Charter school gets bad report card from state auditor

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Screen Shot 2016-01-28 at 11.12.49 AMA report from the State Auditor’s office indicates that  Providence Creek Academy Charter School (PCA) lacked sufficient controls that would have prevented funds from misuse.

The school is located in Clayton on the Castle-Kent  county line.

Click here for the full report.

The office found “PCA’s deficient fiscal operations and close network of personnel led to a misuse of school funds. More than $11,000  in transactions proved to be for personal purchases such as utility payments, collection agencies, and timeshare payments. An additional $20,609 remained unsubstantiated as legitimate business purchases but were suspect.”

The office noted, “There was no mention of any issues by SB & Company, LLC, the CPA firm contracted by PCA to perform the financial statement audits. SB & Company, LLC issued unqualified opinions with no findings on internal control or compliance over financial reporting for fiscal years 2012, 2013, and 2014.”

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SB is based in suburban Baltimore and has offices in Virginia and Florida.

Other areas of concern include unsupported salaries worth more than $215,000 for individuals described as having a close relationship with the former Finance and Human Resources Manager and direct reimbursements that were entered or approved by an individual no longer employed at PCA.

“Work is needed to improve PCA’s operations. Charter Schools should utilize the Committee of Sponsoring Organizations (COSO) Internal Control Framework as a guide to developing strong internal controls that support good fiscal operations and help to deter fraud, waste, and abuse,” the release stated.

“A clear and consistent message is needed from all state agencies about fiscal accountability over charter school funds, including local funds,” the report stated.

Loose financial controls have been criticized by legislators at charter schools that receive state school funds and are given wider latitude than conventional public schools in curriculum and other.

Another issue has been the administration of schools with individuals without sufficient experience or knowledge when it comes to finances. A few charter schools have closed over the years, due to financial problems.

Charter schools,while receiving state aid for each student enrolled, have to come up wth start-up funds, leaving some institutions in poor shape if enrollments don’t meet projections.

More successful schools like the  Wilmington and Newark charter schools have been abe to tap financial markets, but other schools have struggled.

A final concern is the ability of schools to “skim the cream”  of top students, leaving pubic schools with large populations of disadvantaged enrollees.

Advocates of the schools say charters produce competition that improves outcomes for students.

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