Some insights from a recent auditor’s report. I think I am reading this correctly.
Imagine Schools Inc. has been justifiably criticized for paying a subsidiary more money in rent than it does for its teaching staff and producing poor results. The national benchmark for rent is 15% according to an article in the Columbus Dispatch.
A recent audit of Ohio Connections Academy shows that teaching and administration total $5,268,575. Overhead totals $6,003,793. 113% more than the money for teaching salary and benefits. Overhead is undefined. This money flows out of the state to a Maryland management company, Connections Learning, who does with it as they wish. There is little in bricks and mortar expense. Compare that to 15% rent benchmark.
The management company can recycle the same software year after year. They can sell essentially the same software to multiple states. The transfer and accounting of the overhead expense insures that the non-profit altruistic E-school never will show a profit. Useful to show why they cannot pay teachers more or to elicit sympathy from parents or politicians. They are the underdog.
Yet it is a very profitable business for the management company. Connections Learning, K-12 and others are aggressively expanding in every state possible. Underdog status also justifies the need for more money and more students. See page 20 on the attached link.
What are the latest state report card results for this E-school? 1 C, 2 D’s and 5 F’s. A .375 GPA. It would be nice if they could move the decimal point.
To help manage the multimillion dollar budget they hired a part-time treasurer who is under indictment for her role as treasurer with Cincinnati College Preparatory Academy. I guess there is no need for an on-site full time treasurer.
The audit also shows unresolved title money issues totaling $668,642 (see page 46). When will this be resolved? To paraphrase a politician, pretty soon we are talking real money. At best it shows that they are sloppy with their record keeping. At worst is suggests that they are playing with the allocations to put more of scarce title money in their pockets at the expense of taxpayers.
There is an obvious problem. Look at the proliferation of E-schools in Ohio. Who benefits?
What is needed? Transparency, strong boards (which are not lead around by the nose by the management company), and oversight. These characteristics exist in the vast majority of our public school districts. Oh by the way, results would be good too.
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