Taylor: Dayton Charter School Founder Bilked School, Taxpayers out of $116,000

Main Street Automotive Magnet School also cited for “abusive” business practice

Thursday, August 13, 2009

Montgomery County -

Auditor of State Mary Taylor today detailed how the founder of a suspended Dayton charter school used his own private business to defraud the school and Ohio taxpayers out of $116,000.

In the report released today, Taylor cites Main Street Automotive Magnet School founder Joe Singleton, owner of RJ Investments, for using school funds to make personal purchases including a golf cart and a private security system.

Taylor also cites Main Street Automotive Magnet School for engaging in an “abusive” business practice.

“My office has identified the waste and misuse of public tax dollars intended to enhance the education of Ohio’s school children,” Taylor said. “We have referred our report to local prosecutors and the state Attorney General asking them to pursue criminal charges.  I will not tolerate fraud involving public funds and will continue to devote the resources necessary to ensure allegations of fraud are investigated and the perpetrators held accountable.”

The audit indicates that Singleton used his own company, RJ Investments, as a front to bilk the school out of $116,677.76. For example, Singleton used RJ Investments to bill the school $60,202.25 for transporting students to and from school facilities. However, Singleton was never licensed by the state to transport students, as required by Ohio law, nor was he able to produce any records proving he ever provided students with transportation.

Additional findings against Singleton include:

  • $13,342 deposited into RJ Investments’ bank account to pay for a security system and security equipment that was never installed
  • $9,962.77 used to pay for the installation of a security system at a warehouse owned by Singleton’s mother that is not affiliated with the school
  • $5,990 paid to a local car dealership for an EZGO Golf Cart

Singleton admitted to creating fake invoices to make many of the purchases outlined in Taylor’s report. For example, Singleton created an invoice for the purchase of classroom chairs, computer desks and cafeteria refrigerators then used the check he received from the school to purchase the EZGO Golf Cart for his personal use.

The report also cites Main Street Automotive for an abusive business practice. Government Auditing Standards describe abusive business practices as behavior that a prudent person would not consider reasonable or necessary.

In this case, the school subleased two rooms for use as an automotive laboratory valued at $15,570 over a 21-month period. However, the current occupant was already leasing the same space plus an additional room for only $7,350 during the period. As a result, the school was paying the current occupant more than twice the market rate to sublease classroom space. Furthermore, students never used the space during the entire 21-month lease period.

The report indicates the school’s sponsor, Lucas County Educational Service Center, suspended Main Street Automotive from operations on August 7, 2008 for failing to meet state and federal requirements for student performance and staffing.  On July 14, 2009, the sponsor took action at a board meeting to close the school.

A copy of the complete audit is available online at www.auditor.state.oh.us.