GREAT Academy apparently used public funds to pay for additional contracts and bonuses paid to the school’s couple founders, according to a special audit released earlier this month.
Jasper and Keisha Matthews, founders of a state charter school in San Mateo, were already on the school’s payroll as top administrators.
The foundation’s use of funds exposes loopholes “similar to shell companies moving funds in questionable legal ways” that only state legislators can close, says state auditor Brian Colon. says.
“When the public invests money, it expects a certain amount of deliverables,” Colón said in an interview. “The public cannot count on those deliverables to be fulfilled because there are no oversights when funds are transferred to the Foundation.”
The audit was initiated by the chairman of the State Board of Education, the body that oversees the state’s charter schools, in writing to the state’s Office of the Auditor, raising concerns about the misuse of public funds and potential conflicts of interest in schools and foundations. was started after outlining the
In an email, Jasper Matthews told the journal that he and Keisha were “unable to conduct an interview,” and referenced the journal about management’s responses included in the audit.
In these responses, school management noted that the audit did not detail specific violations of government action and charter school conduct, nor did it acknowledge any existing conflict of interest issues.
Still, the school and foundation are addressing possible issues, stating that “academy employees are not employed or contracted by the foundation.”
The audit has not been referred to the state attorney general’s office, Colon said.
“This is an important point,” he said. “What we have identified are systemic gaps in accountability and oversight, and the only places that can be fixed are at the legislative and administrative levels.”
He points to at least one bill from 2013, which failed to get final approval, to add more oversight, such as conflict of interest disclosures, and to implement a more standardized leasing system. pointed out that it would.
“I am asking Congress to introduce legislation to increase oversight related to leases from foundations and charter schools with foundations,” he said.
An audit found that between July 1, 2016 and the end of January of this year, the foundations of the schools that own the school buildings received approximately $2.3 million. Almost 100% of that comes from the school itself, which has around 127 students.
At the same time, an audit found that the foundation had spent about $1.9 million.
This included approximately $1.26 million in monthly rent, additional rent and maintenance fees paid by the school, and $1 million in “upfront” rent. An audit found that his one payment of $250,000 out of his $1 million was not a written requirement under the lease agreement.
However, during the same period, the foundation paid just under $500,000 for the building’s mortgage. By 2027, when the mortgage contract expires, the foundation will pay out nearly $1.6 million.
During the approximately five-and-a-half-year audit period, the Foundation spent more than $453,600 on professional services, of which more than $223,000 was spent on individual contracts. Three of these contracts were passed on to school administrators already included in the school’s salary. An additional approximately $31,000 went towards retention bonuses.
Jasper and Keisha Matthews serve as the school’s Executive Director and Academic Director, although the largest contract and largest bonus was just over half of the $453,600 spent on professional services.
“They are being double-compensated in situations where their duties, responsibilities and objectives are not clearly defined by the foundation,” Colon said. “That’s the problem.”
The Audit found no conflicts of interest in connection with the approval of Jasper Matthews’ contract in that he, as the school’s executive director, has authority over the school’s business support employees and the student dean. pointed out the possibility.
They were also part of the Foundation’s expense review and approval process, and auditors may have felt pressure to approve both Matthews contracts to protect themselves from potential retaliation. said.
In a written response to the audit, school administrators stated that the student dean (a specific role in the cost process was the president of the foundation board) had only done the job for a little over two years and all actions full board. Support personnel at the business “did not have the authority to approve such refunds nor did they take any action to approve them,” they said.
The Great Academy, especially Jasper and Keisha Matthews, was criticized in 2017 by the State Comptroller for unusually high salaries. At the time, this salary was the highest for a charter school leader in the state, and together represented about 30% of the school’s salary. budget.
Special Investigation Director Sean Beck said the current report was referred to the Legislative and Finance Committee, state boards of public education and the Department of Public Education, which imposed several financial conditions on charter contracts beginning this year. said there is.
These include segregating funds the Foundation receives from the school from funds it raises in the private sector, and holding the Foundation to use funds from the school for building costs, maintenance costs, mortgage payments, etc. It is included. A new memorandum of understanding between the school and the foundation.
School employees also cannot be members of the Foundation Board, nor are foundations permitted to pay bonuses to school staff with state funds. You can pay for services, but they must be paid primarily by the school itself.
After saying that’s fine, Colón added that it wouldn’t solve a bigger problem.
“As a result of the audit, changes were made,” he said. “But that doesn’t change my concerns about the systemic problems that exist under the New Mexico Charter and the Foundation’s relationship.”