N.C. Attorney General Roy Cooper has filed suit against an eastern North Carolina charter school, contending that leaders of the now-closed Kinston school mismanaged public funds.
Cooper’s office released the details of their complaint against Kinston Charter Academy Tuesday, which named the school, CEO Ozie L. Hall and the school’s board chairwoman, Demyra McDonald-Hall, as defendants.
“Charter schools receive taxpayer dollars to educate students and they have a duty to spend them wisely,” Cooper said in a statement. “There are many excellent charter schools but North Carolina needs more tools to protect families who choose charter schools.”
From Cooper’s statement:
Currently state law fails to adequately provide how North Carolina can fully recover taxpayer dollars from charter schools that fail or become insolvent. Legislators should put safeguards in place to protect public education resources, Cooper said.
The complaint filed today in Wake County Superior Court alleges violations of North Carolina laws on deceptive trade practices, non-profit management and false claims. Cooper is asking the court to freeze the defendants’ assets and order them to repay misspent state funds as well as pay damages and civil penalties.
As alleged in the complaint, Hall and McDonald-Hall:
- Falsely inflated the number of students Kinston Charter Academy would enroll so they could get more tax dollars, even though they knew the school would not be able to stay open for the 2013-2014 term.
- Failed to disclose the school’s problems to students and their families, recruiting new students to enroll in the school while on the verge of closing it.
- Took out risky loans with exorbitant fees and interest rates, borrowing $170,000 for less than two months at a cost of $60,000 which put the school in worse shape financially.
- Used public money intended for educational purposes to enrich themselves and their family.
A January, 2015 report released by the State Auditor revealed many of the financial improprieties alleged in the lawsuit, including more than $11,000 in payments made to the defendants for unused vacation time and unspecified reimbursements and $2,500 to a daughter for a website that didn’t work—all while Kinston Charter Academy owed $370,825 for teacher salaries, insurance, retirement and other payroll obligations.