Charter school under the gun
A specially commissioned audit report on Prosser Creek Charter School – soon to be made public – is likely to have significant impacts on the school, as well as its already turbulent relationship with its sponsoring agency – the Tahoe Truckee Unified School District.
Although the contents of the report are confidential at this point, some believe it could determine the ultimate fate of the charter between the two parties, which is up for renewal this year.
For many, the report appears to be the culmination of years of contention between the two parties over issues like enrollment, parcel taxes, financial liability and the ambiguity of the State laws governing charter schools.
However, the TTUSD is not the agency that commissioned the $15,000, in-depth audit. It was the Placer County Department of Education – the agency responsible for oversight of both TTUSD and subsequently, Prosser Creek (PCCS).
“It all started more than six months ago, after a number of concerns regarding the charter came across my desk,” said Placer County Department of Education Superintendent Bud Nobili. “Those concerns were related to various fiscal practices, the amount of debt the school was accumulating, as well as various inaccuracies that could exist in revenue and expenditure projections. We were told that the error in accounting could amount to as much as $1.5 million.”
PCCS Executive Director Jayna Gaskell admits that the charter school did experience one accounting error last year.
“It was the result of a miscalculation in revenue projections in the budget that was passed in the spring of 2001 for the upcoming 2001-02 school year,” she said. “A voting representative of the TTUSD was present at the meeting and voted to pass the budget. The budget then went to the District office and school board and on to the county office of education after that.”
According to Gaskell, the PCCS Director of Business Affairs first discovered the error in February 2002.
“He found that he had included state aid in the budget twice,” she said.
State aid is one portion of ADA, average daily attendance, or the amount of money a school receives from the state per child per day of attendance.
“[The error] was immediately brought to the attention of the Placer County Department of Education,” she said. “It had not been found by any participating parties, in part because the charter school does not have access to the public school accounting packages. This, combined with the large growth the school experienced, made it difficult for all parties reviewing the budget to see the revenue error.”
According to Nobili, that error, combined with other concerns that had been brought to his attention by the TTUSD, led him to call in the Fiscal Crisis Management Assistance Team (FCMAT) to perform the audit.
FCMAT is an organization that assists California’s local educational system by providing fiscal advice, management assistance, training and other related school business services. The group operates from the office of the Kern County Superintendent of Schools under contract with the California Department of Education and the Governor’s Office.
“I did this because I have a responsibility to the district, the charter school, and all students,” Nobili added.
Concerns over enrollment numbers had already led Nobili’s Office to withhold about $300,00 of PCCS’s state funding earlier this year, a move that’s landed both parties in the courtroom.
“Some preliminary analysis of the school’s records showed that attendance may have been overestimated and as the school district was unable to certify the school’s attendance, I was unable to as well,” he said. “I was concerned that if this was the case, the charter may have to pay some of that money back to the state, which could further hurt the school financially.”
At this point, Gaskell said PCCS has asked that the court case be postponed until the FCMAT report is released and settled.
“I’m hoping that we’ll be able to work all of this out after the FCMAT report is released,” she said.
The report, which has been more than six months in the making, was originally scheduled for public release on Oct. 16, at a specially scheduled TTUSD board meeting.
However, that date has been pushed back indefinitely, after a request was made by PCCS and Nobili’s office for an additional meeting with FCMAT to comment on the draft report.
All parties involved have already viewed the draft report once and submitted comments.
“The report is likely to make a few recommendations, but its intent is to be more of an analysis of the situation,” Nobili said.
Once the report is public, Nobili said it’s not up to the county to take any action, but will be bounced back to the chartering agency – TTUSD.
“I have no intent to bankrupt the charter or see that the charter doesn’t get renewed this year,” Nobili added. “That’s not my job. My job is to verify and assess the financial condition of the school and the district, as I have a duty to both parties, as well as taxpayers in this area.”
Should the audit result in financial consequences for PCCS, Gaskell’s concerns lie in whether the charter will be afforded the same opportunities that public schools have in these situations according to state law.
“It is unclear at this time what the charter school will face if there are financial findings in the report,” Gaskell said. “The laws that govern public schools allow schools to appeal audit findings and make arrangements with the state to repay any monies owed back to the state for up to eight years. It is unclear if charter schools are afforded a similar due process.”
Gaskell said PCCS has already contracted with financial consultants to help implement a fiscal recovery plan and believes with the assistance of these experts and the potential to refinance existing loans, “the school is not only financially viable, but strong.”
“Audits can be good and you can often learn from them,” she added. “We’re just hoping for a fair report and not a witch hunt. I believe strongly that we’ve practiced under all guidelines the state has given to us and that we are a sound institution.”
Gaskell said she is also hopeful about PCCS being able to work out its differences with TTUSD.
“Communication has really broken down on both sides over the years,” she said. “A lot of problems have come from the fact that some of the laws are vague and open to multiple interpretations.”
As for what steps the district plans to take after the release of the report, TTUSD Superintendent Pat Gemma declined to comment.
“We need to wait to assess the situation until everything has been made public,” he said.
TTUSD Trustee Pat Gibbons-Johnson said the board wants to reassure parents it is committed to finding a solution.
“We’re trying to find a way to do what’s best for all students,” Gibbons-Johnson said. “We want to find a way for all parents and students to have a choice of school’s they feel comfortable with. We just need to find a better way to make things work.”
Gaskell also didn’t wish to comment on specific impacts the report could have on the charter between the district and PCCS.
“Either way, whether the charter is renewed or not, the district will be making a tremendous statement about support for options for our children in the community,” she said.
Gaskell also noted that this is not the first time a school or district has faced financial difficulties.
“I just hope that we are allowed the same fair processes and assistance that other schools are allowed so that our children are not impacted negatively,” she said. “We’re willing to take whatever steps are necessary to make sure that does not happen.”