Exclusive School Is at Risk Of Closing

Sources with knowledge of Rock Creek's operation, who asked not to be identified because of the confidential nature of board proceedings, say the school's problems stem from a combination of factors, including the spending of money in one year's budget that was intended for another. Hollinger also drew up budgets based on unrealistic enrollment targets, the sources said. For example, in spring 2004, he prepared a budget for the next school year based on receiving tuition from 260 students. At the time, some school officials questioned whether the figure was inflated, but Hollinger began spending based on the projected revenue. In early summer, it became clear that there would be only 210 students for the coming school year, the sources said.

Hollinger then agreed to accept nearly 30 students receiving federal money through the Washington Scholarship Fund, which implements a program, approved by Congress, to send D.C. students in poorly performing schools to private campuses. Rock Creek promised to pay for their expenses even though the voucher money did not come close to the cost of educating each student, sources said. Officials held meetings to figure out how to pay for the students' lunches.

Parents say they did not learn of the severity of Rock Creek's financial problems until a Jan. 4 meeting with trustees. It was then that they were told that the school had failed to receive a loan at the end of 2006 and could close within a month.

According to parents at the meeting, board members said they had only recently learned about the school's problems. Documents and e-mails obtained by The Washington Post, however, show that the board's finance committee had alerted the full board as early as 2005.

The National Association of Independent Schools says that trustees are responsible for "both the financial stability and the financial future" of an institution.

According to financial records, Rock Creek began running a deficit in 2004. The financial records show that it had a deficit of $600,000 in 2006 and that the cost of running the school each month was from $350,000 to $400,000. Since then, parents have collected money and pledges through fundraisers, grants and other sources to keep the school open into March. They expect to raise more.

The board unanimously voted in October 2005 to part ways with Hollinger over concerns about his professional and personal judgment as well as financial issues, according to sources with knowledge of the deliberations, school documents and e-mails among trustees.

Among the instances that caused concern was an incident in which Hollinger allegedly allowed marijuana use at his house during a school function attended by students, according to board minutes, e-mails and interviews with sources who asked not to be identified because of the nature of the incident. When asked about the allegation by The Post, Hollinger said he does not allow marijuana use in his home.

"The only explanation I can think of is that a person approached me once and asked for permission to use marijuana," he wrote in an e-mail. "I informed the person that marijuana was not permitted in my home."

Other issues included starting programs without sufficient resources and accepting voucher students without the money to pay the full costs, the sources said.

Some school officials, sources said, were concerned that Hollinger had raised $400,000 in the Middle East for the Arabic program but that most of the funds went into the school's general operations.

None of the current board members -- six of 13 have resigned since Hollinger's departure -- returned phone calls or e-mails. Of those who resigned, some acknowledged the school's difficulties but did not want to be identified because of the sensitivity of the issues. A few others did not return phone calls or e-mails.

Al Turkus, who said he is serving as an unpaid attorney for the board and who is the husband of board Chairman Caroline Turkus, said he could not go into details about Hollinger's behavior.

Hollinger faxed The Post a Nov. 12, 2005, letter from Kathleen Owen, the board's chairman at the time, to Rock Creek families that said his departure "was not due to concerns regarding the education, safety, or wellbeing of our children. Nor were there any irregularities in the use of school funds or disputes regarding the school's mission."

In a Sept. 27, 2005, letter to the board, Hollinger acknowledged opening the middle school and starting the Arabic program without adequate resources. He also expressed disappointment over not receiving a raise and asked the school to return $12,500 of a $15,000 gift he had made to Rock Creek.

If he had known he was being judged "solely on securing annual surpluses or improving the school's finances," the letter said, he would "not have agreed to purchase a building to open a Middle School or start an Arabic program without adequate funding to guarantee operating surpluses."