A state audit released last week discovered that a charter school in Missouri had been overpaid by at least $4.3 million in the two years before it closed as a result of falsified and inflated student attendance.
According to State Auditor Nicole Galloway, the Hope Academy in Kansas City had reported a 97% attendance rate. However, the audit revealed that rate to actually be 32%. In addition, several students who had already graduated were included in the falsified records. The increased attendance gave a boost to the school's budget because charter schools receive their state funding the same way traditional public schools do, through student enrollment and attendance.
The audit also discovered that students were receiving credits for classes they were not enrolled in as well as for unapproved activities taking place outside the classroom such as grocery shopping, house cleaning, and dog walking.
Hope Academy attorney Dana Cutler said the recommendations made by the auditor did not reach the school until after it had already shut down, so she said there was nothing that could be done at that point to rectify the situation because the board did not have a school any more.
The school operated between 2009 and 2014, offering additional help to dropouts and those at risk of dropping out. The school had already been placed on probation by its sponsor, the University of Missouri-Kansas City, after a surprise visit from the state Department of Elementary and Secondary Education in 2013 unveiled some of the lowest academic performance in the state, writes Heather Hollingsworth for CJOnline.
Aside from issues pertaining to attendance, the state also discovered that one student had allegedly offered an employee $700 in return for academic credits. Once the discovery had been made, the student was issued a full refund. As a result of the incident, administrators and a number of staff members were placed on leave and the auditor's office began its investigation. The school lost its sponsorship in December 2013.
All of this caused the state to withhold its final financial payment to the school, which took the amount overpaid from $4.3 million down to $3.74 million. However, Galloway said the estimates pertaining to the amount overpaid are on the low side, as records dating back to 2010 show a high attendance rate at the school.
Galloway added that the school appears to have used the amount overpaid to purchase two additional buildings, but then defaulted on the loans.
The school had only $374,000 as of July and no way to pay back the money. While the auditor's office does not have the authority to determine if there were any "criminal violations," a copy of the audit was given to the state education department. Galloway added "the ball is in their court to coordinate with the appropriate law enforcement authorities."
"The audit confirms our concerns regarding inflated attendance reports resulting in significant overpayment to the school," the education department said in a written statement. "It is the Department's position that all funds now being held by Hope Academy be returned and distributed to serve the children in the Kansas City Public School District and K.C. charter schools."