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”:

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.

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

2014

2015

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…

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?

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…

 

Providence Creek Academy Knew About Their Financial Abuse & Still Backed Sokola’s Non-Transparency Audit Bill

As revealed just half an hour ago, Providence Creek Academy was the latest in the never-ending “Delaware Charter School Financial Abuse Scandals”.  They knew this report was coming out.  You would think they would have shut up about charter school audit bills given this information.  But no, they went on their Facebook page and encouraged parents of students to fight State Rep. Kim Williams House Bill 186, which would help prevent these scandals from happening.

I heard Providence Creek Academy’s Head of School, Chuck Taylor, was in attendance at last week’s Senate Education Committee meeting, along with the Delaware Charter Schools Network, of which he serves as the President of their board. Unconfirmed, but on the rumor circuit is the PCA board voting to oust Chuck as soon as they get a new school leader because he is not qualified to run the school based on what they want in a school leader. The school has been without an official head of school since Chuck “resigned” back in 2013. The current principal, Audrey Erschen, has been around this whole time but the board at PCA seems to be very loyal to her, despite family members causing problems at the school in the Fall of 2014. The DOE and the State Board of Education, fully aware of some of these financial abuses and that the school was under investigation, renewed PCA’s charter last month. While the school told the Charter School Accountability Committee about how they have improved financial control through all of this, they were not exactly forthcoming about the nature of the abuses. I even congratulated them on their supposed transparency based on what I knew, which wasn’t even close to what was in this report.

Providence Creek Academy State Audit Inspection Released: Rehab Costs, Las Vegas Trip, & P-Card Abuses

The Delaware Auditor of Accounts just released an inspection report on Providence Creek Academy showing many violations in procurement card spending and very questionable payroll expenses.  The office was tipped off over a year ago, around the same time as Family Foundations Academy, about alleged financial improprieties at the school, as well as the Delaware Department of Education.  Abuses revolved around personal purchases through the State of Delaware p-card, payroll expenses that were not justified, and even a conference in Las Vegas in the Summer of 2014 that four employees of the school attended (as did representatives from Academy of Dover and Family Foundations Academy).  The school’s auditor from 2012 to 2014 found none of this in their annual audits of the school.

While the abuses were not in the scope of Academy of Dover or Family Foundations Academy, they are still illegal and against the law.  Please support State Rep. Kim Williams House Bill 186 to help prevent these abuses from being missed by the charter school auditors and to bring transparency to light before these investigative inspections even have to occur.  Senator David Sokola’s Senate Bill 171 does nothing to stop these events from happening.

The Sokola Williams House Bill 186 Charter Funding “Town Hall” Debate: What If We Are All Wrong?

Sometimes the best conversations happen when there is a freedom to it with no strings attached, just honest questions and answers.  Yesterday, Senator David Sokola responded to a post of Mike Matthews on Facebook about House Bill 186 and Senate Bill 171.  The two competing bills both deal with charter audits. What happened next on the “debate” was pleasantly surprising.  I actually admire Sokola for entering into what I’m sure he knew could be “hostile territory” so to speak.  What ensued was very interesting.

Here is the bottom line, as I wrote in one of the final replies on this: something needs to be done to make sure the charter school fraud just stops.  We can’t have school leaders going rogue and raiding the public coffers.  It’s just wrong.  I think House Bill 186 would prevent that quite a bit.  Will it prevent any school employee from ever absconding money for personal use?  No, I don’t think anyone could ever 100% stop that.  But it is one hell of a deterrent.  There are more than enough issues with school funding in Delaware, the last thing we need is for one cent to be wasted like this.  It is criminal, it is illegal, and it needs to end.

Given all that has occurred since Senate Bill 171 was introduced last week, I would actually love to hear Kendall Massett with the Delaware Charter Schools Network response to this thread.  So I invite Kendall to comment on here.  This is not a free-for-all to jump on her should she take up the invite.  It is just a debate about the issues at hand.  If Kendall does take me up on this, I believe it could shed light on what the charters may be looking at for this.

In my opinion, the way charters were set up in Delaware is miles away from the present reality.  It is much more visible in New Castle County, but the whole traditional school district/charter school debate has morphed into something with both sides pitted against each other.  I will fully admit it’s something I’ve been guilty of.  But is it good for the education landscape of Delaware?  Should charters be funded separately from regular school districts?  But even bigger than that is the competition.  This need to be the best school in the state and all that comes with that.  Since the catalyst for that is standardized test scores, what would happen if those scores all of a sudden didn’t hold the weight they currently have?  What if schools were judged on their own merits, good or bad, based on something not so exact?

Our Department of Education, in line with the US DOE, certainly set up this kind of environment.  But let’s get real for a moment.  The traditional districts and the charters aren’t going anywhere.  I know I’ll probably get shot for even bringing this up, but a lot of us look at education in Delaware under the lens of how the charters affect the schools around them.  But I’m going to attempt to look at this from the charter perspective.  They view themselves as not getting as much money as districts, thus their assumption they do “more with less”.  In defense of that, they don’t have the sheer size and multiple capital costs the way districts do, so there is that.  Most of their teachers are not unionized, so turnover is most likely greater.  So they need to retain their good teachers and find ways to keep them and attract them to their schools.  They also need to make sure their enrollment stays at certain levels or the DOE will come after them.  To do that, they need to make their schools look as attractive as possible, so they need to sell it as such.  While some schools do indeed have enrollment preferences that are very questionable, a lot of them do not.  But still, the lure of charters for many parents is the escape from the local school districts who do “less with more”.  Most parents who are engaged at that level, and have made a choice to keep their kids out of a district, will certainly be more active in their child’s education, which results in more of a collaborative relationship between charter parents and their schools.  But the flip side to all of this, as those students who most likely have more parental engagement with their child’s education (not all) and  pull their kids out of districts, it has a rebound effect on the traditionals.  It can draw out the “better” students resulting in more issues at the local level for the remaining students.  This is certainly not the case in every school in every district, but we have seen this happen in Wilmington most of all.

So how do we get around all of this and work to make both co-exist?  The conversation gets very heated very quick with parties pointing fingers and making declaratory statements that don’t serve to solve the issues but actually polarize both sides into their position of defense.  As a result, we see legislators with differing opinions proposing laws that the other side opposes.  In the case of the charter audit bills, Kim Williams wins that one, hands down.  Will it cost charters more money?  Like I’ve said before, probably.  But we should have never reached this point.  It should have always been equitable for both when it comes to audits.  It isn’t now, and it wouldn’t be with Senator Sokola’s bill.  I’m not saying this cause I like Kim better than Dave, I’m saying it cause it makes sense.  There are some Republican bills I think make a lot of sense, and vice versa.  But let’s face it, the Democrats have controlled Delaware for a long time now, so their bills tend to get more press and traction because of that control.

This is what I would like to eventually see in the charter/traditional debate.  All schools, be it charters, magnets, or vo-techs, have no enrollment preferences whatsoever.  This would put everyone on the same level playing field.  As well, charter schools should be funded the same way vo-techs are.  But there could still be a problem of a district shedding students as we see in Christina.  How do we solve that issue?  Not an easy answer.  When districts do lose a lot of students, it is bound to cause financial concerns.  But obviously we can’t just close districts.  But we can’t let them go to the poorhouse either.  And when a referendum goes south, it doesn’t just affect the traditional school districts, it flows into charters that receive the funding for those students.

Finally, our legislators need to find a way to minimize the importance of standardized testing.  At a state level, not a district level where those assessments do actually help students.  I posted an article on American Institutes for Research last September where their CEO admits standardized testing is actually accountability tests against teachers and schools.  Because our states and federal government have allowed this to happen.  They set up this crazy chess match but is very bad for schools, students, teachers, administrators, and even communities.  Whenever there are high-stakes, there are also consequences.  While some are intended, others are not.  Setting our schools up to compete against each other can bring innovation, but then it becomes a matter of “who has the better test scores?”  It’s not good, it’s not healthy, and this is leading all our students into the assumption that if they do well on a once-a -year test they are actually a success and “college and career ready”.   But even more dangerous, the schools actually think this and instruction is aimed around the test as opposed to the individual student and their own individual success.  The question that always comes up after this argument from the proponents of standardized testing is “How do we measure our student’s progress?”  There are measurements that don’t have to be the focal point of everything.  But yet our DOE has the Smarter Balanced Assessment with most of the weight on the Delaware School Success Framework.

Until we can get out of this testing obsession, nothing will ever change.  If charters and traditional school districts want to survive, they should join together to eliminate this abusive practice, not to perpetuate it.  There is no stability in it, and it is very destructive.  To those who do profit off this, they truly don’t care.  As long as they are making money.  This should be something parents of students should want as well.  They may not see it now, but they certainly will after their child graduates and they find they are really struggling in college.  This is why we are seeing more students taking college-level courses in our high schools because even the corporate education reformers know this.  But what we should really be doing is focusing less on test scores and letting children progress naturally in schools without the test stress.  So by the time they go to college, they are ready for what comes next.  College is supposed to be hard.  It shouldn’t be easy.  If we are seeing so many kids taking remedial classes, maybe this isn’t a reflection on our schools but on the emphasis society places on test scores.

For me personally, I care deeply about these issues.  Because I believe the students that pay the price the most are those who need the most.  By leading all students toward these very specific goals of “proficiency” and “growth”, we are allowing students with disabilities and those who come from poverty to start at the gate with a disadvantage.  And wanting to “close the gaps” without changing their inherent disadvantages results in an explosion just waiting to happen.  I’m not saying these kids can’t learn, or that they don’t want to learn.  But the instruction they need may not be the same for their regular peers.  If the end goal of accommodations is to make a student do better on a test, then we are losing sight of the true picture.  We can’t erase a disability or poverty in schools.  There are far too many outside factors to make that ever happen.

The charter/district debate is a systemic issue, but it is symptomatic of the far greater disease: standardized testing.  We have many excellent teachers who can become even better by allowing them to flourish in an environment that isn’t poisoned and set up as a competition.  Education isn’t a race.  It isn’t a contest.  It is education.  No child learns the same, and no child tests the same.  It needs to stop.  Until our leaders learn this, parents will continue to opt out.  At greater numbers than each year before.  Because we see it and we have the power to act on it.  Sooner or later they will get the message.  But in the meantime, the reformers and leaders continue to spin their wheels looking for the next big thing in order for them to survive.  They do not care if a school is doing bad.  They love it and they will pounce on it.  They use our schools and students so they can get rich.  And their method of measurement: the standardized test.  And far too many lap it up and believe it.

 

 

Dave Sokola Kicks Kim Williams In The Back And Then Thrusts The Knife Into It

Senator Dave Sokola pulled a fast one on State Rep. Kim Williams in his latest political trickery because of his uncontrolled bias for Delaware charter schools.

Last year, State Rep. Kim Williams’ House Bill 186 was approved by the Delaware House of Representatives on June 30th, the last day of legislative session. Senator David Sokola refused to suspend the rules and said this bill needed to be heard in the Senate Education Committee. Fair enough. It was heard in committee this week, and it was released yesterday. Fair enough. What he did behind the scenes is what defines him.

House Bill 186 deals with charter school audits. Rep. Williams felt the charter school fraud and embezzlement was a bit too much for Delaware taxpayers and she brought the bill forward to allow the State Auditor’s office to monitor charters more closely. This is something Kathleen Davies from State Auditor Tom Wagner’s office was in full support of. The main party who was not in support of the bill was the Delaware Charter Schools Network. They vehemently opposed the bill stating it would cost charter schools extra money. On their website, they set up a “letter to the legislators” system where parents just add their information and a letter is automatically sent to the legislators.

At present, all traditional school districts audits go through the State Auditor’s office.  Charters use their own hand-picked auditors.  This bill would add an extra layer of protection.  As well, ever since the very first charter school closed in Delaware, funds seem to disappear resulting in millions of dollars vanishing.  Rep. Kim Williams’ House Bill 186 would put charters on the same equal playing field as traditional school districts and is not an attempt to treat charters any different.  Why would we not want to ensure our taxpaying funds are being used with fidelity and honesty?

Having sent my son to a charter school back in the day, I know how this works when legislation comes up that may affect a charter school.  Parents get emails from the school leader basically saying “Our poor charter school is under attack, we need your support.”  It usually ties to funding and money.

On June 30th, the bill passed the House with all Democrats except State Reps. Pete Schwartzkopf and Earl Jaques and all the Republicans voted no.

This week, Sokola, along with co-sponsor Jaques and several Senate Republicans filed Senate Bill 171.

Are charters required to have their audits done the same way as Sokola’s Senate Bill 171 states?  Not at all.  Title 29 of the Delaware State Code, dealing with the Auditor of Accounts, specifically states:

(f) The Auditor of Accounts shall conduct postaudits of local school district tax funds budget and expenditures annually. The results of the audit shall be submitted to the local board, the State Board of Education, the office of Controller General and the local libraries within said school district. Expenses incurred for such postaudits herein authorized shall be borne by the local school districts.

This says absolutely nothing about charter schools whatsoever.  With respect to charter schools, Title 14 does touch on this, but the wording is very vague:

The charter school shall contract to have an audit of the business and financial transactions, records, and accounts after July 1 for the prior fiscal year. The results of the audit shall be shared with the Department of Education by October 1.

What Sokola’s bill does completely ignores the authority given to the State Auditor of Accounts in Title 29.  And the charter audit part is not even included in chapter 29 whatsoever.  Title 14 doesn’t even define what the scope of the charter school’s audit should look like, and even with Sokola’s bill this is not defined either.  But Title 29, the section that once again authorizes the Auditor of Accounts of their duties and responsibilities, bolded for emphasis, states:

(a) The audits shall be sufficiently comprehensive to provide, but not limited to, assurance that reasonable efforts have been made to collect all moneys due the State, that all moneys collected or received by any employee or official have been deposited to the credit of the State and that all expenditures have been legal and proper and made only for the purposes contemplated in the funding acts or other pertinent regulations.

This is a direct attempt to sabotage Rep. Williams’ bill in my opinion. Sokola’s bill does absolutely nothing. It is a piece of paper designed to actually protect charter schools from the financial destruction some of them have inflicted on Delaware. After the State Auditor’s office released reports last year on Family Foundations Academy and Academy of Dover showing well over $300,000 of taxpayer money being absconded by school leaders, along with other reports showing a couple of charters doing very suspect things with school funds, one would think our elected officials would want to make sure charters are held under a bigger microscope.  In the case of Family Foundations Academy, telling the public they aren’t sure what may have happened to $2.5 million dollars along with another $141,000 in funds that may or may not have been personal purchases shows a clear need for more oversight into charter finances.  But apparently not with the Chairs of our Education Committees, Sokola and Jaques.

How does something like this happen when charter schools are supposed to have greater accountability because of their unique structure with the public school environment?  It is political maneuvering.  Senator Sokola is in the 8th District, in Newark.  Since 1990, Sokola has been a State Senator.  I wrote in great detail about Sokola’s history of education destruction last year.  The 8th District is a very unique district.  In this district is Newark Charter School.  Senator Sokola was one of the founding board members of the school.  Newark Charter School has a 5 mile radius for its applicants, which actually extends past the Maryland line.  So it is not a true 5 mile radius, but ensures all its students come from a very specific geographic area.  The 8th district.  This school is considered to be one of the best schools in the state based on standardized test scores, academics, and school climate.  There is usually an extensive waiting list.  Because of this, Sokola is able to hold onto his Senate seat because of his steadfast loyalty to charter schools.  He is also the chair of the Senate Education Committee.

Interestingly enough, State Rep. Kim Williams gave insight into this in a comment on Delaware Liberal last night:

House Bill 186 will require charter schools to have their audits done through the Auditor of Accounts like all other public school districts in the state. Currently, only public school districts are audited through the Auditor of Accounts. Sen. Sokola explained to us during the debate of House Bill 186 that his bill, Senate Bill 171, was drafted with the help of the Delaware Charter Schools Network, who represent charter schools and the leaders who have been stealing from Delaware taxpayers. Senate Bill 171 does not require the charter schools to have their audits done through the Auditor of Accounts office. The charter schools will be able to select who they want once again. Senate Bill 171 does nothing except protect the charter schools and not the taxpayers. I for the life of me cannot understand why these people do not care about protecting the taxpayers’ money; they are more interested in protecting the charter schools.

This is Delaware.  Those in power position themselves in the key positions so they can be re-elected over and over and over again.  Sokola is also the chair of the Senate Bond Committee so he can curry favor with the organizations that receive state funding through bonds and grants.  Sokola has not filed for the 2016 election, but his seat is up for grabs.  No opposing candidate has filed either, so there is still time.

I urge every single Delaware citizen to contact every member of the Delaware Senate to vote yes for House Bill 186.  Sokola’s anti-Williams bill will most likely be on the Senate Education Committee agenda for next week.  His bill will be fast-tracked for passage while Williams bill will either be voted down or sit in limbo.

I just wrote the Delaware Senators an email for my full support for House Bill 186, and I would ask anyone reading this to do the same:

Good morning Delaware Senators!

I wanted to ask for you support in voting yes for House Bill 186, State Rep. Kim Williams charter school audit bill which passed with overwhelming support in the Delaware House on June 30th, and was released from the Senate Education Committee yesterday.  As a Delaware taxpaying citizen, I firmly believe our Delaware charter schools need rigorous examination with their finances.  We have seen far too many charters abscond with public funds for personal use in the past few years for their own personal use. 

I firmly believe, after carefully reviewing House Bill 186, that this bill would give the extra protections Delaware taxpayers need to make sure our dollars are being protected from those who would steal money from us.  If we are going to demand accountability in our schools, that needs to start at the top in each and every building.  Every single traditional school district is held to this same process, so why wouldn’t we include charters in this process?

I would urge all of you to read this article by Business Insider which was written on January 6th, 2016: http://www.businessinsider.com/are-charter-schools-the-new-mortgage-crisis-2016-1  This article clearly shows the environment charter schools exist in and there are red flags all over the place.  Charter school accountability and transparency was also addressed in the Every Student Succeeds Act, signed by President Obama last month.  The ESSA demands more state responsibility in monitoring charter schools.

Thank you,

Kevin Ohlandt

Here is a list of the emails for our Delaware Senators, just copy and paste!

harris.mcdowell@state.de.us MargaretRose.Henry@state.de.us robert.marshall@state.de.us greg.lavelle@state.de.us catherine.cloutier@state.de.us Ernesto.Lopez@state.de.us Patricia.Blevins@state.de.us karen.peterson@state.de.us bethany.hall-long@state.de.us Nicole.Poore@state.de.us david.mcbride@state.de.us bruce.ennis@state.de.us Dave.Lawson@state.de.us senator-colin@prodigy.net brian.bushweller@state.de.us Brian.Pettyjohn@state.de.us gerald.hocker@state.de.us bryant.richardson@state.de.us David.Sokola@state.de.us Bryan.Townsend@state.de.us gsimpson@udel.edu