On July 7, 2008, Louis Cross stepped into the soon-to-be Ethel Hedgemen Lyle Academy High School College Preparatory on 1881 Pine Ave.
It was his first day as principal, and it was shocking, he said.
The five-story building was empty. The ceiling tiles in the lunchroom were falling down. There was no furniture, no books. He had until the end of August to get the school up and running.
“It was quite a challenge,” he said. “When we broke from Imagine Schools, we couldn’t bring anything with us.”
The academy, one of St. Louis’ first charter schools, was founded in 2000 by the Alpha Kappa Alpha Sorority, Inc., Omicron Theta Omega chapter. As with most of the 20 charter schools in the city, the sorority hired various educational management companies over the years to manage day-to-day operations. From 2004 to 2008, that company was Imagine Schools, which operates five charter schools in the city.
As communication weakened between Imagine Schools and the sorority, the school board, all sorority members, decided to break away from Imagine’s management, said Margaret Berry, president of the sorority chapter.
It wasn’t a clean break.
“They took everything,” said Sharon Burroughs, school board member at the academy.
Paul Faber, regional executive of Imagine Schools, said in an email to The St. Louis American that Imagine kept a majority of the equipment and books that were bought through the charter’s funds, but not State funds.
So in fall 2008, Louis Cross found himself ordering books and supplies. Albert Harold, hired as superintendent a few months earlier, was busy getting the walls up. Harold was let go after one year and replaced by Mulugheta Teferi.
It’s been a hard two years, Cross said. He wasn’t surprised when Missouri Baptist University, the charter’s sponsor, told the school board it was going to revoke its sponsorship of the academy on April 29. By Missouri law, charter schools in St. Louis must be sponsored by a university, college or the St. Louis Public School District.
In an April 29 letter to board President Tommy Davis, Missouri Baptist cited numerous “failures of financial obligations,” including to the security, electric, food service, transportation companies and to the landlords.
That evening, SLPS Superintendent Kelvin Adams proposed to take over administration of the charter, using the charter’s funds – not the school district’s. The district’s Special Administrative Board approved the resolution.
So what happened?
Cross said in 2008, Superintendent Albert Harold did not believe in using a computerized student information system. For the 2008-2009 school year, all student records were kept by pencil and paper, he said.
“We were handwriting everything for 550 kids in the middle and high schools,” Cross said. “It was a nightmare.”
At that time Missouri Baptist told the academy it had to make some serious changes. In September 2008, the university told the school board the only way it would continue to be a sponsor was if the school board was dissolved.
“We agreed because we had no other option,” Burroughs said.
The new board, formed in June 2009, had seven members. The president and treasurer, Tommy Davis and Michael Yarbrough, were appointed by the university. Two parents, one community member and two sorority members made up the rest of the board.
In an email to The American, Douglas Copeland, MBU’s attorney, said, “Only by moving forward with non-renewal and revocation in the past two years has the university been able to accomplish any change at all at the academy, including removal of the sorority from the governance structure.”
To take over financial management, on January 15, 2009 the board hired Navential Management Group, led by John Goldston, chief operating officer. At that point, now a minority on the board, the sorority had no financial control of the academy, Margaret Berry said.
In March 2009, the Missouri Department of Elementary and Secondary Education cut State funding to the academy and said it wouldn’t give it back until they had a clean financial audit, said Goldston.
“It was forensic work for the past three years done in one month,” Goldston said. “It demands a great number of people. You have to piece together things and have it in an auditable format.”
DESE officials, in an email to The American, said, “We have heard anecdotal reports of financial issues for some time, though we had no specific information. We did not know until the last few weeks that the school was approaching a financial crisis.”
After a few months of working with Navential, the sorority sisters became concerned with the way the company was running the books, Berry said. They said individual invoices were not itemized on the check stub for verification. Dates on invoices didn’t match up. And the charter holders stopped receiving financial reports.
Sharon Burroughs said she spent most of her time on the newly established board requesting for a budget and financial information in open sessions.
Goldston said he had heard from Burroughs recently.
“I explained that I submit financial statements every month to the board and to the university,” he said. He sends them digitally so they are time-stamped.
He said his responsibility is to the board treasurer, who then reports to the board. At several meetings, Goldston said he presented financial reports by request of the board.
“She was not receiving the type of information she wanted in a certain manner,” he said of Burroughs. “I was quick to accommodate. It’s unfortunate that it went a whole year with that frustration.”
Confusion across the board
Cross said he heard Goldston’s reports at the board, but he still felt confused.
Going into the 2009-2010 school year, Cross said the academy’s budget had $1.5 million in surplus. The university had given the school board and Superintendent Teferi a list of things to accomplish in order for the sponsorship to continue. That included a reading program for the elementary, middle and high schools, and that 90 percent of the teachers be certified.
For reasons that Cross still can’t understand, it didn’t happen, he said.
“Every time we asked the superintendent for money, the answer was, ‘We don’t have any,’” Cross said. “Everyone wondered how we could have financial problems.”
Goldston said in the 2009-2010 budget, the school population was over-projected by 85 percent.
“We began to point it out to the superintendent for revisions,” Goldston said. “That was a $3.1 million deduction in budget. We went from having a $1.5 million surplus to a $1.5 million deficit.”
The academy had a few restraints to meeting the population goals. Missouri Baptist did not confirm that it would continue its sponsorship until June 30, he said, so the school could not start recruiting until then. Also, poor record-keeping on student attendance contributed to the problem.
The predicament in which the academy found itself was a culmination of financial decisions made, not just by the board but by the various management companies, Goldston said.
One of the major blows was the academy’s leasing contracts for the current building and the former two buildings on Washington and Jefferson avenues.
This year, facility expenses took up 23 percent of the overall budget, which spells trouble, Goldston said. Twelve percent is about standard.
A typical public school district requires 85 percent of the budget for payroll, he said. That only leaves 15 percent for buses, food and facility costs. If the school has 23 percent in facility cost, the budget will not balance.
Goldston’s specialty is turning around schools in trouble. This means he comes in and leaves when things are stable. “But the academy stayed in crisis,” he said.
For his work from January 15, 2009 to March 31, 2010, Goldston’s invoices to the academy totaled $1,452,881.26 – nearly $1.5 million.
About $89,800 of that were reimbursed expenses when Navential wrote checks in a pinch to vendors or to the electric company when they threatened to turn off the lights.
About $668,000 went to school improvement initiatives, outlined by President Barack Obama’s Race to the Top plan.
At one point, he had 22 consultants working on the academy project. One of the sorority’s concerns was that Navential employees were on payroll, and their payments were not being monitored. Goldston said he issued 1099s through the ADP Payroll Services because the 1099s were not being issued.
“The emotions have been high,” he said. “It’s time for the facts now. There’s a lesson to be learned here. I believe in the mission of Ethel Hedgemen Lyle Academy. That does not change.”
Never happen again
Cross said he was sitting in an SLPS meeting about the school on April 29, and the students surrounding him were crying. Parents were scared and confused.
“I took this job because it was an excellent opportunity to give students a quality education,” Cross said.
Cross has ideas how to improve from here.
“There needs to be more oversight by the State,” he said. “They should have someone to check periodically, so you don’t have to go two years then close the school. The embarrassment and all that.”
He said he is confident that DESE’s leadership will not let this happen again.