Findings, questioned costs exceed $1 million in audit of closed charter school
Columbus – State auditors cited more than $1 million in overpayments, unsupported spending and questioned costs in the closeout audit of a shuttered Columbus charter school released today by Auditor of State Dave Yost.
The ScholArts Preparatory and Career Center for Children shut its doors on Feb. 28, 2013 but neither the school nor its sponsor, Kids Count of Dayton, completed the community school closing procedures required by state law. The school also neglected to repay $477,888 in state foundation overpayments that resulted from its overreporting of student attendance during the 2012-13 school year.
During the audit, the Auditor’s office experienced significant delays in obtaining complete and accurate records from school management. Some records, including bank statements and cancelled checks, were never presented and had to be obtained through a subpoena.
“An unwillingness to cooperate screams ‘suspicious,’” Auditor Yost said. “This school’s management ripped off Ohio’s taxpayers and must be held accountable.”
Auditors found no documentation to support $5,369 in credit card purchases or $640 in checks written to 10 individuals in 2012. Without supporting documentation, auditors could not determine if the expenditures served a proper public purpose.
A $477,888 finding for recovery was issued against the school for the foundation overpayments owed to the Ohio Department of Education (ODE). An additional $6,009 finding for recovery was issued against the school’s CEO, Cheryl Parchia, for the unsupported expenditures.
Due to insufficient documentation, auditors were unable to conduct a complete review of the school’s compliance with requirements for federal expenditures. According to the report, “Financial records were incomplete and supporting documentation for federal expenditures was lacking or non-existent.” As a result, auditors questioned all costs – a total of $647,901 – associated with federal programs. The matter will be referred to ODE.
The audit also found the school failed to withhold payroll tax deductions for its board of directors. Additionally, the school did not pay State Teachers Retirement System (STRS) and School Employees Retirement System (SERS) employee and employer contributions for employees contracted from the Brookwood Community Learning Center and Highland Community Learning Center. The Auditor’s office will refer the matters to the appropriate agencies.
A full copy of this report is available online.
The Auditor of State’s office, one of five independently elected statewide offices in Ohio, is responsible for auditing more than 5,900 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.
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