State Audit: NC Charter School Mismanaged Taxpayer Dollars

Jan 28, 2015

Credit Flickr user 401(K)2013

A failed charter school in Lenoir County mismanaged hundreds of thousands of dollars, according to the state auditor’s office.

Kinston Charter Academy received more than $600,000 of state money two months before it closed, even though it had received several citations for fiscal mismanagement over the years.

The audit says the funds were inappropriately used to cover expenses from the previous year, instead of going toward other public schools that students transferred to after Kinston closed.

According to the audit, Kinston Charter Academy received at least $300,000 more dollars than it should have from taxpayer funds.

The NC Department of Public Instruction asked the state to conduct the audit, arguing the department should be given more authority to take action with charter schools before they are overwhelmed with financial troubles.

According to the audit, Kinston Charter Academy overstated how many students were expected to enroll, allowing the school to receive at least $300,000 more dollars than it should have from taxpayer funds.

The audit also shows that the school employed unqualified relatives of the CEO, including his wife and daughter, who did not have any experience in education or administration. It further notes that the CEO and his wife received more than $11,000 in vacation leave even though teachers and staff often missed their salary payments.

"False and misleading"

The former school leaders argue the reports are false and misleading.

They said they followed rules related to student enrollment and that the school complied with the law regarding the hiring of employees.

They also contended that financial-related policies and actions from the Department of Public Instruction contributed to the school’s closure.

Charter schools are public schools that are funded with taxpayer dollars, but are run by private, non-profit boards. Since the state lifted the cap in 2011, charter schools have been steadily growing in North Carolina. There are currently 148, with at least 11 expected to open in the fall.

At least 35 charter schools in North Carolina have been shut down either through relinquishment, revocation or non-renewal. Most common reasons involve financial or compliance issues.