"While charter schools are given more autonomy in their operations, the lack of transparency and poor financial management has been a concern for about four years," said Fulton Schools Superintendent Robert Avossa. "[We] tried to give FSA time to remediate its practices so that families could have this charter alternative. However, the [FSA] governance resisted changes."
While financial concerns were not one of the reasons given by the Fulton County School System for not renewing the school's charter last year, it is evident it played a pivotal role in the subsequent denial by the state to become a state-chartered school.
Last week, an audit was released detailing a labyrinth of financial improprieties, including questionable payments to cover immigration fees of teachers and their families, conflicts of interest and self-dealing by members of the FSA management staff.
Avossa explained the audit was necessary to resolve the ownership issue of the assets of the school, much of it purchased with public dollars over the course of the past 10 years. FSA is closing as a publicly funded charter school at the end of this month, and will convert to a private school.
"To conclude the relationship with FSAMS, we conducted a complete review of its operations, including but not limited to, finances, charter compliance and performance objectives," said Avossa.
While FSA officials have challenged the accuracy of the audit, it had not released a response to any of the questions raised in the audit as of early this week.
Avossa said FSA was required to submit to an audit each year to the school system, as are all schools within the system. The requirement with charter schools, however, is they have the freedom to choose who performs the audit, and the focus is more on financial checks and balances as opposed to a deeper forensic audit.
However, it is evident a sharper focus needs to be placed upon all aspects of school operations that use public tax dollars, whether the schools are charter or traditional, said Avossa. As the Fulton School System makes the transition to a charter system, financial management will be one area that schools will not be able to waive regulations.
"The FSA audit reinforces the need for system-wide financial controls [which] already exist in our traditional public schools," said Avossa. "[Local schools] already have oversight as well as built-in checks and balances and this will not change under the charter system. Under the charter system, school governance councils will have some decision-making authority, but will not have the authority to independently contract or take on debt."
This freedom was at the root of the FSA troubles. The FSA Governing Board apparently selected vendors with close ties to the school and staff members, and took on a $19 million debt for a new school campus, on which they recently defaulted.
Avossa said the Fulton School System is contemplating improvements that can be made to the agreements with charter schools to gain more financial accountability. These changes could include:
Regular, in-depth financial audits of all charter schools
Increased oversight of governing board policies
Standards for transparency in operations and governance
In the past 10 years, FSA received more than $30 million from state and local coffers, and apparently raised millions more through donations and fundraising.
In the audit released last week, several key areas of concern were brought forward in the operations and financial management of FSA. These include:
Lack of appropriate safety procedures for students during international field trips
Concerns regarding the $19 million construction bond
Poor security practices related to background criminal checks for staff
Federal immigration issues related to staff
Inappropriate vendor relationships, self-dealing and conflicts of interest
Poor record and bookkeeping
The lack of cooperation by FSAMS with the audit