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More on our charter school investigation: TJCA board member doing business with school

Yesterday, N.C. Policy Watch released an investigation about a charter school in Western North Carolina affiliated with the Challenge Foundation, a $37 million private trust that backs both conservative causes as well as several charter schools in North Carolina.

Quoted in that story was David Faunce, a school board member at the Thomas Jefferson Classical Academy, who spoke with us in the reporting of the story.

Here’s a little bit of background on Faunce that didn’t make it into the story.

Faunce is co-owner of an accounting firm, Acadia Northstar,  that does business with nearly all the charters in the state. But what the public ends up paying his company isn’t compiled anywhere at the state level for the public to see.

Acadia Northstar works with about 80 of the 99 charters in the state, Faunce said, offering help with accounting as well as governance training for charter board members, grant writing and reporting on student testing that goes to state and federal authorities. Faunce said his company charges between $80 and $110 a child, depending on the services, but would not say exactly how much public money his company takes in from North Carolina charter schools each year.

“We don’t disclose the nature of our business accounts,” Faunce said. “Discretion is a corner stone of what we’re about.”

The N.C. Department of Public Instruction, the state education agency that monitors charter schools, also doesn’t keep track of what Acadia Northstar is paid by the state’s charter schools.

Thomas Jefferson Classical Academy, the charter school of approximately 1,200 students where Faunce is a board member, paid  Acadia Northstar $85,994 for “business services” in the fiscal year that ended in June 2010, according to tax documents. The year before, the firm was paid $95,526  for “account/admin. services.”

In Rutherford County where the charter school is located,  the Rutherford County Public School System paid its chief financial officer $82,000 a year for the 9,000-student school system, according to information obtained from the school district. Other staff in the school system help with the financial and student accounting, as well as grant writing.

Faunce said he doesn’t vote on any business matters involving his company, which he started when he left Thomas Jefferson Classical Academy and joined up with another accountant doing similar work out of Raleigh. The firm went from 8 to 9 employees in 2001 to more than 40 and has two offices, on in Raleigh and one in Rutherfordton. Faunce estimates charter schools make up half to 70 percent of Acadia Northstar’s business.

Most public entities go through a bid process when they contract for work, where companies are allowed to submit proposals of charges and the type of work they’d perform. That’s what is required in the traditional school system, where state purchasing rules apply to prevent taxpayers from overpaying for services. Charter schools, because they’re separate non-profits that are in charge of their own management, aren’t subject to those rules, said Joel Medley with DPI’s charter school division.

“People say you work with 70 or 80 percent of the charters, you have a monopoly,” Faunce said. “Well, if that’s the case you need to go back to Economics 101 because that’s not the definition of a monopoly.

“The in-house accountants are our biggest competition in North Carolina,” he said.

Faunce said his prices are still competitive, and points to 700 clean audits he said have been conducted on schools that Acadia Northstar handled the accounting for. Many schools find it more reasonable to go through his company, he said.

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