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Tensions Flare Over School’s Citing For Misuse Of Public Funds

Sonora, CA — A top official’s demand for a Mother Lode charter academy to return public funds deemed as excessive spending for teacher and staff “appreciation” has sparked a disagreement and legal debate over charter rights.

At this week’s County Board of Education meeting, Superintendent Margie Bulkin reported on communications between her and Foothill Leadership Academy in Sonora along with serious concerns that include citing them for misuse of public funds and excessive spending. As part of her job she is required to provide financial oversight and an annual report.

Her findings and criticisms are coming at a particularly sensitive time for Foothill Leadership Academy. It was back in 2013 that founders Ian and Emily McVey went to Soulsbyville School District with their charter request, which was denied at that level but later approved by the county board. Now into its fifth year of oversight approval, the county will in September receive an annual report and in the coming months vote on the charter’s renewal.

Excessive Wining And Dining

Bulkin shared that in a May 29 letter to Ian McVey, she called for him to restore more than $12,000 into the school coffers that had been spent between 2016 through a portion of 2018 using a credit card that she says her office only became aware of earlier this year. Among the biggest charges she flagged were restaurant receipts from two pricey restaurants; each of about $700 in one sitting at for food and alcohol at Standard Pour and Seven Sisters at Black Oak Casino and Resort. In each of the charges considered improper she says she did not receive any back up documents such as sign-in sheets and meeting agendas that might be considered to help justify some of the expenditures.

In an interview with Clarke Broadcasting Bulkin says the credit card accounting included purchases at virtually every restaurant in the area. She calls the charges “an absolute misuse of public funds.” Further explaining she states, “You can’t spend public funds for non-employees, alcohol, and gifting teachers teacher appreciation school money. In addition, they have taken out loans from their Parent Teacher Organization… the State Department of Education — and they are spending money on food and wine.”

Continuing, she says, “It is unacceptable — and as County Superintendent I have to be the one to point it out — and they are not happy with me. But that is my job and I won’t turn a blind eye…when these dollars needed to be expended on students, teachers’ salaries, supplies for the classroom, better benefits for teachers and a number of other things that the school could use them for.” She says she additionally called for the school to not require parents to pay for field trips in order to comply with free and public education requirements and that school officials were offering parents the option to receive rebates and/or donate the monies back to the school.

No Apology Forthcoming

Bulkin did not hear back from the school until she received an email on June 8 from Kelly Bressel, the academy’s board chair. While it outlined an action plan, the letter also emphasized that the board did not agree that the money spent was a “misuse or improper expenditure of public monies.” She maintained that Bulkin had not raised concerns about the school’s cash flow until last December and expressed deep concern for how what she called the superintendent’s “misrepresentation” would affect the school.

The school’s argument is that there was no misuse of funds because they came from private fundraising, which the founders and board believe can indeed be used for appreciation and morale purposes. Bressel’s email letter conceded that, moving forward, the “private’ monies would be kept in a separate account and that private fundraising efforts would clearly promote their purposes as well as potential uses of the monies. She added that the academy’s leadership and board is now planning to review all fiscal policies and procedures to consider any revisions that would “support and promote transparency in the use of public funds and a free education as defined by the State of California.”

Bulkin, who takes issue with both the criticism and the school’s perspective, says she appreciates the progress made on paying back the funds. “They made arrangements to use all the money they raised at their fundraiser last month and money that they have from their Parent-Teacher Organization to pay back $9,785,” she notes. She says her office has yet to receive requested credit card statements for 2014-15 or the rest of 2018 so it is likely there will be more paybacks necessary to cover what she solidly terms as non-school related purchases.

Charter Law Cloudy

Bulkin says, “The use of public funds for alcohol somehow caught everyone’s attention…but they have been noncompliant on four or five issues on their charter, including not notifying us when they have gone out for loans three times, not paying their teachers’ retirement system, which they’ve rectified…which I chalk up to inexperience and charter law, which I think is probably weak in that, in order to run a charter school you do not have to have an administrative credential.” She is quick to add that charter schools serve an important purpose, particularly noting Connections Academy and Gold Rush Charter School as standout success stories that also demonstrate strong administration.

She cites a landmark case for charter schools involving the founders of a San Fernando Valley charter, Ivy Academia, who were convicted of a felony back in 2013 for misappropriating more than $200,000 in public funds. Although there were other factors involved, they similarly insisted that much of their questioned spending was for activities such as group or individual “teacher appreciation” activities to build morale.

The defense attorneys argued that charters are independently managed, publicly funded and exempt from some rules that apply to traditional schools and the California Charter Schools Association also took the position that “no crime was committed.” However, the court’s decision ultimately sided with Los Angeles District Attorney’s Office: that operators of charter schools cannot use public funds for their personal use, or they will be prosecuted.

Foothill Founder Chimes In

Clarke Broadcasting was able to talk with academy co-founder Emily McVey, who echoes Bressel’s criticism that a lack of consistent oversight by the superintendent’s office is the main reason why the school ended up under a harsh spotlight. “If they are doing their oversight properly they should know we have a credit card. We had one from the first year. It is very common,” she maintains. With regard to loan issues, she says the academy is paying off a common charter school revolving loan and that it funded its startup needs through a sale of the school’s receivables through Charter School Capital.

McVey describes the relationship between the school’s leadership and county board of education members as one that is positive and open. Addressing Bulkin’s citing of improper spending she emphasizes, “It doesn’t matter that we are a charter school — we agree with Ms. Bulkin  — just because we are a charter school and have more flexibility that does not mean that we can misuse public funds. We agree to that, so we are on the same page with that. But, again we do not agree that we misspent public funds because they were not public funds — they were private funds.”

While she does not think any of the purchases Bulkin flagged needed to be paid back, McVey says the remaining balance will be paid off from proceeds of an upcoming summer camp she runs with the Young Americans and there are other fundraisers planned. McVey states that despite the current issues, “I and many, many other people see no reason why the school [charter] should not be renewed.”

Citing students’ proficiency scores in English and Language Arts at least ten percent and Math scores about eight points over the state averages, she says the finances are good and the school has a waiting list. She adds, “We have families and children who are extremely happy — and I really feel that the county board of education understands and sees that — and recognizes the need for school choice in our community.”