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Missouri audit slams two charter school closings for financial waste, missing receipts

The Missouri auditor said Imagine Renaissance Academy overspent thousands by having its law firm handle duties, including a holiday party. The Urban Community Leadership Academy could not account for thousands of dollars worth of expenditures.
The Missouri auditor said Imagine Renaissance Academy overspent thousands by having its law firm handle duties, including a holiday party. The Urban Community Leadership Academy could not account for thousands of dollars worth of expenditures. MCT

Five months after it closed, Kansas City charter school Imagine Renaissance Academy spent $12,644 sending five people to a state conference to present on the rights and wrongs on how to close a public school.

The opinion of the state’s auditor, in an audit released Tuesday, concludes that the school committed thousands of dollars worth of wrongs.

Imagine Renaissance received a “poor” review for its 2012 closing, as did another Kansas City charter, the Urban Community Leadership Academy.

“It’s a sad end to a sad story,” Missouri Auditor Tom Schweich said. The audits began as routine procedures monitoring closing schools, “but unfortunately we found major problems.”

Imagine Renaissance, according to the audit, turned far too many duties over to its law firm, including setting up a $4,355 holiday party in December 2012. The law firm has repaid much of that money since the review began, the audit said.

In all, the charter school paid the firm more than $194,000 to conduct the closure “without soliciting proposals or determining if less expensive options were available.” Some disbursements, the audit said, “were unreasonable and unnecessary.”

The board was trying to put staff in place to handle the duties, said Dana Cutler, attorney at the James W. Tippin and Associates law firm, but two quit for personal reasons and the board struggled to replace them. The school board turned to its law firm as undone or incorrectly done work mounted.

The school is also caught up in a lawsuit against its former management company, Imagine Schools Inc., trying to recover what Cutler said was the company’s orchestrated pattern of overcharging rent and breaching payroll commitments to its member schools. The management company has denied those allegations.

The school did everything else well in its closing, Cutler said, including providing school fairs for families and job fairs for staff to help them relocate.

“There was no guidepost” on how to close a school, Cutler said. In most of its closing work, the school has shown itself to be “a teaching guide” for others that close — except for the costs.

“It is not our recommendation that you have your law firm do the closing work,” she said. “We agree (with the auditor) on that.”

Records and financial documentation were a problem for Urban Community Leadership Academy, or UCLA, the auditor found.

The middle school, which also shut its doors in June 2012, could not provide records for $117,980 of the $950,305 spent on its closure process, the audit said.

Among the state’s complaints, UCLA’s business manager signed 11 checks to herself totaling $8,438 and a board member made nine cash withdrawals to purchase cashier’s checks totaling $55,490 with no supporting documentation.

The auditors issued a subpoena to try to retrieve documents from UCLA.

“We rarely resort to subpoenas,” Schweich said, “and even then we still can’t find the documentation… All we can say is that we don’t know where it (the $117,980) went.”

A phone message left for UCLA’s school board president, Stacey Brown, was not returned Tuesday.

Charter schools and their sponsors need to be prepared to efficiently close a school that proves unsuccessful, said Doug Thaman, executive director of the Missouri Charter Public School Association.

“Those are public dollars and they need to be diverted to the education of the kids, wherever they may go,” he said.

Charter schools — public schools that operate independently from school districts with their own boards — are meant to foster innovative and successful models when they succeed, but close if they are failing.

State law in 2012 was revised to require that charter schools and their sponsors include a closing plan when they are applying for a new charter.

The Missouri Department of Elementary and Secondary Education also has been convening a charter school review committee to explore concerns such as closing issues.

Both of the closed schools suffered from poor academic achievement and faced losing their required sponsorship by state universities.

Imagine Renaissance was a K-12 program sponsored by the University of Missouri-Columbia, serving more than 1,100 students when it closed.

UCLA was a middle school sponsored by the University of Central Missouri, serving 230 children.

To reach Joe Robertson, call 816-234-4789 or send email to jrobertson@kcstar.com.

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