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Stringer: Success Academy stiffed city

Comptroller Scott Stringer released an audit on Success Academy Charter Schools this week. Success runs many schools throughout the city, including one co-located in PS 241 in Harlem.
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Success Academy Charter Schools billed the Department of Education for special education services that may not have been delivered, an audit released by city Comptroller Scott Stringer found.

Stringer’s audit additionally found that Success Academy was inconsistent in the financial statements submitted to its authorizer in fiscal year 2015, leading to a situation where the organization looked like it was spending more funds directly on students than it actually was.

“We found situations in which Success Academy was violating its own standards, or those of oversight agencies. We hope Success Academy will embrace our recommendations and adjust its practices,” Stringer said in a statement following the release of the audit. “This isn’t about district vs. charter schools—it’s about protecting taxpayer dollars.”

The scope of the audit spanned fiscal years 2013 through 2015. The audit included a broader analysis of Success Academy’s finances, along with a detailed examination of a particular school, Success Academy Harlem 3. Success Academy was founded by CEO Eva Moskowitz in 2006. It currently operates 34 public schools throughout New York City, 15 of which are in Queens.

Stringer said Success Academy Charter Schools partners in a “management agreement” with a legally separate entity known as the Success Academy Network, which received a fee of $18.3 million in fiscal year 2015 to “manage” the schools. Stringer found Success Academy paid the network an extra $624,342 in returns for services that were supposed to be paid for in the original fee.

Stringer also said the organization was inconsistent in reporting its finances from year to year, and as a result, Success Academy should have reported that 81 percent of its spending in fiscal year 2015 went directly towards educating students rather than the 92 percent figure it touted. The audit also concluded that Success Academy billed the DOE for more than $50,000 in special education services that may not have been delivered.

Success Academy blasted the audit in a statement.

“The comptroller’s office spent two years preparing this report but couldn’t unearth anything of substance,” the statement said. “To prevent Success from disproving its claims and correcting its misunderstandings, which would have been simple, Mr. Stringer ambushed us—providing less than three days to respond. We believe deeply in accountability, which is why we’re so troubled by this political grandstand­ing.”

Stringer’s account directly contradicted Success Academy’s accusation of an ambush, saying that the charter school operator received a draft version of the report on Nov. 23 — 27 days before the audit’s release — and that Success officials declined to meet with the comptroller’s office to discuss the findings on Nov. 28, 29 or 30. Stringer’s office said it sent another copy of the draft report to Success Academy Dec. 2, requesting a response by Dec. 16. According to the comptroller’s office, Success sent back written comments on that date, along with 982 pages of additional documents.

But Success Academy’s 26-page response to the audit’s release accused Stringer’s office of gaming the response process to exaggerate the amount of time it gave the charter school operator to respond to the findings, pointing out that it received the draft the day before Thanksgiving and the comptroller insisted on holding the exit conference no later than the following Wednesday, which left only two business days to prepare.

“Incredibly, however, the comptroller claimed that this afforded Success Academy ample time to prepare because the Exit Conference would be a ‘full week’ after the issuance of the Preliminary Draft Report,” the response said, “although this ‘full week’ included the Thanksgiving holidays.”

Stringer’s report also said the substance of its findings were discussed with Success Academy officials throughout the audit process before its completion Nov. 14.

The audit report made 28 recommendations. Stringer’s office said Success Academy did not respond to any of them.

Reach reporter Patrick Donachie by e-mail at pdonachie@cnglocal.com or by phone at (718) 260–4573.

Posted 12:00 am, December 22, 2016
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