator founded a decade ago by a group of professors and businessmen from Turkey. Operating under the name Harmony Schools, Cosmos has moved quickly to become the largest charter school operator in Texas, with 33 schools receiving more than $100 million a year in taxpayer funds.

While educating schoolchildren across Texas, the group has also nurtured a close-knit network of businesses and organizations run by Turkish immigrants. The businesses include not just big contractors like TDM but also a growing assemblage of smaller vendors selling school lunches, uniforms, after-school programs, Web design, teacher training and even special education assessments.

Some of the schools’ operators and founders, and many of their suppliers, are followers of Fethullah Gulen, a charismatic Turkish preacher of a moderate brand of Islam whose devotees have built a worldwide religious, social and nationalistic movement in his name. Gulen followers have been involved in starting similar schools around the country — there are about 120 in all, mostly in urban centers in 25 states, one of the largest collections of charter schools in America...

But an examination by The New York Times of the Harmony Schools in Texas casts light on a different area: the way they spend public money. And it raises questions about whether, ultimately, the schools are using taxpayer dollars to benefit the Gulen movement — by giving business to Gulen followers, or through financial arrangements with local foundations that promote Gulen teachings and Turkish culture...

Harmony’s history underscores the vast latitude that many charter school systems have been granted to spend public funds. While the degree of oversight varies widely from state to state, the rush to approve charter schools has meant that some barely monitor charter school operations.

In Washington, concern is growing. A number of charter schools across the country have been accused of a range of improprieties in recent years, from self-dealing on contracts to grade-changing schemes and inflating attendance records to increase financing...

TDM, builder of the new San Antonio school, is one of several companies that stand out — for the size of their contracts, their seemingly overnight success or both. One of TDM’s owners, records and interviews show, is Kemal Oksuz, president of the Turquoise Council for Americans and Eurasians, an umbrella group over several foundations established by Gulen followers. Since TDM was formed in November 2009, its work has involved only Harmony Schools and a job at the Turquoise Council headquarters, according to a company accountant...

Last year, local contractors questioned the fairness of bidding on two Harmony renovation jobs in the Austin area. On one job, in the suburb of Pflugerville, the low bidder, at $1.17 million, was a well-known Texas company, Harvey-Cleary. The job went to Atlas Texas Construction and Trading, even though its bid was several hundred thousand dollars higher. Atlas, with offices in Texas and Turkey, shows up on a list of Gulen-affiliated companies in a 2006 cable from the American Consul General in Istanbul, Deborah K. Jones, that was released by WikiLeaks...

Many of the furnishings are imported from Turkey — at a San Antonio school, the entryway features a turquoise arch, and the lobby ceiling is decorated with images of the sun and a star and crescent moon. Harmony advertises that its teachers “are recruited from around the world,” but most of its foreign teachers are Turkish men, and all but a handful of the 33 principals are men from Turkey. In addition to the standard foreign languages, the schools offer instruction in Turkish. They encourage students and teachers, even parents, to join subsidized trips to Turkey...

Around the country, the most persistent controversy involving the schools — and the one most covered in the news — centers on the hundreds of Turkish teachers and administrators working on special visas.

The schools say they bring in foreign teachers because of a shortage of Americans qualified to teach math and science. Of the 1,500 employees at the Texas Harmony schools this year, Dr. Tarim said, 292 were on the special “H-1B” visas, meant for highly skilled foreign workers who fill a need unmet by the American workforce.

But some teachers and their unions, as well as immigration experts, have questioned how earnestly the schools worked to recruit American workers. They say loopholes have made it easy to bring in workers with relatively ordinary skills who substitute for American workers.

“I think they have a preference for these H-1B workers,” said Dr. Ronil Hira, a professor at the Rochester Institute of Technology who has studied the visa program. “It may be a preference for a variety of reasons — lower wages or a network where they’ve got family or friends and connections and this is a stepping stone for them to get a green card.”

The American jobs, often offered to educators at Gulen schools around the world or graduates of Gulen universities, also provide a way for the movement to expand its ranks in this country, Dr. Yavuz said...

* Re Harmony's response to the article: http://perimeterprimate.blogspot.com/2011/06/new-york-times-vs-harmony-public.html

For more information about the Gulen movement and Cosmos Foundation's schools, read these entries posted by C.A.S.I.L.I.P.S.:

• Charter schools offer numerous business opportunities
• Does Harmony Science Academy have a connection to Fethullah Gulen? Two Turkish journalists weigh in. 
• Harmony Schools: Fact-Checking 
• Harmony Science Academy, Cosmos Foundation: Evidence of Affiliation with the Gulen Movement 
• How the Harmony schools serve the Gulen Movement
• Importing English teachers from Turkey
• ISWEEEP - Evidence of affiliation with the Gulen Movement (ISWEEEP is an annual "international" science fair in Houston Texas, sponsored and run by the Cosmos Foundation, and for students attending Gulen schools)
• Winning over Texas politicians

Added 1/10/2012: Harmony charter school network (TX)

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LEAP Academy University Charter School

“LEAP Academy paid $151,428 penalty to previous food-service vendor.” Philadelphia Inquirer (PA), 3/12/2013

When Camden's LEAP Academy University Charter School compelled its new food-service management company to retain the school's executive chef and give him a $24,000 raise, LEAP also had to pay a $151,428 penalty to its previous vendor, documents show.

Including Michele Pastorello's new $95,000 salary, LEAP has spent nearly $250,000 this school year to keep him employed as executive chef. The position typically pays about $40,000, according to industry experts.

Pastorello is the live-in boyfriend of LEAP founder and board chairwoman Gloria Bonilla-Santiago. His raise, as well as the fee paid to the previous management company, Aramark, now are under review by the school's board of trustees...

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“Camden LEAP Academy board investigating chef's $24,000 raise.” Philadelphia Inquirer (PA), 2/24//2013

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“Lawsuit is another blow to Camden's LEAP Academy.”Philadelphia Inquirer (PA), 2/2/2013

In addition to LEAP Academy University Charter School’s financial woes, the school has been hit was a lawsuit alleging misappropriation of school and scholarship money.

The lawsuit filed in January by LEAP employee Mark Paoli, who served as the school facilities manager for 12 years before being demoted in May, alleges LEAP founder and board chair Gloria Bonilla-Santiago “routinely demanded that he perform work on her home while on LEAP Academy time and using LEAP Academy, tools, equipment and supplies...”

Bonilla-Santiago denied all allegations in a statement...

Founded in 1997, LEAP is one of Camden's more prominent charter schools, with a large downtown campus. In August, LEAP will open a new 60-student high school that will focus on science, technology, engineering, and math, and a new K-3 school. LEAP Lower School (K-6) and LEAP Upper School (7-12) are one block apart on Cooper Street.

But the school has recently faced scrutiny from the state for mismanagement of federal money. And just last month, it was publicly reported that LEAP  (as well as Camden Pride Charter School) had lost its tax-exempt status from the IRS in 2010 for failure to file tax forms for three consecutive years...

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“LEAP Academy ends basketball episode.” The Star-Ledger (NJ), 6/14/2007 

LEAP Academy University Charter School has given up a costly battle over enrollment practices that netted out-of-state basketball players and ran afoul of state law. And the coach at the heart of the recruitment scandal will not return in September, according to a report in the Courier Post.

State Education Commissioner Lucille Davy had found LEAP violated laws that govern charter programs by giving admissions preference to out-of-state athletes over Camden students.

The charter school's trustees decided in May not to appeal Davy's ruling to the state Appellate Division. The Rutgers-based program spent nearly $55,000 on the legal fight.

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COMMISSIONER OF EDUCATION NEW JERSEY STATE DECISION, April 3, 2007

http://www.state.nj.us/education/legal/commissioner/2007/apr/120-07.pdf

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Mexican American Community Services Agency (two schools)

This nonprofit operated the El Portal Leadership Academy charter school in Gilroy and the Academia Calmecac charter school in San Jose, along with youth programs, elder care and low-cost housing program. County education officials revoked those schools' charters in 2009 amid allegations that MACSA had cheated 50 to 100 MACSA employees out of more than $1 million promised for their retirement by diverting money from teacher pension accounts.

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“San Jose: Former officials of nonprofit MACSA plead guilty, agree to repay diverted retirement funds.” San Jose Mercury News (CA), 2/15/2013

SAN JOSE -- In a case that outraged many in the community and cast a black eye on one of San Jose's oldest and largest Latino nonprofits, two former top officials of the Mexican American Community Services Agency will personally pay back -- with interest -- more than $110,000 they illegally diverted from employees who thought the money was going toward retirement funds.

As part of a deal reached with the Santa Clara County District Attorney's Office, former MACSA Chief Executive Olivia Soza Mendiola, 56, and ex-chief financial officer Benjamin Tan, 62, will give workers $170,000. They have three months to do so or face jail time, as part of their guilty pleas to grand theft charges on Friday...

According to the basis of the guilty plea filed with the court, "the diversion of employee funds was done with no intent to personally gain, with the knowledge of other persons and some board members at MACSA, and with the intent and expectation, based on proposals and plans to liquidate other MACSA assets, that MACSA would pay in full all deferred payments to the employees' retirement accounts."

While Friday's settlement takes care of the money that was not included in employee checks, the question of who is responsible for promised company matches remains undecided.

Chase said that amounts to $620,000 that should have been contributed, per union agreements...

MACSA is a nearly 50-year-old nonprofit that runs youth programs, elder care and low-cost housing programs. It also used to run two charter schools...

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“DA: Two ex- MACSA officials charged with illegally diverting $1 million in pension funds.” San Jose Mercury News (CA), 4/19/2012

Prosecutors on Thursday charged two former top officials at San Jose's Mexican American Community Services Agency with felony grand theft, accusing them of steering money promised for employee retirement into operating costs for food, sports, computers, office supplies -- even their own pay.

The charges against Olivia Soza-Mendiola, MACSA's past chief executive officer, and Benjamin Tan, the former chief financial officer, wrap up an investigation that began after employees three years ago complained the nonprofit had shortchanged their retirement accounts.

"This case is about hardworking people whose retirement money is gone," Santa Clara County District Attorney Jeff Rosen told reporters Thursday.

Prosecutors allege Soza-Mendiola, 53, and Tan, 61, cheated 50 to 100 MACSA employees out of more than $1 million promised for their retirement. Employees included teachers and other workers at the almost 50-year-old nonprofit that runs youth programs, elder care, low-cost housing and, until recently, two charter schools...

MACSA's pension-shorting scandal arose in late 2008. According to a February 2009 Gilroy Dispatch article, a teacher at its El Portal Leadership Academy charter school in Gilroy had tried to get his retirement money and found the funds weren't there, prompting school district inquiries.

At that time, Soza-Mendiola and Tan told the paper that MACSA used the retirement money to cover operating costs, not only at El Portal but also at their Academia Calmecac charter school in San Jose. They said the pension money was needed to avoid staff and program cuts but would be repaid.

But a 19-page affidavit by district attorney investigator Michael Sterner released Thursday said the scope of retirement fund diversion was more than twice the $400,000 that Tan suggested three years ago. It further alleged MACSA had the money to cover promised pension payments but spent it on seemingly secondary needs including $13,000 for office supplies, $7,000 for food, $7,000 for new computers, $1,200 for sports tournament fees and $1,000 for a YMCA membership.

What's more, the affidavit alleged Soza-Mendiola and Tan personally benefited from the diverted pension payments. Soza-Mendiola, Sterner said, stopped making her own pension contributions in late June 2007, then received 3-percent raises on July 1 of that year and the following year...

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“San Jose agency sues former leaders, alleging financial misappropriation.” Oakland Tribune (CA), 1/13/2011

San Jose's troubled Mexican American Community Services Agency has sued its former chief executive, financial officer, accountant and unnamed other staffers over alleged financial misappropriation that has been the subject of a yearlong criminal probe.

The case is set for a hearing Jan. 25, but recent MACSA court filings suggest a trial is a long way off because of the "complex accounting and factual issues" and unresolved criminal investigation into the alleged diversion of more than $1 million promised for employees' retirement toward operating expenses…

The nearly 50-year-old nonprofit on Sinclair Drive in East San Jose has provided youth programs to steer children away from gangs, adult day care for the elderly, affordable housing and, until recently, two charter schools in San Jose and Gilroy for 150 students.

County education officials revoked those schools' charters in 2009 amid allegations that MACSA had diverted money from teacher pension accounts. MACSA's board in March of that year reprimanded Mendiola and told her to fire Tan over the matter. She resigned her $124,000 position soon after. A state audit later that year called the diversion of retirement money an "apparent misappropriation of funds" that "appears to be an illegal fiscal practice."

Who made the decision to divert the money remains the subject of a criminal investigation into possible felony misappropriation of public funds and grand theft. An affidavit in support of an October search warrant said employee union agents told investigators that Mendiola acknowledged she and Tan had made the decision to "keep MACSA running" and that she "regretted the decision."…

The lawsuit seeks unspecified damages for its costs of dealing with the investigation, repaying employee retirement funds and federal payroll taxes, loss of reputation that has jeopardized fundraising and other losses.

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St. Louis charter schools (problems and poor performance)

JACO REPORT: ST. LOUIS CHARTER SCHOOLS; March 13, 2011; KTVI – TV (St. Louis, MO) 

On the Jaco Report, Charles asks, “Are charter schools a scam?” Supporters of Charter schools include city mayor Francis Slay to city school Superintendent Kelvin Adams. But figure [sic] show that most St. Louis area charter schools, elementary and high schools, perform worse on standardized tests than the regular public schools. Charles talks with UMSL Charter School Coordinator Dawn Finley…

Watch the video segment HERE. 

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Imani Institute Leadership School

SPECIAL AUDIT: SUPERINTENDENT OWES $341,000 TO CLEVELAND COMMUNITY SCHOOL; December 21, 2006; US Fed News Service

The Ohio State Auditor issued the following news release:

Auditor of State Betty Montgomery today released a special audit of the charter school Imani Institute Leadership School in Cleveland. The audit names Donna Johnson, superintendent of the school, in findings for recovery totaling $341,166.

"The Imani Institute is, unfortunately, a poster child for poorly run community schools," said Montgomery. "From lack of bookkeeping to improper purchases, this school was clearly not run in a way that places emphasis on educating our children."

Imani closed at the end of June 2005 due to lack of a sponsor. During the charter school's regular audit for the 2003 fiscal year, auditors identified several questionable debit card purchases such as restaurant charges and gasoline and clothing purchases. Further, school officials were unable to provide revenue and expense records. Montgomery's office declared the school "unauditable" for the 2003 fiscal year. Montgomery then opened a special audit to further investigate.

The special audit reviewed three procedures; review of revenues, review of expenditures and a review of the extended period of July 1, 2003 through October 31, 2005. The entire audit encompassed January 1, 2001 through October 31, 2005.

Throughout the special audit, Imani officials failed to provide receipt books or revenue and expense ledgers. Montgomery was forced to subpoena records from Imani's financial institutions in order to obtain information on Imani bank accounts. With considerable time and effort, auditors used the bank information to create a history of all of Imani's revenue and expenditures.

Ultimately, a total of $341,166 in findings for recovery was issued against Superintendent Donna Johnson including:

* $1,184 for money collected but unaccounted for.

* $187,506 for checks issued to cash and unaccounted for.

* $44,637 for cash unaccounted for.

* $17,559 for general expenditures unrelated to operations of a community school (home warranties, home installation of postage machines and computers, meals at restaurants, furniture, etc.).

* $7,856 for insufficient funds fees.

* $25,859 for exceeding Donna Johnson's authorized payroll. Montgomery's office has notified the IRS because Johnson's W-2 forms were understated.

* $6,724 for unauthorized reimbursements for expenditures unrelated to operations of a community school (gas, airfare, plants, and out of state hotel charges).

* $7,867 for ATM withdrawals (Parliamentarian Ernest Johnson also named in these findings for recovery).

* $32,843 for debit transactions (Parliamentarian Ernest Johnson also named in these findings for recovery).

* $4,840 for overpayment of loan transactions. (Marcus Wright of AHRMS Management Company also named in this finding for recovery).

* $4,291 for consultant payments (Consultant Rashid Alaji also named in this finding for recovery).

Montgomery also issued questioned costs in the amount of $482,159. Auditors could not locate voucher packages, checks, reports and other supporting documentation related to various federal grants received in fiscal years 2001, 2002 and 2003. Further, Imani could not account for the money spent from grant funds and therefore could not verify funds spent were for the purpose of the grants.

Imani Institute Leadership School's contract expired June 30, 2005. It was ineligible to reopen because it was unable to engage a new sponsor. The school opened in 2000.

In April of 2005, the San Diego City School District recommended the approval of a charter school to be opened by Donna Johnson in California. Her new school opened in September 2005 and closed in November 2005. In October 2006, Ms. Johnson surrendered the school's charter. For informational purposes, Auditor Montgomery sent a copy of her special audit to the California Department of Education and to the San Diego City School District.

As is routine with audits containing findings for recovery, a copy of the special audit will be sent to the local prosecutor and the Attorney General's office. A full copy of the special audit report is available online at: www.auditor.state.oh.us.

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Shortly thereafter, this charter school operator moved to California and opened up another charter school. No background check was conducted.

NO SURPRISE- HARBINGER OF CHARTER SCHOOL FAILURE IGNORED; January 6, 2007; San Diego Union-Tribune (CA) 

With one phone call to Ohio's state auditor – or simply a Google search – the San Diego Unified School District could have learned that Donna Johnson, seeking a charter for the Jola Community School in Mount Hope, had just left a long record of financial chaos in her operation of the Imani Institute Leadership School, her previous charter school in Cleveland.

So chaotic a record for so long, in fact, that Ohio's state auditor, already skeptical of Johnson, was conducting a special audit. So chaotic for so long that even minimal due diligence should have kept San Diego officials from dismissing questions about Johnson's performance in Cleveland as irrelevant to San Diego.

Ohio Auditor Betty Montgomery has now issued the special audit. It finds public money meant for Imani was spent for pricey women's apparel and Luther Vandross concert tickets. It finds that throughout Imani's operation Johnson ignored generally accepted accounting principles and Ohio financial reporting requirements. It finds that Johnson owes Ohio $341,156, and cannot account for $482,159 in federal grant money.

Now Johnson owes the San Diego district $162,516 in funding for Jola, which folded in fall 2005 after two months' operation for lack of students, facilities and money. It has yet to close its financial books to the district's satisfaction.

This should have come as no surprise, if it had to come at all. Our two-minute call to State Auditor Montgomery and a one-minute search of her Web site turned up an audit report posted in November 2003 noting that the financial statements Johnson provided for Imani “omit all disclosures required by generally accepted accounting principles” and listing eight “material weaknesses” in Imani's accounting.

Either the San Diego district's vetting process is wholly inadequate or the district staff is far too gullible. Whichever, it needs fixing, now.

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Richard Allen Schools (five schools)

AUDITORS PROBE A DAYTON CHARTER SCHOOL'S PAYMENTS; March 31, 2011; Dayton Daily News (OH),

COLUMBUS — State auditors have launched an investigation of a top-performing Dayton charter school chain after discovering $89,067 in misspent funds.

Four separate audits of Richard Allen Schools 2009 finances uncovered $9,739 in overpayments to school board members; $48,567 in state funds used to replace heating systems in buildings owned by the schools’ private management company; $27,300 unaccounted for from a Montgomery County Job and Family Services contract earmarked for summer and after school programs; and $3,461 for other reasons including improper spending on travel.

Issues of noncompliance to state law including charging students a fee to attend disciplinary Saturday school were also found. The findings, released Tuesday by state Auditor Dave Yost, also shows the schools had a combined deficit of $1.38 million in 2009.

Of the misspent money only $2,221 has been repaid…

Richard Allen operates four charter schools in Dayton and a fifth in Hamilton. A school representative said no one was available to comment about the audit…

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Chase Academy for Communication Arts

CHARTER SCHOOL TO CLOSE FRIDAY-STATE FUNDING CUT OFF TO CHASE ACADEMY; February 25, 2010; The Columbus Dispatch (OH) 

A South Side charter school will lock its doors for good Friday afternoon, leaving students to find new schools over the weekend.

Parents and teachers at Chase Academy for the Communication Arts were given a 24-hour notice when letters were sent home at the end of today's school day…

In what appeared to be an illegal meeting, the school board gathered today with staff behind closed doors. After the staff was dismissed, the meeting was opened to the public and the school's closure was approved in minutes.

The Ohio Department of Education will conduct an emergency enrollment review Friday at the school, 1565 Integrity Dr. E., and state auditors have stepped in to conduct a financial review.

"I didn't know anything about it. Now I don't know where my kid is going to go," said Laretha Haynes, who was picking up her daughter, a third-grader at Chase, this afternoon…

After the board meeting, Allen-Davis refused to explain what the school had done with the money it was paid by the state. Parents and former teachers painted a picture of a school in turmoil.

Jatica Miles had three children enrolled in the school, but moved them to a private school in the fall.

"One day we came in and there was no lunch for the kids because they hadn't paid the lunch people," she said. "They had to go down the street and buy Pop-Tarts and orange juice."

A teacher left in December when she said the school wouldn't pay to provide legally required services for special-needs students. Teachers and students were fleeing throughout the year, said Britt Thompson, who worked as the school-intervention specialist…

The past three state financial audits of Chase showed that the school was having difficulty tracking its spending. The school had misspent thousands in tax dollars and couldn't properly account for tens of thousands in grant money, state auditors found…

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CHARTER SCHOOL MIGHT CLOSE AFTER STATE HALTS FUNDING: CHASE ACADEMY'S ENROLLMENT CORRECTION IS COSTLY; February 24, 2010; Columbus Dispatch (OH)

No more state money is coming to a Columbus charter school, which means it likely will close.

Chase Academy for Communication Arts reported an enrollment of as many as 189 students this school year. But in January, the South Side school told the state that its monthly counts had been off and that only 108 students actually attend.

In response, the state this month stopped sending per-pupil money to Chase. No more will be sent this school year. The state has paid Chase $458,000 since the school year began.

"Those kids weren't enrolled (at any point) the entire year. They were being overpaid since the school year began," said Scott Blake, spokesman for the Ohio Department of Education…

J. Leonard Harding, executive director of the sponsoring organization, said he does not know whether parents have been notified. As of yesterday afternoon, Harding had not been able to reach the school-board president. He said ERCO wasn't aware of the enrollment error until recently.

"I'm trying to find out what's going on with this school," he said. "Now, we've got a mess here."

A state financial audit released last year showed that the school was having difficulty tracking its spending. Chase had overcharged needy students for school lunches and misspent thousands in tax dollars, and it couldn't properly account for tens of thousands in grant money, state auditors found.

Then in April, the school board fired school founder Celia Jones and said it suspected ethics violations. Board members have not detailed what those violations might have been…

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