An outside audit of a noted charter middle school in Alpharetta found contracts awarded without the competitive bidding process, conflicts of interest, co-mingling of funds, the hiring of Turkish citizens for staff positions for which there were qualified Georgians, payment of visas for family members of staff, payment of airline tickets for staff to return to Turkey for long summer visits and a lack of background checks on staff members who accompanied students to Turkey.
In a 90-minute meeting with the AJC, Fulton school chief Robert Avossa said the audit of the Fulton Science Academy Middle School represented the most “egregious” problem he had ever encountered in his 20 year career in education.
“I am not the lawyer, but when you look at this, look at the facts, it is wrong. We don’t do self dealing. We don’t take kids on field trips without proper vetting,” he said.
School officials received a copy of the audit early Tuesday but said they would withhold comment until they could discuss the findings with the academy’s board. I also asked the Georgia Charter School Association for comment and will publish it when I get it.
What complicates the damning audit is that the Fulton Science Academy Middle School is a high performing school. But is that achievement reason to ignore what appears to be mismanagement and sloppy finances at the very least?
That question is all the more critical because all Fulton schools are now charters under a new system wide charter. That means each of the 100 schools will gain greater autonomy and flexibility. But Avossa said that schools will have more instructional freedom but “The business side will be managed in a very tight way.”
Avossa said all the Fulton schools, including charters, have to be transparent and open in their operations. “In this case, those processes failed,” he said.
The audit done by IAG Forensics reveals questionable financial maneuvers that underscore a weakness in charter school management in Georgia. Under the ideal presented by charter advocates in the Legislature, including north Fulton state Rep. Jan Jones, the parent governing board of the Fulton Science Academy should have been on top of the school’s intricate and entangled finances.
But the reality is that the financial practices of the school were so complicated that the professional audit team had a hard time making sense of where money was going, to whom it was going and for what.
The cost of the audit to Fulton taxpayers will likely be $35,000, in large part because uncooperative Fulton Science Academy Middle School leaders blocked the auditors. You can read this blog to see how the school leadership slowed the audit. There is also a blog with the letter that the school chief sent the board of education.
Because of what the 70-page audit uncovered at the middle school, Avossa plans to initiate similar audits at its two sister schools, the Fulton Sunshine Academy and the Fulton Science Academy High School, both of which remain district charter schools.
“Two charters are in danger based on what we have found,” he said.
Should parents at these schools be concerned about their viability? “If my children were at these schools, that is what I would say,” said Avossa.
For instance, the audit found that a half million dollars was paid over the years to something called “Grace Institute” for unclear reasons. When pressed, the Fulton Science Academy Middle School told the county that the Grace Institute, which had the same address as the school for at least one year, provided professional development, curriculum development and test questions.
However, the auditors found that Grace Institute only had two employees, a receptionist and an IT person at the time, raising doubts about whether it had the capacity to provide training or test questions. They also found that leaders of the charter school and its sister schools had ties to the institute.
According to the audit:
Grace Institute for Educational Research & Resources, Inc. The first agreement between Fulton Science Academy Middle School and Grace Institute for Educational Research & Resources, Inc. (“Grace”) was dated November 15, 2008. This agreement was signed on behalf of Grace by Mr. Selim Ozdemir. At that time, Mr. Ozdemir was both a Board Member for Grace and the Executive Director for both Fulton Science Academy Middle School and Fulton Science Academy High School Mr. Ayhan Korucu (Board Member and current Governing Board President of FSAMS) signed the agreement on behalf of FSAMS. In addition, FSAMS’ Principal Sener also served as a Board Member for Grace; and Mr. Ozer served as both President of Grace and Curriculum Director for FSAMS.
In Form 1023, Part IX, Financial Data, and the related description, Grace states that, for the year ending 06/2009, it plans to pay salaries and wages for only two staff members, a receptionist and an information technology person.31 It is unclear what services Grace can provide to its member schools with only two paid
staff members, neither experienced in many of the service areas Grace contracted to provide to FSAMS.
In its 10 years as a charter school, the Fulton Science Academy Middle School has received $32.5 million in tax dollars. However, the county and state recently declined to renew the school’s charter. and it is now in the process of reinventing itself as a private school where parents will pay tuition.
It was that pending “divorce” that prompted Fulton County Schools to bring in an outside audit team to determine a division of assets — what resources in the schools, such as computer and other equipment, legally belonged to the school system and which the school could keep as a private entity.
Avossa said he resorted to an outside firm because the district lacked the expertise to conduct an audit that involved a $19 million public bond and co-mingling of funds.
He also did not want the district to be charged with a witch hunt against charter schools, noting that Fulton has long been open to charters and, in fact, plans on approving more as part of its commitment to greater parental choice. “We want charter schools to be part of our portfolio of choices,” he said.
Avossa noted that he has authorized audits of two non-charter schools when evidence of wrongdoing emerged.
“We have public dollars at risk in each of our schools; we have to have checks and balances. The audit brings to light that we have to balance the autonomy and flexibility of charter schools with accountability. You have to be able to play by the rules,” he said.
Fulton Science and its two sister schools entered into a $19 million loan agreement to build a shared campus. The schools sought revenue bonds through the Alpharetta Development Authority to build the campus and then began construction without following state protocol for site approval.
(Fulton school attorney Glenn Brock said the county taxpayers will not be on the hook for the bond, that it is on the backs of the schools and the investors.)
Of most concern to Avossa and Brock is the way Fulton Science Academy chose its vendors and how financial decisions appear to have benefited staff members in some instances.
“We have processes on how you secure materials, how you put goods and services out for bids. Here, we had individuals serving on multiple levels at different points in time. There were people in leadership roles in two different boards in which dollars flowed between them,” said the school chief.
An intricate chart in the audit shows a network of vendors who were used repeatedly, calling into question the openness of the bidding process, said Brock. Also, the school officials, unbeknownst to the county, pledged to pay teachers a quarter of their salaries in severance if the school closed, something that would use public funds that would otherwise go back to Fulton taxpayers.
Also, the school turned to Turkey to hire many employees including a human resources staffer and electives teachers. The school was able to bring the workers here through the “H-1B” visa program, which allows for highly skilled foreign workers who fill a need unmet by the American workforce to come to the U.S.
Typically, in education, the visas are used to accommodate hard-to-teach positions, such as a Chinese language instructors.
Avossa is puzzled why the charter school went to Turkey to fill slots for which local candidates could be found. “This was during one of Georgia’s worst recessions,” said Avossa. “When you look at how many hundreds and hundreds of teachers have been laid off in the Atlanta region, there were probably folks eligible for those jobs.”
Also troubling to the Fulton school chief is that after tax dollar were used to pay for these Turkish teachers’ visas, many left the school after one year to return to their homeland. “Changing teachers every year isn’t good,” he said. “We hold principals accountable if attrition rates change.”
A recent “60 Minutes” segment examined the rise in Turkish-run charter schools that are part of what is known as the Gulen network. The CBS report described the 130 charter schools in 26 states as economic engines for followers of Turkish Islamic cleric Fethullah Gulen, who preaches a sort of prosperity gospel, urging his followers to build schools, not mosques.
The schools are seen as economic tools, providing jobs to Turks and contracts for Turkish businesses here in the United States. There is no evidence in Fulton or anywhere else that the schools seek to indoctrinate students, a fact that Avossa stressed. He urged people to avoid xenophobia in this debate, asking that they read the audit and respond to the facts.
The CBS report also noted that the schools are very successful, which again raises the question at the start of this long blog: How much are Fulton parents willing to overlook if their children are getting a quality education?
–From Maureen Downey, for the AJC Get Schooled blog.