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Kinston Charter Academy closed its doors back in September 2013 after years of financial mismanagement. Today, the state auditor released a report investigating the school’s financial practices.

The audit reveals allegations of fraud and abuse that took place on the watch of the school’s CEO and Principal, Ozie Hall Jr. Some of the most eyebrow-raising findings include:

School overstated attendance estimate which inflated state funds received by more than $300,000.

School employed Chief Executive Officer/Principal’s (CEO) unqualified relatives, at a cost of $92,500 in the School’s final year.

Despite ultimately owing more than $370,000 in payroll obligations, questionable payments of more than $11,000 were made to the CEO and his wife.

Despite the School’s dire financial situation, the board approved several expenses already paid by cashier’s check and often with limited supporting documentation. These expenses included vacation leave payouts to the CEO and his wife, who was serving as the board chair, and a new laptop computer for the CEO.

Investigators also had trouble verifying Hall’s past experience running a school:

Although the CEO received degrees in education and administration, his background lacked key qualifications for the position as specified in the School’s 2004 charter. He told investigators that he “ran an alternative school” in Wilmington, Delaware from 1986 to 1990. However, the CEO provided no documentation (no information on students, teachers, curriculum, address, hours of instruction) to support that claim. The Delaware Department of Education and Delaware Public Archives could not verify the school’s existence.

And then there’s this finding:

The CEO’s daughter was hired as the School’s academic officer despite a lack of teaching or school administration experience. She received $40,000 in salary during the 2012-13 school year. The CEO said her duties included monitoring lesson plans for elementary school classes and helping with implementation of Common Core standards. The daughter was a recent college graduate with a degree in American Studies. The CEO told us that she had never worked in a school previous to her employment at the School. She replaced the associate principal who had over 20 years of experience in public schools with her most recent job as “an assistant to the Superintendent” according to the CEO.

Reached by phone, Hall, who is now head of Anderson Creek Club Charter School in Harnett County, said the auditor’s report reflects basic incompetence.

“The fact that they couldn’t find it [the Wilmington, DE alternative school] is another reflection of incompetence,” said Hall. “The report contains outright fabrications.”

State Board of Education chair Bill Cobey says the board will be seeking a legislative fix this session to allow them more authority in dealing with financially troubled charter schools.

Click here to read the full report.

News

The former principal of embattled Charlotte public charter school Entrepreneur High says he plans to file a complaint Friday afternoon to seek reinstatement as head of the school and the ability to reopen its doors early next week.

“Yes, I plan to reopen the school,” Dr. Hans Plotseneder told N.C. Policy Watch Friday. “My termination [as principal] was not following the legal procedure…it was wrongful and I need to be reinstated. My lawyer is on the way to court now.”

Dr. Plotseneder says the chairman of the nonprofit board for Entrepreneur High School, Mr. Robert L. Hillman, did not follow proper procedure when he added new members to the board on January 18. On that day, says Plotseneder, Hillman then had enough votes to formally terminate him as principal (he was fired before Christmas) and get the green light to close the school’s doors.

Mr. Hillman could not be reached for comment Friday.

Entrepreneur High School abruptly shut down a week ago. The school only had $14 in its bank account and enrollment was far below the statutory minimum of 65 students. New Hanover Schools superintendent Tim Markley, who served as a reviewer of Plotseneder’s multiple applications to the state to open EHS, told N.C. Policy Watch he voted against its opening twice, saying “the financials weren’t there.” Read More

News

The struggling charter school Entrepreneur High School has shut its doors, leaving dozens of students scrambling to find new schools to finish out the academic year.

Tim Markley, New Hanover schools superintendent and a reviewer of Entrepreneur’s application, told N.C. Policy Watch he didn’t think the school should have opened.

“The application [for Entrepreneur] came forward two years in a row and I voted against it twice. The entire board turned it down the first time,” said Markley, who previously served on the N.C. Charter Schools Advisory Council.

“Honestly, I thought the financials were’t there,” said Markley. “Their plan for implementing a vocational program wasn’t there. The plan included a lot of vocational teachers, but didn’t exhibit an understanding of the business side of running a school. I was critical of it both times.”

Markley’s assessment was overruled by two other advisory council members who decided to allow Entrepreneur to open, even though they also expressed reservations about the financial and academic plans of the school that can be read in the school’s application here.

Entrepreneur High School is a vocational public charter school that had hoped to enroll 180 students in its first year. But it only attracted 78 students to start with last September, said the head of the N.C. Office of Charter Schools, Dr. Joel Medley. By January, only 31 students were attending classes.

Those low enrollment numbers — and the fact that the school continued to lose students throughout the fall — left the school in dire financial straits.

Speaking of Dr. Hans Plotseneder, the founder of the school who was fired by its board just before Christmas, Markley said, “he had a lot of passion for the school, but he didn’t have the wherewithal to start a school.”

Andrew Dunn of the Charlotte Observer reported today that Plotseneder plans to reopen the school with a combination of state funds he believes he can secure next month, loans, and a plan to sublease part of the school’s building. His hopes to have a charter management organization (CMO) take over the school eventually.

 

Commentary

Education 1If you care at all about the actions of the  North Carolina General Assembly, your “must read” for this morning on the first day of the 2015 legislative session should be this excellent overview of what’s on the table and at stake in the world of public education by NC Policy Watch reporter Lindsay Wagner.

Wagner’s report summarizes the situation when it comes to funding, teacher pay, testing, vouchers, charters, grading, textbooks and multiple other key issues. Here’s the intro:

“As members of the North Carolina General Assembly make their way back to Raleigh this week for the 2015 legislative session, many have education at the top of their agendas—which is no surprise given that the lion’s share of the state budget is devoted to public schools.

After years of frozen salaries, the busy 2014 session saw large pay bumps for beginning teachers and relatively small raises for veteran teachers—but those raises came at the expense of teacher assistants and classroom supplies as well as cuts to other critical areas of education spending.

The salary increases also came with a promise of even more raises to come in 2015.

But as North Carolina faces a year in which some predict tax cuts will lead to inadequate state revenues that leave lawmakers with little choice but to rob Peter to pay Paul, what can we expect for our public schools?”

Click here to find out.

Commentary

Yes, you read the headline right: Charlotte faces another crisis as its third charter school in less than a year –Entrepreneur High School — faces potential closure thanks to low enrollment and financial woes.

The Charlotte Observer’s Andrew Dunn has the run down on what’s happening at Entrepreneur. Here’s the takeaway:

  • The school has only $14 remaining in its bank account;
  • Enrollment is at 30 students, far below the anticipated 180 and statutorily required 65;
  • The school owes more than $275,000 back to the state;
  • The school’s board has removed its founder and principal, Hans Plotseneder, and is looking to a management company to take over the school; and
  • The State Board of Education will make a final decision on the school’s fate in March; however, it’s likely that the school will not be able to make their payroll liabilities between now and then.

What’s also fascinating, as Dunn points out in his story, is that the NC Charter School Advisory Board found serious inadequacies with Entrepreneur’s application, yet approved the school to open anyway. It’s a pattern I’ve observed with schools that have quickly run into problems and have had to shut down.

Looking at the scoring rubric that NCSAB members used to evaluate Entrepreneur’s application, many categories were deemed inadequate by at least one reviewer and many serious questions were posed. Below is a sampling of those questions put forth by reviewers–and it’s unclear if they were ever properly answered during the in-person interview because details of those interviews are not put in writing for the record.

  • Why just the minimum 1/2 of teachers licensed? — Jennie Adams
  • Realistically how many students will have their own laptop or tablet if from the lower income levels that they quote in the statistics? — Jennie Adams 
  • I have concerns about the proposed pay plan and would like more details. I am not sure it will attract the quality candidates needed to make this program work. –Tim Markley
  • RE: Financial Plan — There is not enough money allocated for remediation. School states that it will attract
    highly qualified staff but there are no benefits or salary that match that. There is a parttime
    financial secretary, but who is doing the day-to-day book keeping? — Summary review comments

Check out Entrepreneur’s application with comments from reviewers here.