A closed Kinston charter school mismanaged state money, inflated its enrollment and hired the principal’s unqualified relatives, according to a stinging state audit released Wednesday.
Some of the audit findings were referred to the State Bureau of Investigation and the Lenoir County district attorney for possible prosecution.
The Kinston Charter Academy – which closed in September 2013 – received more than $666,000 in state money in July 2013, despite multiple citations for mismanaging money, the audit says.
The school’s former CEO, Ozie Hall Jr., strongly disputed the audit findings, calling them “false and misleading.” The state Department of Public Instruction contributed to the school’s demise, he said.
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Hall, who now runs a Harnett County charter school, said the audit is full of innuendo. “Nobody stole any money,” he said in an interview. “Nobody took anything they weren’t owed.”
Hall filed a complaint with the state Office of Administrative Hearings in late January in an attempt to prevent the audit’s release.
The audit recommends more active monitoring of all charters by the state Department of Public Instruction. The report also recommends the State Board of Education prohibit familial relationships at charter schools between board members and senior administrators. Additionally, theState Board should consider prohibiting the employment of family members at charter schools, the audit says.
The fraised six problems:
• The school received more than $666,800 from the state in July 2013 – money that was supposed to last until October. The school spent all the money before it closed on the ninth day of classes in early September. The state was not able to recover any of the money.
• The school overstated estimated attendance, which inflated its state payment by $300,000. It used the money to pay old debts rather than expenses for the upcoming school year. The auditor referred this to the SBI and Lenoir County prosecutors.
• The school’s board and CEO lacked the background and experience to properly oversee a school. The school’s board approved vacation pay for Hall and his wife, who was serving as the board chairwoman, while other employees were not paid for working in the last month the school was open.
• Hall’s wife also served as dean of students. His daughter was hired as the academic officer. The audit says neither had the experience needed for those jobs. The school paid the two a total of $92,000 in its last year.
• The school regularly missed paying teachers and staff and failed to submit state retirement contributions.
• Declining attendance, promises of private money that didn’t come through, and high operating costs contributed to the school closing.
In a written response to the audit, Hall said it distorts facts. The conclusion that Hall mismanaged $666,800 is “a boldface fabrication,” he wrote. The school did not inflate its enrollment estimate for the 2013-14 year, the response said. Rather, attendance fell short of expectations.
Hall’s wife is an experienced charter board member with a law degree, and his daughter was “uniquely qualified to work in a high poverty environment,” the response said.
The state Department of Public Instruction and the State Board of Education agreed with the audit, and said in its response that Hall repeatedly made excuses for financial problems, when the issue was his mismanagement.