State suing former Kansas City charter school

The state of Missouri is suing a former Kansas City charter school, claiming it has refused to return about $3.7 million in overpaid funds to the Missouri Department of Elementary and Secondary Education.

Attorney General Chris Koster, the State Board of Education and DESE filed the lawsuit late last week against the closed Hope Academy. The school, among other things, is accused of submitting inaccurate attendance records to the state education department that resulted in overpayment to the school of $4.3 million in state education funds.

Before the school closed in 2014, the state recouped about $600,000. But Hope has failed to return the remaining $3.7 million it was overpaid. According to the state, the school still had money in its bank account as of July 2015.

Dana Tippin Cutler, an attorney for Hope Academy, said “the school has no money” other than funds to close its operation. When that is completed, she said, remaining funds, if any, will be turned over to the state.

The lawsuit accuses Hope Academy and its former employees of “failing to return state education funds, fraudulently misrepresenting attendance figures, and converting public funds.” The suit asks the court to order Hope to return the $3.7 million, which would then be distributed among public schools in the district.

“Hope Academy failed to live up to its promises in educating the children in its school. Now, Hope Academy continues to fail the children of the Kansas City Public School District by refusing to return funds earmarked for students in Kansas City,” Koster said in a statement Monday.

Missouri charters are public schools located in the Kansas City or St. Louis school districts but operated by independent boards. These schools are funded by state per-pupil dollars and usually sponsored by educational institutions, foundations or even private companies. Hope was sponsored by the University of Missouri-Kansas City.

The lawsuit follows a state audit report last month that gave Hope a poor rating. It confirmed the state’s claims that the school submitted false attendance numbers and collected per-pupil dollars that far exceeded what it should have.

The public charter school for high school dropouts had been reporting attendance rates at just shy of 98 percent. It closed after the state surprised the school with a visit in October 2013. Two months later UMKC informed the school it was withdrawing its sponsorship in June 2014 for reasons related to academic performance.

The audit did not find that any of the overpayment had been spent by employees for personal matters.

Cutler said the school’s board members have never disputed the overpayment. “The problem is that was something the school’s executive director did,” she said. “There has never been any allegation that board members are personally liable for this. They were a policy board.”

She said the board was given information regarding enrollment growth and attendance that was not true and that the board did not know attendance numbers were false. So when money came in from the state, it spent the money on the school. She said money was spent to purchase two buildings and refurbish two buildings.

The Hope board is expected to meet by phone on Wednesday.

This story was originally published January 25, 2016 at 12:49 PM with the headline "State suing former Kansas City charter school."