The D.C. Public Charter School Board voted unanimously Monday night to initiate the process to revoke the charter for Dorothy I. Height Community Academy Public Charter School for fiscal mismanagement, after the founder was charged with diverting millions of dollars to a private management company for his own financial benefit.
A Superior Court judge in October ordered the school to stop payments to a company set up by the schools’ founder Kent Amos, because he believes the District has a strong likelihood of demonstrating in trial that the school overpaid Amos by about $1 million last year alone, in violation of District law.
A. Scott Bolden, an attorney for the school, urged the board not to take the “drastic” step and to consider the nearly 1,600 enrolled and their families who will be affected. He told the board that the judge’s ruling was a preliminary injunction that is being appealed.
“The trial is going to continue: depositions, more witnesses, more documents,” he said. “A decision for preliminary injunction is just that, preliminary.”
Charter school board president John H. “Skip” McKoy disagreed: “There is now information in the public record. We need to look at that,” he said.
“If there’s been a pattern of fiscal mismanagement, we must revoke the charter,” he said.
Board officials said they are beginning revocation proceedings now, so parents have time to enter the city’s common school enrollment lottery. The lottery opened Monday for applications and runs through March 2.
Community Academy operates three schools, named Amos 1, Amos 2, and Amos 5, serving preschool through eighth grade, as well as an online program. One school is in Ward 4, two are in Ward 5.
Amos founded the first Community Academy school as a nonprofit in 1998. In 2002, he and two colleagues founded a for-profit management company, Community Action Partners and Charter School Management, and gained approval from the schools’ board of trustees eventually to transfer some executive positions and functions to that private entity.
Over time, Judge Neal E. Kravitz said, management fees rose while costs declined, with fewer people on staff and many of the duties being performed by school employees.
At the charter board meeting Monday, charter board deputy director Naomi Rubin DeVeaux detailed some of the duplicative services that records show the school paid for.
In 2012, for example, the management company was responsible for cleaning, she said, but the school also employed a facilities manager and 20 custodians. The management company was also supposed to be responsible for food services, but the school employed a food service manager and 10 food service workers. Similar duplication of services played out in other departments.
Last year, Community Academy had its 15-year charter renewed, under the condition that it close a second academically underperforming campus. Another school was closed for poor academic performance in 2012.
In 2013, the year the charter was renewed, charter board officials said they had concerns about the management agreement. But officials said they were not able to obtain financial records from the private management company, because school officials deemed them confidential.
It was not until after the lawsuit was filed, that the board understood the management company really only employed three people, DeVeaux said.
Federal tax returns made public through the trial showed that Amos received about $1.15 million in income in 2012 from the private management company. In 2013, he received $1.38 million, including $103,000 that was paid to his wife. His stepson also earned about $167,000 that year.
Officials said at the meeting that a financial audit from 2013 raised flags of the overall financial health of the school, which had negative cash flow and was running a deficit.
They noted that the overall financial picture of the organization had improved over the past year, but improvements were made by cutting expenses to programs — to the tune of nearly $2,000 per student, while barely touching the management fee which remained over $2 million last year.
Bolden disputed the claim that the school had only three employees.
And he said that the judge already designed a remedy for what he saw as the problem, by ordering the school to terminate its management contract without further harming the schools, which he said are performing well.
But McKoy said the board’s job is straightforward — to determine whether there has been a pattern of financial mismanagement.
“Does it really make sense to pay twice for maintenance? Does it really make sense on the surface to see fees go up and the number of employees go down at the same time the budget for the programs — for the school, for the kids — is going down?” he asked.
As part of the process, the school is entitled to request an informal public hearing and present its side to the charter school board.
The charter board also voted at Monday night’s meeting to reverse course on a revocation proceedings that it started in November for Potomac Prep, which serves 435 students in preschool through eighth grade in Northeast.
The school, during its 10-year review, was found to be falling short of 19 of its 20 goals, but new leaders at the school said they were turning the school around and requested more time to let the changes take effect.
In recent weeks, charter board members and staff visited the school, and were impressed that improvements were underway.
“Nobody, including the school’s leadership, disputes that the school’s performance in the past has been poor,” said Darren Woodruff, vice-chairman of the charter board.
“However after visiting the school and hearing from the school community, many of us were persuaded that a turnaround is underway at the school. This is much more than a plan on paper; it is about continuing actual changes in culture and instruction that we have observed at the school.”
The board drafted specific conditions for the school to meet over the next three years. If it does not meet these goals each year, the school agrees to relinquish its charter at the end of the following year.
“If the school is successful in meeting the ambitious conditions set as part of the charter continuance, it will be a great outcome for the students and families at Potomac Prep,” said Scott Pearson, executive director of the charter board.
He noted that on Tuesday, board members planned to visit IDEA public charter school in Northeast Washington, which faced closure in 2010, but has made significant improvements since.
“We hope we can have a similar celebration at Potomac Prep in the not too distant future.”