State auditor: Charter school bilked taxpayers out of $4.3 million

(From State Auditor Nicole Galloway)

Missouri State Auditor Nicole Galloway has identified a series of fraudulent and manipulative practices by the Kansas City-based Hope Academy Charter School administration. The State Auditor's Office was notified by the Missouri Department of Elementary and Secondary Education that Hope Academy's attendance data had been reported at levels above the state average for several years in a row, raising suspicions.

When auditors began to investigate, they uncovered a pattern of over-reporting student attendance. These inflated attendance records were reported to the Missouri Department of Elementary and Secondary Education, which led to overpayments to the school by approximately $4.3 million over the school's last two years in operation.

"Hope Academy was intended to serve as a second chance learning institution for students who were working to make a positive change in their lives," Auditor Galloway said. "Instead, due to the disorganization, manipulation and fraudulent practices by the academy's administration, this opportunity is no longer afforded to these students, and Missouri taxpayers have been defrauded out of millions of dollars that were intended to educate our students."

Auditor Galloway also reports students were receiving credit for classes they were not participating in, and for unapproved activities outside of the classroom. For example, the school issued classroom credit to students for activities such as grocery shopping, house cleaning and dog walking. These are not approved service learning activities by the state's education department and are therefore invalid toward high school graduation credit.

The school was in operation between 2009 and 2014, when its sponsorship by the University of Missouri- Kansas City was withdrawn. In April 2014 the Board of Directors voted in favor of closing the school when the 2013-2014 school year ended in June. State payments totaling $600,000 were withheld for the academy's last three months of operation in 2014. This leaves an outstanding liability to the state education department of $640,000 for the 2013-2014 school year and $3.1 million for the 2012-2013 school year, for a total outstanding liability to the state of approximately $3.74 million for the school's last two years in operation.

The audit, which received an overall performance rating of "poor," is online at auditor.mo.gov.