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Conflicts of Interest Plague Richard Allen Academy Schools
More than $929,000 in Findings for Recovery Issued
Columbus – Booze, missing money, missing records and self-dealing has led to more than $929,850 in findings for recovery in the special audit of Dayton-area Richard Allen Academy schools released today by Auditor of State Dave Yost.
“It’s a shame that well performing community schools are being undermined by this kind of conduct.” Auditor Yost said.
During the regular financial audits of the four Richard Allen Academy schools for the fiscal year ended June 30, 2009, the Auditor of State’s office identified several issues that prompted the office to conduct the special audit. Many of the areas of concern were related to payments to management company president/CEO Jeanette Harris and included potential conflicts of interest with family members, overpayments to the management company, and lack of policies, procedures and documentation.
This special audit covers the period of July 1, 2008 through June 30, 2010 with the purpose of determining whether certain expenditures and payments to credit card companies were supported and related to the operations of the schools. During this period, Jeanette Harris served as president/CEO of the schools’ management company (Institute of Management and Resources), owned and operated a for-profit business (Institute of Charter Schools Management and Resources) that leased building space to the schools, and along with her husband, founded the schools.
Total findings for recovery issued in the audit are $929,850, with $888,411 left unpaid to date. Of the total findings for recovery, a finding of $408,240 was issued against the Institute of Management and Resources for overpayments and insufficient supporting documentation for expenditures. An additional finding for recovery in the amount of $215,058 was issued against the Institute of Management and Resources for insufficient supporting documentation, overbilling, and incorrect billing for employee payroll and benefits.
During the audit period, unsupported funds transfers were made in the amount of $238,389. Richard Allen Academy and Richard Allen Preparatory, Inc. had lease agreements with the Institute of Charter School Management and Resources, and of the fund transfers, it was determined that $65,600 was for lease payments. The schools did not have any other contracts with the company to receive other services. A finding for recovery in the amount of $172,789 was issued against the Institute of Charter School Management and Resources for unsupported funds transfers. This matter was referred to the Ohio Ethics Commission.
Jeanette Harris purchased alcohol for the schools’ Monte Carlo holiday party and was reimbursed in the full amount of $1,002. The expenditure of public funds for alcoholic beverages is not considered to be for proper public purpose, and therefore a finding for recovery in that amount was issued against Harris. The finding was paid by Harris to the schools, and therefore is considered to be repaid under audit.
The four 2010 financial audits of the Richard Allen Academy schools were also released today. Full copies of these audits and the special audit are available online at www.ohioauditor.gov.
The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,600 state and local government agencies. Under the direction of Auditor Dave Yost, the office also provides financial services to local governments, investigates and prevents fraud in public agencies and promotes transparency in government.