Oklahoma City Public Schools on Monday called on State Auditor Cindy Byrd to audit Santa Fe South Charter Schools.
In a unanimous vote, the district’s Board of Education made the request following an hourlong executive session. State law says the state auditor “shall” fulfill the request and a spokesman for the state auditor’s office said Byrd had not received the letter Tuesday.
“The purpose of the special audit requested is to determine compliance with statutes, rules, policies and internal control procedures,” an OKCPS statement said. “In light of comments shared at the OSDE Board of Education meeting on Friday, April 9, the Board felt this was an important step to take as an authorizer of Santa Fe South.”
Those comments were shared last week by attorney for the Oklahoma State Department of Education Brad Clark about Santa Fe South’s financial status in relation to a loan it gave another charter , Sovereign Community School, which is currently under accreditation probation.
In a small portion of a five hour meeting, Clark questioned why Sovereign Community School – a charter that’s been plagued with operational issues – would want to work with Santa Fe South.
He pointed out figures that Santa Fe South has reported to the state, which illustrated that the charter school spends less than half of its annual state funds on instruction. He further questioned how the district is spending $8.8 million on “operation and maintenance of plant services.” Plant services are generally related to utility delivery.
In an interview, Clark said what that money goes toward isn’t defined and warrants further investigation.
Additionally, Clark said the charter school district is sending millions of dollars to the Santa Fe South Development Corporation, which is also run by the district’s superintendent Chris Brewster. That setup is very similar to one Epic Charter Schools has with its management company.
“I don’t know that it is different as far as the structure. But one thing I don’t know is whether Santa Fe South Development Corp. is actually serving as a management company,” Clark said.
The school has paid a $421,000 “management fee” to the development corporation, according to its most recent tax filings. It’s highly unusual, but not necessarily a problem, Clark said.
“That was a new one just for me personally,” Clark said. “But it’s allowed.”
Oklahoma City Public Schools is the longtime authorizer of Santa Fe South. However, the charter district is switching over to Oklahoma City Community College this summer.
Brewster, Santa Fe South’s superintendent, has called for more funding for charter schools because charters don’t have access to some of the revenues traditional public school districts do.
He tweeted a response to the audit request Tuesday morning.
“Last night’s sneak attack by OKCPS was a cowardly attempt to undermine the good work of SFS,” he wrote in a tweet. “If there was anything to be concerned about, wouldn’t they have addressed it at some point in the 19 years they have “overseen” our contract? Looking forward to dealing with these bullies.”
In a statement to StateImpact, Brewster said he was “blindsided” by the audit request and defended the use of the development corporation.
OKCPS has “never reached out to us with concerns about the SFS Development Corp, a 501(c)3 supporting organization which exists to support SFS Schools,” he wrote. “The SFS Dev. Corp is a non-profit with no employees which holds the property acquired and developed for SFS Schools.”
He further blasted the district.
“We have paid OKCPS millions in authorizer fees over the course of our contractual relationship with them and have never received any substantial oversight or support,” he wrote.
Byrd, the state auditor, is no stranger to performing special audits on charter schools. And she found a similar relationship to the one between Santa Fe South and its development corporation to one at Epic and its management company.
Late last year, Byrd’s office released a more than 100-page scathing audit of Epic Charter Schools. The audit led to a series of repercussions for the school.
The school was fined $11.2 million by the State Board of Education, though it hasn’t paid it back. Oklahoma Attorney General Mike Hunter appointed special counsel Melissa McLawhorn Houston to review the auditor’s report and make determinations about criminal charges. And the Oklahoma Statewide Virtual Charter School Board voted to begin the termination process of Epic’s contract with the state, though that process has been dragged out for months.
In a video presentation to the Oklahoma State School Boards Association, Byrd said a second part to the audit was coming.
As for Sovereign – the indigineous-focused charter school that brought Santa Fe South’s financial dealings into the limelight – its future remains even more cloudy. The school has been unable to recruit students and it’s on rocky financial footing.
It recently entered a loan agreement with Santa Fe South, though it’s unclear whether the two sides actually signed that agreement.
The terms say if Sovereign can’t repay its debts, the property in the school will be turned over to Santa Fe South, but it remains unclear whether the contract is executable because it wasn’t signed. Sovereign representatives say they plan to repay it.
CORRECTION: A spokesman for State Auditor and Inspector Cindy Byrd said the word “not” was omitted from his response to a question from StateImpact and the office hadn’t received a copy of OKCPS’s request to audit Santa Fe South Tuesday.
This post has been updated to include comments from Chris Brewster
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