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Charter School Taken Over by the State
The Texas Academy of Excellence, one of the state's first charter schools, is mired in financial problems so severe that the state's top education official has appointed a management team to run the school.
Education Commissioner Shirley Neeley appointed the two-member team, which started work Thursday, to take over the school's financial, governance and administrative operations. Neeley cited a number of problems with the school in a letter dated Feb. 16.
School Superintendent Dolores Hillyer declined to comment Thursday about any of the problems listed in Neeley's letter, saying it would be inappropriate to comment until the team has finished its review.
"Once their review has been completed, I would be willing to discuss any and all aspects of it," she said.
The management team met Thursday with Hillyer and the school's staff, while other Texas Education Agency employees gathered documents for the review.
Last week, Hillyer downplayed the East Austin school's problems after news reports that teachers had not been paid for January. The school's former landlord, Mike Gharbi, requested a freeze on the charter school's operating account in an effort to collect unpaid rent. At the time, Hillyer said teachers had exaggerated the severity of the school's financial situation.
In addition to the frozen bank account, Neeley's letter listed these problems:
* On Jan. 6, the Internal Revenue Service notified the TEA that the school owed $137,587.73 in back taxes and that any funds the state agency was scheduled to send to the charter school instead should be sent to the IRS to satisfy that payment. Most of the school's Feb. 25 state payment of $167,520 will go to the IRS.
* On Feb. 10, the Teacher Retirement System of Texas notified the charter school that it owed $40,260.84 for money it had failed to deposit for employees from September to January, even though it withheld the money from teachers' paychecks. Neeley points out that this could constitute a criminal violation. Howard Goldman, a spokesman for the Teacher Retirement System, said school officials had until the end of the day Thursday to respond, but no one did.
* The school owes $45,000 for three months of unpaid rent and $21,000 for unpaid utilities at its school on FM 969, the site of the former Travis State School.
The letter also cites concerns about the school's board. The school reported having six board members in October, but later information indicated only three members remained. Hillyer served on the board and then resigned on Feb. 13. State rules do not allow her to serve on the board.
The same goes for Darrick Eugene, husband of charter school administrator Chaquita Eugene. He also resigned last month.
Jim Thompson, an attorney for the TEA, said it is not unusual to have charter schools fall behind in payments to the Teacher Retirement System, though the schools usually address the issue quickly to avoid having the money the state gives them put on hold.
"What's unusual is all of these things combined, and they indicate, in the aggregate, a very serious problem," Thompson said.
The school serves about 380 students, from 3-year-olds to sixth-graders.
State Rep. Dawnna Dukes, D-Austin, wrote a letter to Neeley asking her to investigate the school, which is in her legislative district. She said she supported the school because her niece attended it and her sister worked there, but she had heard complaints from teachers.
The school has had a long list of problems since opening in 1996. This isn't the first time it has had to pay back taxes to the IRS or the first time it has failed to make deposits into the Teacher Retirement System.
And it isn't Hillyer's first brush with the IRS. She filed for personal bankruptcy in 2000, and at the time the IRS said she owed back taxes. She agreed to pay $1,700 a month toward her debts, but the court found that she defaulted on the agreement.
Hillyer acknowledged there have been challenges along the way, but the school has always moved to correct mistakes.
"We try to be as clearly on task as we can possibly be," Hillyer said. "However, we are human. We stub our toes sometimes, and when we do, we get up, brush ourselves off and move on."
The latest round of problems at the school became public last week when several teachers aired concerns about not being paid for January.
Teacher Diane Hurd said she called the Teacher Retirement System to discover that the last payment the school had deposited into her retirement account was in August, even though the school had been subtracting money from each paycheck.
Hurd said Hillyer told her that the school had to have deposited the money or else the state wouldn't allow it to remain open. Hurd hasn't been back to the school since Feb. 9.
"I haven't resigned yet, but I really am at the point where I'm making the decision if I'm going to go back or not," Hurd said. "I don't have my retirement. Then again, there's the fact that I did receive my pay, and I might get it for next month, but I just can't take a chance of not getting paid."
— Michelle M. Martinez
Charter school struggling to stay afloat
American-Statesman
2004-02-20
http://www.statesman.com/metrostate/content/auto/epaper/editions/friday/metro_state_0453fbff656cb14a0062.html
INDEX OF OUTRAGES
Pages: 380
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