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Florida charter school management company under federal scrutiny

TALLAHASSEE — The state's largest charter school management company has come under scrutiny from the U.S. Department of Education for potential conflicts of interests in its business practices, federal authorities have confirmed.

The Education Department's Inspector General Office is auditing the South Miami-based Academica Corp. as part of a broader examination of school management companies nationwide. The audit will be complete this summer, department spokeswoman Catherine Grant said.

A preliminary audit report obtained by the Times/Herald identified potential conflicts of interest between the for-profit company Academica and the Mater Academy charter schools it manages. One example the auditors cited was the transfer of money from Mater Academy to its private support organization, which shares the same board of directors.

When asked about the potential conflicts of interest raised in the report, Academica attorney Marcos Daniel Jiménez, in an email to the Times/Herald, touted the charter school network's academic record and commitment to its students.

Jiménez also said Academica had sent a response letter to the U.S. Department of Education correcting what he called "inaccuracies and false statements" contained in the preliminary report. But Academica declined the Times/Herald request to be provided the response, saying the Education Department considered the report and the response from Academica to be confidential.

The Education Department's findings come as the Florida Legislature considers a bill that could weaken school districts' ability to control business practices at new charter schools.

Under current law, school systems have the power to negotiate contracts with new charter schools. HB 7083 would mandate the use of a standardized contract, meaning school districts would give up most of their leverage.

Charter schools are funded by tax dollars, but run by nonprofit governing boards that function independently of local school boards. Some are managed by for-profit companies like Academica.

Academica oversees nearly 100 charter and virtual charter schools in Florida, according to its website. It also manages schools in Texas, Nevada, Utah, California and Washington, D.C.

The preliminary audit report hones in on the Mater Academy family of schools in Miami-Dade County.

Academica President Fernando Zulueta founded the original Mater Academy in 1998 and was a member of its governing board until September 2004.

The auditors found that three of the schools in the Mater network — Mater Academy, Mater High and Mater East — entered into leases with development companies tied to the Zulueta family. Two of the leases were executed while Zulueta sat on the Mater board.

In addition, Mater Academy hired an architectural firm from 2007 through 2012 that employs Fernando Zulueta's brother-in-law, state Rep. Erik Fresen, the report said.

"We identified four related-party transactions, two of which indicated, at a minimum, the appearance of conflicts of interest between Mater Academy and its CMO (charter-management company)," the auditors wrote.

Fresen declined to comment Friday.

The report also pointed to a potential conflict of interest between Mater Academy in Hialeah Gardens and its nonprofit support organization Mater Academy Foundation.

"Mater Academy shares the same board of directors with the foundation and based on our review of the board of directors meeting minutes at Mater Academy, there is evidence of Mater Academy's board of directors transferring public funds to the foundation," the auditors noted.

The Florida Consortium of Public Charter Schools declined to comment on the report Friday, saying it was not yet complete.

Charter school critics said the Inspector General's findings were a reason to push back on HB 7083, the bill that could weaken the power of school districts over new charter schools.

"Obviously, there are some serious questions about the way the system works in Florida," Miami-Dade School Board member Raquel Regalado said. "The prudent thing for the Legislature to do would be to wait for the federal government to finish its work (on the audit) and then consider changes to the charter school law."

Jeff Wright, of the Florida Education Association, agreed. "If an audit like this is going on, the Legislature should not give charter schools more opportunities to game the system," he said.

But Rep. Manny Diaz, the Hialeah Republican sponsoring the bill, said his proposal would not open the door to questionable business practices.

"This is not about opening up the Wild Wild West," said Diaz, who left his job with the Miami-Dade school district last year to become dean of an Academica-managed private college. "We want there to be controls (over charter schools). We just want to make sure the controls are uniform and transparent."

The bill, which would also require school systems to share underutilized facilities with charter schools, is scheduled to be heard on the House floor today. The Senate version (SB 1512) has been watered down, and now does little more than clarify that military commanders can help establish charter schools on their bases.

Contact Kathleen McGrory at kmcgrory@MiamiHerald.com.

Florida charter school management company under federal scrutiny 04/21/14 [Last modified: Sunday, April 20, 2014 4:16pm]

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