The Orlando Sentinel article below describes how the Maitland charter school in Oranqe County, FL might be shut down because they are almost broke after paying $520,000 to only four administrators. It appears there was a complete breakdown in fiscal oversight by the OC School District and the staff gave themselves raises and siphoned off the funds for the 325 student school.
In Florida, this is one of the risks of allowing charter schools to exist. The school district is required to allow formation of these schools, which take 95% of the funding per student that the District gets, and then the District doesn't have any authority to manage them.
There was a series of earlier Orlando Sentinel articles and exposes which can be seen at www.OrlandoSentinel.com/onlineextras .
The reporter didn't specify who did the audit that reported the problems, and we will attempt to get the audit report. Notice that the eight member board was clueless about the spending excesses and was not provided with any info on the unapproved spending.
Favorite Quote:
According to both the audit and Claire Olds, a co-founder and the chairwoman of Summit's board of directors, none of the spending -- including the salaries, the travel and other irregularities -- had been approved by the school's eight-member board.
vj
=====================================================
from
orlandosentinel.com/news/local/orl-summit0808apr08,0,5026727.story
OrlandoSentinel.com
Orlando-area Summit Charter School must fix problems or close
Audit finds lavish spending by administrators despite heavy debt
Erika Hobbs
Sentinel Staff Writer
April 8, 2008
A Maitland charter school paid four administrators more than $520,000 last year and, even though the school was deeply in debt, allowed lavish and uncontrolled spending by two of those administrators, according to an audit by the Orange County school district.
The six-page audit, completed last month, found that Summit Charter School had defaulted on credit-card payments and almost ran out of money to pay its teachers and other bills.
As a result, theOrange County School Board today is expected to give Summit's board of directors 60 days to get control over its administration and finances or shut down. The school serves 325 learning-disabled children on two campuses, one in Maitland and one in College Park.
According to both the audit and Claire Olds, a co-founder and the chairwoman of Summit's board of directors, none of the spending -- including the salaries, the travel and other irregularities -- had been approved by the school's eight-member board.
Olds said the board was committed to keep the 11-year-old Summit's doors open, even if it meant hiring new staff.
"I want what is best for the school," she said.
On March 4, the board suspended with pay three of the school's top officials, including Summit's president and co-founder Alan Smolowe. Also suspended were Steven Palmer, the principal; and Holly Wilkey, an office manager. Wilkey is Palmer's sister.
The audit showed that Palmer's salary was $217,654. Smolowe, who is also president of consulting firm Rothschild Development Corp., was paid $175,000. By comparison, according to school district attorney Frank Kruppenbacher, the averageOrange County principal earns $83,000 a year.
Salary more than doubled
Palmer's salary more than doubled since 2004, according to the audit, although it is not clear why. Palmer, identified by the school's Web site as an award-winning educator and former Holiday Inn food-and-beverage director, earned an average of $206,000 during the past three years.
The school also paid Wilkey $45,500 a year, while a bookkeeper, Yashmin Moledina, earned $122,000
In a memo accompanying the audit, Kruppenbacher wrote: "The school's administrators should be compensated fairly, but not at the risk of continuing solvency of the schools. Had the school controlled their salaries alone, they would have substantially improved their financial position."
Smolowe, Palmer and Wilkey did not return calls for comment.
The audit also showed that:
*Palmer ran up balances of $39,182 on several school credit cards. His finance fees and late charges totaled $5,229.
*Smolowe and Palmer bought two cars through the school -- without board approval -- and later traded them in for a $47,000 truck.
*The two men racked up "questionable expenditures" of more than $15,000 for meals, hotels, airlines and other travel expenses. Because there were no receipts, the auditors said, "we could not determine if any of the trips were for the benefit of the school."
All of this information, school district officials said, was difficult to ferret out because bookkeeping records were altered and Summit's tangled finances included eight accounts in four banks.
However, Evelyn Chandler, who oversees Orange's charter schools, said she was "confident" that the school's board would be able to work out a plan to keep Summit open.
"They [the board of directors] said, 'We understand we haven't been paying close attention, and we're going to do something about it,' " she said. "We're very pleased and confident that they are going to address the issues."
Summit's troubles are not unique among the state's 300 charter schools. A 2007 Orlando Sentinel investigation showed that many operate with little oversight and accountability. The stories showed, among other things, that about half of the state's charter schools had operating deficits or questionable business relationships with founders or board members.Florida authorized charter schools in 1996 as an alternative to public schools. Charter schools operate under a contract with local school districts and are funded with state money.
Orange has closed three other charter schools for financial and other problems: Origins Montessori Charter School in July, MESTA High in 2004 and Cyber High in 2002. The school district now has 19 charter schools.
Last fall, it wasn't clear that Summit could survive.
Chandler had begun to suspect financial irregularities because of budget reports her office received. When she ordered school officials to turn over records, they couldn't produce them. At about the same time, Summit's board of directors also noticed something amiss with the books.
"On paper, everything looked fine," Olds said. "Then, several months into the school year, we were suddenly in this financial crisis."
The board, which meets quarterly, had taken the administrators' word that "everything was fine," she said. And for years, they had experienced no financial problems.
Investigation ordered
But last fall, when the board feared it couldn't pay its 40 teachers and staff, Olds asked Chandler to investigate, telling her to "open every file, every drawer, every cabinet."
An independent auditor will begin work at the end of the week to confirm the findings, she said.
Olds, who helped found the school when her son needed an alternative school, called the incidents "disappointing."
"Without breaking into tears . . . it's very discouraging that this has happened," Olds said. "But we're going to get to the bottom of it and do everything in our power to make sure it doesn't happen again."
She added that her board will hold a public meeting in coming days to discuss the new plan to keep Summit open.
Erika Hobbs can be reached at [email protected] or 407-420-6226.
