District to address academy’s financial concerns
Acton-Agua Dulce Unified School District Governing Board members expected to discuss charter school’s monetary situation
Concerns about the financial stability of the Albert Einstein Academy of Letters, Arts & Sciences—Agua Dulce Partnership Academy have inspired the Acton-Agua Dulce Board of Trustees to consider a “Notice of Violation” to the charter school’s CEO and Board.
“We are legally required to provide legal oversight… part of that oversight is to make sure they are a viable operation,” the district’s Governing Board president, Ed Porter, said of the K-12 charter school located in Agua Dulce.
The Governing Board is expected to discuss the charter school’s financial situation Thursday before voting on whether or not to send the violation notice to the Einstein leadership team, according to Thursday’s meeting agenda.
“Our highest priority is going to be serving the children of Acton and Agua Dulce, and we are not in any way going to leave those children hanging,” Porter said. “The children of Albert Einstein, we would like to help in any way we can… but the fiduciary obligation of those children falls on the board of Albert Einstein Academy.”
The drafted letter in the agenda states that the charter schools engaged in “fiscal mismanagement” that has jeopardized the school’s ability to deliver its educational program, remain financially solvent and fulfill obligations to staff, vendors and other creditors.
“This is the third year in a row in which the district has informed AD Partnership of significant concerns over AD Partnership’s fiscal instability and negative ending fund balances, significant debt and need to develop and follow through on Fiscal Stabilization Plans,” the letter read.
To remedy some of its financial problems, the AD Partnership has continued to take out loans, including a new loan as recent as March
2 to meet cash flow needs.
“It also appears increasingly likely that AD Partnership will never be able to return to fiscal health as it has been forced to continually borrow to meet immediate needs, increasing its debt service payments in the process,” the letter read.
The district’s board also has its own concerns about a potential email and letter sent to parents that tied a recent fundraiser to required programs provided by the charter school, an action which would be illegal under California Education Code.
This letter to parents—stating that certain programs were not available due to a lack of money from a fundraiser—is expected to be the main topic of conversation during the board’s discussion about the charter school.
“(Agenda item) 10.2 is a discussion in regards to all these letters we’re getting as well as the possible illegality of tying required programs to fundraisers,” Porter said. “A letter went out to the parents and we want to discuss that.”
The board’s action on the notice of violation is not a motion to remove the Agua Dulce Partnership’s charter petition; however, if the charter school is unable to remedy the district’s financial concerns and questions, it could result in the cancellation of the petition.
The district’s Governing Board said the Albert Einstein leadership has until April 13 to submit a written response to the violation before the district takes any action to revoke the charter petition for fiscal mismanagement.
Ongoing Financial Concerns
In 2014, the Albert Einstein Agua Dulce Partnership opened its doors as a K-6 brick-and-mortar school under a charter petition approved by the district’s Board of Trustees. The application was turned down by Santa Clarita Valley school districts that expressed concerns over the school’s finances in their reviews of the applications.
During its four years of operation, the AD Partnership, as well as other schools under the Albert Einstein umbrella, struggled to meet financial obligations it set forth in its charter petition and plan.
Correspondence from the district’s board indicates that the charter school has operated with a negative ending fund balance since its first interim budget report in January 2016. The board also expressed concerns about debt from AD Partnership’s operator in February 2017.
This operator also manages the Albert Einstein STEAM Academy in Newhall, and was in charge of the Albert Einstein Academy in the William S. Hart Union High School District, which closed its doors last year after the Hart district and the Los Angeles County Office of Education denied its five-year charter renewal request due to similar financial concerns.
Despite these concerns, the district’s board narrowly voted to give the AD Partnership Academy a one-year provisional extension to its charter petition that allowed it to its expand its brick-and-mortar offerings to students in K-12.
“Last year, we gave them a one-year provisional extension of their petition,” Porter said. “This thing passed by a narrow margin. Two of the people who voted on it were on the fence, one person was for it and that was me… because I felt we had partnership with them and they deserve another chance.”
In October 2017, Albert Einstein’s Agua Dulce Partnership was part of the focus of a larger State Auditor’s Report about the oversight and monitoring of charter schools in the Acton Agua Dulce district.
The report found that the charter petition for the school should not have been authorized due to a lack of parent and teacher signatures, a failure to obtain community support for the school and an inability to meet the district’s minimum reserve requirement.
These financial and enrollment concerns were expressed by the district’s chief financial officer, but the former superintendent recommended the approval of the charter petition because “none of the financial concerns was severe enough to warrant denying the petition,” according to the audit.
“Although Albert Einstein Academy is still operating, low enrollment could lead to the school’s bankruptcy and eventual closure,” the audit report read.
This prediction is a current factor for the school and its upcoming renewal petition, which is set to be reviewed by the district’s board this year.
“Albert Einstein was an institution that had 3,100 students that wanted to attend it,” Porter said. “There was 1,600 on a waiting list with a lottery system, and they’re down to 200 now.”