Records shed more light on Kenilworth charter school

Before it successfully persuaded state leaders to renew its operating contract on Dec. 5, the organization behind a troubled Baton Rouge charter school had to overcome concerns about how it manages taxpayer money.

Kenilworth Science and Technology Charter School also was dogged by well-publicized problems at its sister school in New Orleans, which the state closed in 2011.

Six days after Kenilworth’s charter was renewed, state and federal agents raided the middle school, confiscating boxes of records. Government agencies involved in the raid aren’t commenting on the purpose of it. The case is under seal in U.S. District Court in Baton Rouge.

In response to a public records request, The Advocate this week received some records from the Louisiana Department of Education that shed more light on Kenilworth’s path to renewal.

The Advocate, however, has yet to receive records it requested about a 2011 investigation into Kenilworth launched after the state Board of Elementary and Secondary Education voted to close Kenilworth’s sister school in New Orleans, Abramson Science and Technology Charter School. Abramson was beset by allegations of failing to act on sexual misconduct by students, faking science fair projects and attempted bribery of a state auditor.

Documents released to The Advocate in August 2011 suggested the investigation of Kenilworth was looking into how the school handled special education, which involves federal dollars, the ratio of special education teachers to students, a high number of uncertified teachers in general and reports from parents of a “prayer room” at the school apparently used by some teachers and outsiders, all of Turkish descent.

State officials have yet to say how that investigation was resolved or if it was resolved.

Charter schools are public schools run by private groups via contracts or charters.

A charter school’s letter grade is the main factor in determining whether Louisiana renews the school and for how long. So a school with an A or B is up for a maximum renewal of 10 years, a C school is up for only a five-year renewal and a D or F school only a three-year renewal.

Kenilworth has steadily improved its test scores since 2009 when it took over a traditional, but chronically low-performing Baton Rouge middle school, also called Kenilworth. It now has about 560 students. But it wasn’t until the 2012-13 school year, when it improved from an F to a C grade, that the school was able to seek an automatic five-year renewal.

On Dec. 5, state leaders submitted a bare bones, one-page report recommending renewing of Kenilworth’s charter for five more years, until 2019. The report noted the C grade and said the school had “no fundamental violation of legal and contractual standards.” The state Board of Elementary and Secondary Education, with little discussion, agreed to the renewal, approving Kenilworth at the same time it approved several schools.

Even so, that report, short as it is, hinted at continued financial problems. Schools with high financial performance earn a label of “no action,” indicating a clean bill of health. Kenilworth, however, has spent the past three years on a state watch list.

Kenilworth leaders say they expect to finally improve to the “no action” label. They point to a forthcoming audit in which auditors find the school has dealt with problems uncovered in past audits and now has healthy financial reserves.

The state’s most recent determination is still that the school’s financial performance requires being “monitored” for problems. The two previous years, the school earned the lower label of “dialogue,” meaning its finances necessitated detailed review, including conference calls and site visits. If the school had failed to improve its label, its automatic renewal would have been in jeopardy.

Records The Advocate received this week showed that those poor financial labels arose in part from items flagged by auditors hired by the Pelican Educational Foundation to conduct its required annual audit.

The 2011-12 audit, conducted by the Metairie office of Carr Riggs & Ingram, found five different instances of “material weaknesses” in the school’s internal controls. The school failed to reconcile accounts dealing with grants revenue, expenses and accounts payable. Kenilworth also failed to maintain records on its inventory and fixed assets, and failed to record any depreciation on those assets.

Finally, Kenilworth paid out $8,360 worth of gifts to students who had high scores on the spring 2012 LEAP tests, a practice the auditors questioned because it might run afoul of a state constitutional prohibition against donating public property.

Audits for the previous two fiscal years, when Pelican ran Kenilworth as well as Abramson, revealed a much different problem. That problem was Pelican’s failure to reserve the equivalent of at least 6.5 percent of the school’s operating expenses in case of emergencies or unforeseen expenses. Consequently, state leaders assigned the school the low label of “dialogue,” jeopardizing the school’s charter renewal.

To improve its balance sheet, according to a state report, Kenilworth increased enrollment, partnered with a neighboring school on transportation, switched school lunch vendors, stopped contributing money to the state’s teacher retirement system in favor of a defined contribution retirement plan and hired an in-house maintenance person instead of a janitorial service. Its reserves grew from about 2 to almost 8 percent of spending, prompting the state to improve the school’s financial label.

Carr Riggs & Ingram recently completed an audit for fiscal year 2012-13 and is submitting it for approval to the Louisiana Legislative Auditor’s Office. In it, auditors say Kenilworth has resolved the five negative findings uncovered the year before and they calculate year-end reserves equivalent to 12 percent of spending. Consequently, the auditors are giving the school an unqualified opinion.

The state apparently did not raise red flags over another problematic development recounted in the school’s 2010-11 audit, conducted by a different auditing firm, LaPorte CPAs & Business Advisors. The audit was delayed for three months in part because of a dispute between LaPorte and Pelican.

In the audit, LaPorte revealed that in Oct. 2011, just as the firm was finishing its work, the U.S. Attorney’s Office had subpoenaed financial records “regarding the foundation, a board member, and a former member of its management” but did not disclose what the investigation was about. Although the audit was otherwise clean, LaPorte gave Pelican’s books only a qualified opinion, citing the subpoenas and the resulting “uncertainty.” Pelican officials objected to the designation and pressed unsuccessfully for a higher unqualified opinion.

In its audit the following year, Carr Riggs & Ingram noted the federal subpoenas but declared the issue resolved because there’s been “no further information requested on this matter.”