}

Tuesday, April 22, 2014

CHERRY-PICKED! Grand Traverse Academy Superintendent Kaye Mentley Comes Clean...Or Does She?

Steven Ingersoll is turning into a rotting albatross around the Grand Traverse Academy’s neck.

Ingersoll, the Academy’s co-founder, faces federal charges of conspiracy to commit bank fraud and tax violations, accusations that publicly surfaced about a month after the school severed ties with his education management company, Smart Schools Management, Inc.

The Grand Traverse Academy board members recently opted to switch to a new management group, Full Spectrum Management.

Full Spectrum Management is owned by Mark Noss, a Traverse City optometrist who owns Full Spectrum Eyecare and served as the board president of Grand Traverse Academy. He resigned as president last month and filed incorporation papers with the State of Michigan on March 19, the same day the Academy board announced it was hiring Noss's brand new firm.

And now along comes Kaye Mentley, with “an interview” —a lengthy question-and-answer document recently posted on the Academy's website, clearly designed to calm the rabble.
 

Does it work? 

Although Miss Fortune thinks "crisis communications" should be practiced by professionals, you be the judge!

CHERRY PICKING

Cherry picking is often described—outside the Grand Traverse region, of course—when only select evidence is presented in order to persuade an audience to accept a position, and evidence that would go against the position is withheld.

The stronger the withheld evidence, the more fallacious the argument.

In a recently posted “interview”, Grand Traverse Academy Superintendent Kaye Mentley attempts to address questions about the Academy and Steve Ingersoll—and, baby, the cherry pits are flying!

Miss Fortune examines key questions, and Mentley’s answers. (Miss Fortune’s comments are shown in red.)

An Interview with Kaye Mentley,
Grand Traverse Academy Superintendent 

INTRODUCTION:


Recently Dr. Steven Ingersoll, a Bay City, Michigan optometrist, and one of the founders of Grand Traverse Academy, was federally indicted, along with family members, alleging they conspired to commit bank fraud and tax evasion.

Although these charges do not involve Grand Traverse Academy (GTA), there has been speculation about our relationship with Dr. Ingersoll. Until we changed companies in March of 2014, his Smart Schools Management company provided services to GTA.  This affiliation began with our founding in 2000.


[Miss Fortune: Ingersoll splits his time between a home in Bay City and one in Traverse City. In addition, Ingersoll’s Smart Schools Management, Inc. shows his Traverse City home address as the corporation’s headquarters.]

Q:  There has been speculation that Dr. Ingersoll’s legal issues extend to GTA.  Is there any truth to that?

A:  Ever since the start of GTA we have complied with financial transparency requirements, the same as public schools.  To our knowledge, Dr. Ingersoll’s legal issues are personal. 


[Miss Fortune: Contrary to Mentley's assertions, Ingersoll’s legal issues do appear to extend to the Grand Traverse Academy. Among the “overt acts” contained in the federal indictment is an allegation that, on or about June 30, 2011, Ingersoll sought to use part of the Chemical Bank construction loan proceeds that had been diverted to his personal Fifth-Third Bank account to “reduce his indebtedness to the Grand Traverse Academy from advances Ingersoll had “made to himself from funds belonging to the Grand Traverse Academy.”

By adding an illogical reference to “financial transparency” compliance, Mentley conflates the two, unrelated issues. In fact, public school academy financial transparency is required by Michigan law.

In addition, if the allegations regarding the repayment by Ingersoll are proven, the Academy could be the subject of a fraud “clawback”. Fraud clawbacks occur when there is an attempt to retrieve, or “clawback” money that was attained through fraud.]

 
Q:  In addition to posting current GTA financials on the website for public transparency, what other oversight is in place?

A:  We have always regularly reported to Lake Superior State University, our chartering agency; the Traverse Bay Intermediate School District; and the Michigan State Department of Education.

[Miss Fortune: Again, Mentley appears to dodge the real question. By diverting attention from oversight to transparency, Mentley avoids addressing the “oversight” issue completely.

Mentley appears to misunderstand “transparency”, and claims that the Academy has “regularly reported” to its chartering university, the school district and the State of Michigan. That reporting is required by the Academy’s charter agreement with Lake Superior State and by the State of Michigan.

New transparency requirements, signed into law in 2012, require that schools have a variety of information readily available to taxpayers. It appears that the Grand Traverse Academy does not have a plan to comply with those new requirements.


Among transparency requirements for Michigan public school academies are these major areas. (The complete list, provided by the state’s Department of Education, can be found by clicking this link.)

Transparency Mitten
Personnel Expense Chart
Operations Expense Chart
Annual Operating Budget & Amendments
Current Collective Bargaining Agreement
Audit Report for Previous Year
Total Salary & Comp Plan for Superintendent
List of People Working at the School that Earn a Salary > $100K
District Dashboard/Report Card w/3 Years of Data
Final Budgets from Last 2 Years
Copies of Audit Management Letters from the Last 2 Years
Copy of Charter Contract
List of Board Members w/Officer Designations & Contact Information
Board Schedule, Agendas & Minutes for Current Year
Board Policies
Copies of Board Checkbook w/Invoices for Items Exceeding $10K
Quarterly Financial Statements
Copy of Management Contracts
Copies of Certificate of Occupancies
Copies of Boiler & Fire Safety Certificates
Enrollment Information & Advertising
Technology Plan
School Calendar
Parent & Student Handbook
Fire Safety, Emergency Notification & Lockdown Information
Food Service Details, Including Wellness Programs Applications,
Rates & Menus
Staff & Faculty Professional Development
Technology Protection Measure & Internet Safety Policy]

 
Q:  Is there any credibility to rumors that Dr. Ingersoll appropriated money from GTA illegally?

A:  We are not aware of any money illegally taken from the Academy, nor has our board ever approved a loan to Dr. Ingersoll or Smart Schools. Previous to the past year, the management fee was made as a pre-payment at the beginning of a new school year.  This practice was stopped during the past year when the school's new accountants indicated that it was inappropriate. The previous school accountant had continued this procedure on an annual basis. Because the budget was adjusted due to finances and the need to reduce the management fee in several years, the amounts paid in excess of the amended budget were then owed to GTA by Smart Schools. In view of the circumstances as of the beginning of GTA's last fiscal year, our board demanded repayment from Smart Schools for the balance due. GTA continues to pursue this repayment. No monies were ever advanced to Dr. Ingersoll personally. All management fees went to Smart Schools. 


[Miss Fortune: Mentley’s use of the word “illegally” is a red herring. 


And you'll notice that she said "no monies were ever advanced to Dr. Ingersoll personally" and not "no monies were ever advanced by Dr. Ingersoll personally"! “Smart Schools” IS Steven Ingersoll!

And Mentley’s response appears to contradict the Academy’s 2013 financial report, audited by the Traverse City public accounting firm Dennis, Gartland & Neirgarth.

The financial report, available on the Academy’s website, states that the Academy carried a “prepaid expense/expenditure balance” of $2,338.980 for payments made to Ingersoll’s Smart Schools Management, Inc. 


The report outlined the Academy’s solution: deduct the $2.3 million overcharge from Ingersoll’s projected management fees over three fiscal years.

Although Mentley claims that the board “demanded repayment from Smart Schools for the balance due”, she offers absolutely no proof.

Mentley appears to dodge any responsibility in allowing Ingersoll’s “prepaid expense” balance to balloon to over $2.3 million, instead throwing the Academy’s “previous school accountant” under the school bus,  claiming the firm “had continued this procedure on an annual basis”.

The facts as stated in the
Dennis, Gartland & Neirgarth 2013 audit appear to be much less cloudy: according to the audit, the Academy’s contract with Ingersoll’s Smart Schools Management set “a ceiling for the management fee” but it did not include an “objective measure to calculate the fee annually”.

The report also revealed that Ingersoll had a nearly unfettered ability to transfer funds between the Academy’s and his Smart Schools Management bank accounts. Smart Schools Management took “cash advances for their management fee each year on the budgeted figure “without futher Board action”. 

The report claims that the net effect of Ingersoll’s ability to “prepay” his own fees and “withhold payment of overpaid fees enabled Smart Schools to “abuse their access to public funds”.

In the 2013 report, Smart Schools admitted that it owed the Academy $2.3 million in overpayments, but denied “abusing” public funds.


So, to recap, although it appears that while Ingersoll had indeed racked up a balance of over $2.3 million in management fee overcharges, the Academy’s solution was to simply pay him hundreds of thousands less each year—over a three year period!

No, they didn’t kick him to the curb after discovering that millions of taxpayer dollars had gone into Ingersoll’s maw.

According to the audit, the prepaid expense overcharge was supposed to be “received” from Ingersoll as follows:


2014 $774,00
2015 $960,000
2016 $604,980

And Ingersoll kept his contract…for a while, anyway!

Miss Fortune would love to see evidence of the Academy’s “pursuit” of millions of taxpayer dollars that disappeared into Ingersoll’s sticky pockets—real evidence!]


Q:  Full Spectrum Management is the educational services provider that is providing management of GTA since March 2014.  What is their background?

A:  Full Spectrum Management is owned by Dr. Mark Noss, a Traverse City optometrist who also owns Full Spectrum Eyecare. 


[Miss Fortune: Ah, yes! Mark Noss and Steve Ingersoll—the Chang and Eng of the Grand Traverse Academy.

As Miss Fortune recently reported, Noss and Ingersoll teamed up in 2005 to form the Excel Institute, a multi-disciplinary collaborative effort with psychologist Patricia Engler and Battle Creek optometrist Bruce Christensen. Ingersoll and Noss were classmates at Ferris State’s College of Optometry, graduating in 1980.

And with nearly 1,200 students, the Grand Traverse Academy was a fertile hunting ground for clients for the Excel Institute's "education remediation programs".


Formed in on January 18, 2005, the company was registered on behalf of Ingersoll by attorney Doug Bishop. If you've been paying attention, you'll remember that Bishop is the Grand Traverse Academy's attorney and "media contact"—yes, the one who recently got his boxers in a bunch about “transparency” and said “F**ck ‘em” in an email, referring to the Traverse City Record-Eagle.

Classy, that one!]

Q:  What prompted the board's decision to retain Full Spectrum?

A:  Dr. Noss was a long time trustee of GTA.  Most recently he was board president, a position he resigned when starting the charter school management company.  When our contract with Smart Schools was terminated, we did not have the luxury of time to research a new company.  He was familiar with our school, had been involved with our mission from the beginning, and was able to
provide a smooth transition to a new management company.

[Miss Fortune:Kaye Mentley appears to admit that the wily Mr. Ingersoll got the drop on the Academy, forcing them to ditch him quick and make the switch under cover of near darkness.

But Mentley's comment also reveals that the Academy and its board likely did not fulfill the “due diligence” requirement contractually obligated by its chartering agreement with Lake Superior State University.

The charter contract requires that the Academy board perform, among
education service provide-related other activities, “sufficient due diligence” to establish that an education service provider (ESP) has the “appropriate financial resources, educational services, and managerial experience to provide the contracted services”.

In addition, the contract states that the Academy board "only approve an ESP agreement with a formal vote at a public meeting". The chartering agreement requires the Academy to retain "independent legal counsel" to review and advise on the negotiation of the ESP agreement. (Legal counsel for the Academy—Doug Bishopmust not represent either party.)

Mentley admits that when the Academy’s “contract with Smart Schools was terminated, we did not have the luxury of time to research a new company.” And she may not have had time to share the new agreement with Lake Superior's Nick "we don’t get involved with the operation of the management company" Oshelski.

Translating Mentley’s summary, here’s the real rundown on the due diligence conducted: Mark Noss is no loose cannon, he knows the status quo, he’s known Ingersoll for years, and—best of all—he won’t make waves.

In other words, I just looked to my left, and there he was!
 

If you suspect people are only telling you a half-truth, don’t be afraid to ask, “Is there anything you are not telling me?”

It will be interesting to hear what Mike Flanagan, the Superintendent of Public Instruction in Michigan's Department of Education, thinks about this fiasco!

And when he responds, Miss Fortune will be the first to bring you the story!

Monday, April 21, 2014

BREAKING UP IS HARD TO DO: Ties Still Bind Steve Ingersoll's Smart Schools Management To Grand Traverse Academy

Although Kaye Mentley, Superintendent/Principal of the Grand Traverse Academy, has stated publicly that the Academy dropped Steve Ingersoll and his Smart Schools Management, Inc. last month prior to Ingersoll's April 9 federal indictment, Miss Fortune has discovered there are notable exceptions.


QUALITY DAY CARE

Kaye Mentley's carefully vetted statements explaining that the Academy "dropped the management company last month and now is being operated by Full Spectrum Management" appear to have omitted significant details.

On its before/after school quality care page, the Grand Traverse Academy explains that "Quality Care is a privately run daycare, licensed by the State of Michigan, which utilizes the philosophy and practices of Grand Traverse Academy."

And while Quality Care is licensed by the State of Michigan, it's "privately run" by Steve Ingersoll's Smart Schools Management, Inc. (An thorough examination of the license history reveals it's current, with no violations.)



CLEAN UP IN AISLE 3!

In addition, GTAS, LLC (another Ingersoll-controlled corporation) has provided  the Academy with "janitorial services" during the last fiscal year, receiving payments totaling nearly $250,000.

And finally, because the teaching staff is employed by Smart Schools and leased to the Academy, it's unlikely that relationship has been completely "unwound".

Coming tomorrow, I review and respond to Kaye Mentley's recent post:

Saturday, April 19, 2014

Friday, April 18, 2014

TALKING OUT OF SCHOOL: Another Exclusive Grand Traverse Academy "Communi-Kaye"!

EXCLUSIVE!!

Miss Fortune has received another 'Communi-Kaye', sent on April 11 to the Grand Traverse Academy staff by its Superintendent, Kaye Mentley. 



Leaked anonymously and exclusively to Miss Fortune by one of my many readers, it's another stellar example of damage control.

Or is it?  

You be the judge. (The image was redacted by Miss Fortune, but only to remove Mentley's personal cell phone number.)

Here's the watermarked image:


You'll note that Mentley mentions "inaccurate information in today's article in the Record-Eagle" castigating the Traverse City newspaper for incorrectly reporting on the Academy's MEAP scores.

DOES MACY'S TELL GIMBELS? AND DOES BRAD TELL KAYE?


Gimbels, a company founded by a German Jewish immigrant, Adam Gimbel, opened a branch in New York City in 1910, which soon became the primary rival to the leading Herald Square retailer, Macy’s.

This rivalry entered into the popular argot: “Does Macy’s tell Gimbels?”.

The saying, meaning "does one rival business share its secrets with another?",  was first made popular in the 1930s. 

Well, Macy's may not have told Gimbels, and it looks like Brad hasn't told Kaye, either.

Quoted in the April 11 Record-Eagle article is the Grand Traverse Academy's new Board President, Brad Habermehl, explaining that "declining MEAP scores" prompted the school's board to sever ties with Steve Ingersoll's Smart Schools Management, Inc.

OK, Kaye! 

Looks to Miss Fortune like somebody needs to stay after school for an intensive course of "integrated visual learning"! 

(Maybe her self-appointed halo is just too tight.)

Thursday, April 17, 2014

GRAND TRAVERSE ACADEMY BOARD INSIDER RIDES THE GRAVY TRAIN: Next Stop Reformville?



MEET THE NEW NOSS...(ALMOST) THE SAME AS THE OLD BOSS! 
In the first installment in a new series, Miss Fortune examines insider deals and potential conflicts of interest at the Grand Traverse Academy.

The seat Traverse City optometrist Mark Noss used in his role as President of the Grand Traverse Academy's Board of Directors had barely cooled before he began heating up a new perch—as head of the Academy's new education service provider, Full Spectrum Management, LLC.   

Full Spectrum came kicking and screaming into the world on March 19 at 4:31pm when Traverse City attorney David Rowe faxed its incorporation paperwork to Lansing. 

Coincidentally, the Academy made its selection of Noss's brand new firm—newly-hatched, with no direct experienceofficial on the very same day.  

The Academy's Board of Directors passed a resolution on May 12, 2012 establishing a management fee cap of 12 percent of revenue, and the contract with Ingersoll's Smart Schools Management, Inc. stated that the management fee should “not exceed $2,000,000 in any fiscal year.”  While the details of the Academy's agreement with Noss have not been made public, it's likely that his shiny new firm could expect to receive major bankmillions of taxpayer money over the next school year.

Grand Traverse Academy co-founder Steven Ingersoll faces federal charges of conspiracy to commit bank fraud and tax violations, accusations that publicly surfaced about a month after the school severed ties with his management company.

The Traverse City Record-Eagle has reported that Doug Bishop, the attorney for Grand Traverse Academy, said Ingersoll suggested the school switch management companies

"I don't know exactly, but I think he probably thought his situation might be a distraction," Bishop said.

And while Noss has yet to be spotted prowling the streets of Traverse City in a vintage Alpine White Cadillac Eldorado, he appears to have benefited personally and professionally from his association with the Grand Traverse Academy—and Steven Ingersoll.

SCHOOL DAZE...VISION OR MIRAGE?

Ingersoll and Noss both graduated from Ferris State College - College Of Optometry in 1980.

But it wasn't until Ingersoll and Noss teamed up to form the Excel Institute, a multi-disciplinary collaborative effort with psychologist Patricia Engler and Battle Creek optometrist Bruce Christensen, that the duo's private "vision therapy" business really took off. 

And with nearly 1,200 students, the Grand Traverse Academy was a fertile hunting ground for clients for the Excel Institute's "education remediation programs".

Formed in Michigan on January 18, 2005, the company was registered on behalf of Ingersoll by attorney Doug Bishop. If you've been paying attention, you'll remember that Bishop is the Grand Traverse Academy's attorney and "media contact".

The Traverse City Record-Eagle revealed today that Bishop, a Trustee at Traverse City's Northern Michigan College (NMC), stated in an email to William Myers, the NMC board’s vice chair his opposition to recording the board's meetings:
 “As always I am against video taping but will support the majority of the board. If we were to implement a video recording policy of our regular meetings, in our primary meeting spot (which is what TCAPS does), put them on line for a short time and then archive them for the current year, we would have met every legitimate concern. If the (Record-Eagle) didn’t think that was sufficient I would have a hard time not saying publicly “F --- em” (“That’s a joke Tim”).”

(Bishop reportedly spelled out the obscenity in his email...sounds like the good barrister just earned a new nickname!)

CAN'T YOU SEE LITTLE JOHNNY NEEDS GLASSES? AND TUTORING?

A parent whose child attended the Grand Traverse Academy (and asked not to be identified) shared the child's experience exclusively with Miss Fortune. The parents were told their child "needed eye care", and eventually took the child to Dr. Noss for examination. The proposed education benefits never materialized and, when pressed, the parent stated  the Academy eventually admitted its error.

In addition, the parents claim that when the child's glasses were examined by another local optical company, they were told that the glasses had virtually "no effect" for poor vision and were so fragile that breakage was inevitable.

FULL SPECTRUM, INDEED! EXCEL INSTITUTE, ICON LEARNING JOIN FORCES 
 
Noss/Excel office
In February, 2011, the Excel Institute and icon Learning (an Excel  subsidiary) moved into the building housing Noss's optometry practice, Full Spectrum Eyecare, on Munson Avenue in Traverse City.

icon Learning is described by Noss as "a tutoring method developed around the concept that students who may be struggling with academics may not have learning disorders. Many have simply developed incorrect learning habits that affect the way lesson content is perceived and absorbed."

And guess what, parents? icon Learning specializes in providing "visual learning" services for students from 3rd to 12th grade...the same grade range as the Grand Traverse Academy!

As recently as November 2013 (while still President of the Grand Traverse Academy Board), Noss held an "open house" in his role as the a Developmental Optometrist and Director of the Excel Institute. The event was pitched to parents as an opportunity to learn how "Integrated Visual Learning may help children struggling in school". The Excel Institute, LLC also has offices in Grayling and Alpena, both locations operated under the direction of Noss's Full Spectrum Eyecare.

Although Noss and Ingersoll both regularly use the term  "Developmental Optometrist" to imply that professional certification, neither is board-certified in vision therapy by the College of Optometrists in Vision Development.  
  
FROM TRANSPARENCY TO OPACITY: HOW PUBLIC MONEY BECOMES PRIVATE...

A for-profit company paid by a charter school, even a company that operates most of the school, does not have to disclose spending details or how much profit it makes. 

Board members can often easily justify insider transactions because they know the board member and often trust the person. But the board needs to look at the transaction from the public's perspective, realizing that the purchase (or access) can plant seeds of doubt in people's minds.

Michigan’s updated charter school law, which went into effect on March 28, 2012, eliminates the cap on charter schools while adding accountability measures for the schools and the education management organizations (EMOs) they contract with. One completely new section deals with the management agreements charter schools enter into with their EMOs, requiring annual reporting, public disclosure, and ensuring no conflicts of interest between the charter school’s non-profit board of directors and the for-profit EMO. 

Still, these accountability measures have yet to be implemented and tested. 

NEXT STOP REFORMVILLE? NOT LIKELY!

With Steve Ingersoll as a precedent—for example, GTAS, LLC, one of Ingersoll's entities, billed the Grand Traverse Academy nearly $250,000 in 2013 for "custodial services—and a board stacked with cronies, it's unlikely that the Academy will institute any new financial restrictions on Noss.

Remember, that same bunch let Ingersoll get away with nearly $2.5 million in prepaid management fees the Academy "couldn't afford" before they woke up and smelled the Starbucks...money that likely will not be coming back.

If anyone spots an Arctic White Cadillac Eldorado cruising the streets of Traverse City, drop Miss Fortune a line.

Wednesday, April 16, 2014

KARI SONOVICH ASSERTS 5th, 6th AMENDMENT RIGHTS:Could "Let's-Make-A-Plea-Deal Land" Be The Next Stop On This Justice Train?

California resident Kari Sonovich, arrested on February 6 on three counts of mail fraud, has officially asserted her 5th and 6th amendment rights. 

In a document filed in United States District Court's Eastern District of California on the day of her arrest, but just made public last week, Sonovich officially asserted her rights to "remain silent and have counsel present at any and all interactions with the government of the United States" or law enforcement officers.

According to allegations detailed in the January 30 indictment (unsealed after her February 6 arrest), between July 2008 and April 2009, Sonovich recruited investors to invest with her Las Vegas company, B&B Consulting Group LLC, by telling them she could place their funds with an international trader who operated at an extremely high level, promising returns of up to 500 percent every 90 days.

When investors deposited funds with her, Sonovich kept some or all of the funds for herself. The indictment alleges that Sonovich received more than $3 million from investors. To date, no investor has received the promised returns, and in most or all instances, no investor has received any of their initial investment back.


The Sixth Amendment right to counsel was initially intended to make sure that defendants could have an attorney when they went to trial. In fact, the relevant language in the Sixth Amendment simply states, “In all criminal prosecutions, the accused shall enjoy the right . . . to have the Assistance of Counsel for his defense.”

Over the years, however, the United States Supreme Court expanded this right to cover certain “critical” confrontations between suspects and officers or prosecutors. 


As the Court explained in its United States v. Ash (1973) decision:

This extension of the right to counsel to events before trial has resulted from changing patterns of criminal procedure and investigation that have tended to generate pretrial events that . . . might well settle the accused’s fate and reduce the trial itself to a mere formality.

Critical pretrial events consist of, (1) police interrogations, (2) questioning by police agents, (3) lineups, (4) consent searches, and (5) plea negotiations.
 

Hmm? A plea negotiation might be just the thing—Miss Fortune hears this songbird might be getting ready to "sing"!

Tuesday, April 15, 2014

MY BEAUTIFUL BALLOON (PAYMENT): Bay City Academy Facing $800,000 Chemical Bank April Balloon Payment; Is Debt Related To Ingersoll's Federal Financial Fiasco?

Earlier this morning, Miss Fortune sent an email to the members of the Bay City Academy's Board seeking information on an $800,000 balloon payment due this month to Chemical Bank.



The Academy's board currently includes:

President: Craig Johnston (Milford, MI resident; furniture  wholesaler)

Secretary: Dennis J. Griffith (formerly the "founding optician" at Ingersoll's shuttered optical business, iSpecs. Currently runs Alpine Optical in Greenville, MI)


Treasurer: Arlene Harris-Bush (Bay City realtor)

Trustee: Dr. Ronald S. Spalter (Troy, MI optometrist)

Charter school board members are public officials that have sworn a constitutional oath of office here in Michigan.

Let's see if any one of these "public officials" respond to Miss Fortune's questions.