Academy Of Dover: IRS Issues, Mold, Legal Fees, & Settlement Issues

Back in March, I found something incredible in regards to how the Internal Revenue Service revoked the 501c3 corporation status of Academy in Dover back in 2012 for failing to file their 990 tax forms for three consecutive years.  It appears they did get this status reinstated with the IRS, but it could also shed some light on their current financial issues.

AoD501c3IRS

I won’t pretend to know who a corporation, even a charter school, goes about getting their 501c3 status reinstated by the IRS.  But they did, on 2/15/2016.  The article I posted in March did not show that date at the bottom the above picture.  But I was contacted by the school who told me they were able to work things out with the IRS.  I was not given the nature of the resolution, but something else I found last night could show possible expenses at the school.

For each year Academy of Dover did not file their tax returns, there could have been continuing IRS penalties.

IRS Tax Penalties For 501c3 Not Filing Returns

The IRS defines gross receipts as:

Gross receipts are the total amounts the organization received from all sources during its annual accounting period, without subtracting any costs or expenses.

So if Academy of Dover received over $1 million during any of the years they didn’t file (which they did), they could still be on the hook for a lot of fines.  If the IRS revoked their status in 2012, based on not filing for three consecutive years, and they just filed their 2014 tax return this year (which would be the tax year they got an extension on last year to file by this February), that means they are looking at a minimum of five tax returns that were not filed on time, if at all.  The only one they have posted on their website is the 2014 one.  Guidestar.org, a popular website that shows tax returns for non-profits, only shows the 2014 return as well.  So say they didn’t file a return for five years.  That could be a maximum of $50,000 for each year, totaling $250,000.00.  That could certainly throw a monkey wrench into their budget, especially since they already paid $500,000 over the past fifteen months as part of their settlement to Mosaica.  Adding to this is another settlement in the amount of $30,000 that was due by the end of the year as per their May board minutes.  The minutes did show that half of that would be covered by their insurance.  But with potential IRS penalties up to $250,000 depending on the number of actual years they didn’t file, a $50,000 payment to Mosaica, and another $15,000 settlement, this school sure does rack up the expenses that may not have been necessary if someone didn’t drop the ball somewhere.  Keep in mind, aside from what insurance paid ($15,000), all of this comes from your pocket Delaware taxpayers.

I am merely speculating on this.  They could have reached a deal with the IRS.  As well, they may not face penalties for the years between the revocation of their corporate status with the IRS and when they were reinstated.  Either way though, it is frightening this was never brought up during their various formal reviews, charter renewals, and other DOE “oversight”.  But it is something the board should openly discuss at their next board meeting.  If the Delaware DOE doesn’t address this during their charter renewal process this fall I would be shocked.  Charter schools are required by Delaware law to post their 990 IRS tax returns on their website, something many of them are guilty of not doing.  Better to get it out in the open now.  I don’t see anything in their board minutes aside from the board approving their latest tax return, which is also part of Delaware law for charter schools.

There is one matter which was sent to me anonymously by someone who did not want to be identified.  Apparently, when it rains up to half of the school can flood.  Their sewer gets backed up.  When this happens, students are sent to one side of the building.  Further complicating these issues is a matter of potential mold at the school.  I haven’t seen this addressed in any of the board meetings.  But if there is mold present, that could be very serious for anyone in the building especially if there are spores released into the air.

I have no doubt much of this could be traced back to Noel Rodriguez for some of the years he led the school.  The man was not competent to lead the school, much less do the right thing when it came to the school’s finances.  But he has been gone from the school for almost two years now.  The school could have very well spent a lot of that time trying to reach an agreement with the IRS, on top of the Mosaica issue.  But now is the time for the board and the school to open up about these matters.  It could very well save them from getting their charter revoked!

 

Congressional Letter To FBI, FTC & IRS Raises Questions About Clinton Foundation, Will Hillary Be Able To Escape This? Deal Me Out!

On July 15th, several Republican members of Congress wrote a letter to the Directors of the Federal Bureau of Investigation, Federal Trade Commission and the Internal Revenue Service about questions of potential fraud with the Clinton Foundation.  Last night, Hillary Clinton accepted the Democrat nomination for President of the United States.  She gave a stirring speech with more about slamming Donald Trump than what she would actually do as President.  But underneath the surface of that speech lies unanswered questions about the Clinton Foundation and their illegal use of funding based on IRS regulations.

As Americans on the left and right continue to poke and jab at the opposite sides, it is more than obvious that neither candidate is worthy of becoming President.  Both candidates have been subject to numerous investigations that never seem to hold either of them accountable for their actions.  This is, by far, the worst selection of candidates the two major political parties in our country have ever picked.  This is a choice no American should have to face.  I am loathe to pick either of them in November.  The pressure both sides are putting on the other parties hasn’t even reached a fever pitch.  I think both candidate will not help public education.  One is more blatant and arrogant with their public persona while the other smiles but her actions behind the scenes speak in volumes about her pompous boasting.  I fear for the future of America with these two very greedy people at the helm.  They both claim they want to help the average American as they sit in the upper echelon of the 1%.  I cannot, and will not, support either Clinton or Trump.  I am ashamed to be an American facing these two choices.  I will not vote for either of them.  Their actions regarding persons with disabilities, through downright vocal discrimination or behind the scenes corporate actions in regards to the privatization of public education show they are not fit to lead our country’s future.  As I have been telling people, if you can’t do the right thing for children, how can you be expected to lead a country.  Children are the foundation and future of this country.

You can deal me out of voting for either candidate.  I pray America will come to its senses and do the right thing for our country.  No matter who wins, the controversy surrounding both of them will overshadow anything they do.  Both parties will become a lynch mob towards the other from 2017 to 2020.  This is not America.  This is not the country that Hillary Clinton talked about in her speech last night.  It is a very ugly political arena of the very worst America has to offer.  Hillary may have the political experience, but look at the many incidents she has escaped unscathed from.  Donald may have the corporate experience, but he has represented the 1% his entire life.

As a Delawarean, I see my own state divided into three parts: Hillary, Donald, and neither.  I fear Hillary the most because of rumors surrounding our own Governor, Jack Markell, vying for the US Secretary of Education spot under a second President Clinton.  I fear Donald because he is a racist maniac playing on the fear of Americans.  I fear Hillary because she caters to big corporations and has been paid handsomely for those efforts through the Clinton foundation or campaign contributions.  I fear Donald because he will land us into a bad war (if not nuclear) if he continues his rhetoric.  I support neither and there is no other viable choice that could get enough votes so neither of them become President.  What this country needs, right now, is a revolution.  We need to overturn both parties and do something.  I don’t know if that is even possible at this point, but if we want to save America, we really have no choice.  If the only thing we have to fear is fear itself, we need to rise above the fears of the supporters of both candidates and do the right thing for America and openly revolt against the two-party system that is killing our country.

Senator Sokola & Newark Charter School’s Smoking Gun With The IRS

All charter schools in Delaware except Newark Charter School file 990 tax forms to the Internal Revenue Service.  Charters are considered 501c3 corporations.  501c3 corporations are tax-exempt companies.  Most non-profits, like Rodel, fall under this category.  Unless they meet very certain criteria, they are required to file Form 990 with the IRS.  Could this be why Delaware Senator David Sokola, who lives in a district which also contains much of Newark Charter School’s five mile radius, is so opposed to House Bill 186?  It wouldn’t be the first time Senator Sokola has gone to bat for NCS.

In 1995, before any charter schools even opened in Delaware, the IRS issued new regulations concerning 501c3 corporations.   It allowed very specific exemptions from 501c3 organizations from filing their 990 form.  The IRS ruling was straight forward: if you were a governmental unit and a 501 company, you didn’t have to file.  There were very strict guidelines for what constitutes a “governmental unit”: Continue reading

Academy of Dover Is Not A 501c3 Corporation As Stated In Their Charter, DOE Needs To Revoke Their Charter Now

The Academy of Dover is not listed as a 501c3 corporation with the Internal Revenue Service.  The Academy of Dover’s charter, which firmly states they are a 501c3 non-profit corporation, is not real.  The Delaware Department of Education put the charter school under formal review last year.  This was their fourth formal review in 12 years.  This did not come up at all during that process.  As well, their auditor, Barbacane, Thornton, & Company LLP, wrote about this in the last three years of audits they did for the school.

AcademyofDoverIRSRevocation

For the past three years, their auditor made note of this in their yearly audit of the school.  Each year provides a link to the full audit:

2013

AoD13AuditPt1

AoD13AuditPt2

2014

AoD14Audit

2015

AoD15Audit

And yet, for all three years, it states the exact same thing.  Ironically, the link for their 2012 audit, which may have shed some light on this situation, comes up as a blank pdf file.

How has this never been publicly disclosed until now?  Actually, it was disclosed a few years ago but it was buried in a comment section on Kilroy’s Delaware.  It was during July of 2013, which as any blogger can tell you isn’t exactly a big audience at that time of the year.  Especially an education blog!  But a commenter wrote exactly what I am telling you now but no one picked up the baton and ran with it.

But this tells me this information has been out there for a while now.  I would have a very hard time believing nobody at the Delaware DOE knew this.  I’m sure they read the annual audits.  But the fact these audits say the exact same thing three years in a row is astonishing.  With the school involved in a $2 million dollar lawsuit as well as former Head of School Noel Rodriguez’ personal theft of school funds, how does this not come up at all?  Who is reading these audits at the DOE?

The oversight for Delaware DOE authorized charters falls on the DOE.  It was right in front of them the whole time and I have never seen it publicly questioned.  It never came up in their formal review meetings last spring.  I know this because I attended all the meetings.  Transparency and this school have never been the best of friends.  But this… the DOE needs to act.  Their 501c3 status was revoked over four years ago.  They have been operating in the dark for over four years.  Granted, they could be trying to work things out with the IRS.  But if they aren’t a 501c3, even though they are still listed as such with the Delaware Department of Corporations…

AoDcertofinc.

And if anyone is wondering why charters need more oversight, this is exactly why.  Avi at Newsworks wrote an excellent article today about more charters under investigation in Delaware, including ones that were already under past investigations.  I’m just going to come right out and say Senate Bill 171 would give us more of what we have: fraud, lies, and auditors copying and pasting the same information year after year.  House Bill 186 would allow information, like what I am writing now, the ability to be seen.  Who knows what other skeletons are buried out there in Delaware charters?

Title14Charter990

One last thought…charter schools are required by the State of Delaware, in Title 14, paragraph 509, that they must have their IRS Tax Form 990 on their website.  Academy of Dover has not had this on their website since at least 2008 since the IRS said they hadn’t posted a return the last three years in 2011.  So we have a law and nobody is making sure this even happens?  Hello Jack Markell… this is transparency calling… your DOE has a lot of explaining to do.  But let’s get Academy of Dover taken care of first.  They have been out of compliance with their approved charter for over four years.  It’s time the DOE and the non-elected State Board of Education make a real decision instead of “probation” four times…

 

House Bill 85: Better Hope You Paid Your School Taxes Or You May Not Get Your Full Tax Refund!

Delaware State Rep. Daniel Short introduced House Bill 85 yesterday.  This legislation would call for what’s known as a tax intercept if you did not pay your local school and property taxes.  This method of collection would have the funds come out of your tax refund check.  Currently, over $32 million is owed in tax arrears from citizens in Delaware over the last five years.

The legislation actually gives how much is owed to each school district in the state.