Audit Finds Uncredentialed Teachers, and Sloppy Bookkeeping at Washington’s First Charter School

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According to a new report from a Washington auditor, the state’s first charter school has sloppy bookkeeping, improperly certified teachers, and a myriad of other problems.

In the report, acting State Auditor Jan Jutte says First Place Scholars needs to do a better job of following state laws, and tracking how taxpayers’ dollars are being spent, issues she claims stem from inexperience in following state laws, as well as from deeper financial troubles. Though she characterizes the problems as sloppiness, she also says that they’re not unusual ones for a startup organization to have.

“I think they didn’t know a lot of the laws and rules. They had a big learning curve where I think it would have been good for somebody to step in and help,” said Jutte.

First Place Scholars Charter School opened its doors in Fall 2014 after a voter-approved law allowed charter schools to open in Washington. Since that time, the charter commission has been tracking the school’s problems. It had encountered numerous governance issues at the charter school, including a lack of special education services. Last December, it put the school on probation. The commission was also the one to request the audit.

The problems that the audit found included:

  • Teachers lacking proper certification at the start of the school year.

  • Smaller enrollment than anticipated, leading to the state overpaying the school more than $200,000, as it based the distributed amount on estimated enrollment.

  • Non-compliance with the Open Public Meetings Act.

  • Confusion over whether the school, or the nonprofit that supports it, spent money, and whether public dollars were used for nonprofit expenses.

  • Inadequate bookkeeping on expenditures and revenues.

  • Cash flow problems, which nearly left the school without enough money to cover its payroll at one time.

“Charter Schools are independently run public schools that are granted greater flexibility in its operations in return for greater accountability for performance,” says John Miller, CPA, CFP, Partner, Klein Hall CPAs LLC. “When the decision is made to start a charter school along with it comes the responsibility for understanding and complying with all of the existing laws, regulations, and expectations that exist. It appears that there is room for improvement in the charter issuance process and performing more subsequent regular monitoring.”

The school’s future is now uncertain. Not because of the audit, though, but because Washington’s Supreme Court ruled earlier this month that charters are unconstitutional, based on the fact that they’re overseen by appointed boards, rather than elected ones.

Both the State Charter Schools Association and State Attorney General Bob Ferguson have said they plan to file motions for reconsideration.

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