}

Saturday, August 26, 2017

EDIFICE WRECKED? Bay City Academy Board To Vote On Enhanced Deficit Reduction Plan During Its August 29 Meeting; Crumbling Financials Now Under Supervision Of Michigan Treasury

BREAKING NEWS The Bay City Academy has been placed under financial oversight by the Michigan Treasury Department, and the stumbling charter school's board of directors will vote on an “enhanced deficit elimination plan” during a board meeting next week.

During the meeting, scheduled for Tuesday, August 29 at 5:30 p.m. in the school's remaining Bay City location (Farragut campus at 301 Farragut Street), the board will address the failure of its original five-year plan to eliminate a $1.3 million deficit.

The projected year-end deficit (for the fiscal year ending June 30, 2017) remains virtually unchanged after two years at $1,366,699—down by less than $8,000 after nearly $7.0 million taxpayer dollars were poured into the school by the State of Michigan and the federal government. 

Back on February 8, 2016, I raised this question about Steven Ingersoll’s Bay City Academy: why should Michigan taxpayers pour $16.5 million more dollars, beginning July 2016 and continuing through June 2020, into this rat hole of fraud? 

After dodging a massive $1.3 million-dollar budget hole for months, the faltering charter school’s board finally approved a five-year deficit elimination plan on January 21, 2016. And while the school’s original five-year plan was described by its board president Craig Johnston, a boyhood friend and longtime business associate of convicted felon Ingersoll, as “not unsurmountable by a long shot”, that five-year term was not a given—except as Steven Ingersoll’s maximum federal sentence. 

According to the Michigan Department of Education's September 7, 2016 “Quarterly Report to the Legislature on Deficit Districts”, issued by Superintendent Brian Whiston, the Bay City Academy was identified as a district that would end the year with a reduced deficit. However, that designation was prepared with data as of August 30, 2016, and the MDE's June 14, 2017 Quarterly Report revealed the Bay City Academy's deficit grew by $211,243 from the June 2016 to June 2017. 

Based on $3,015,076 projected FYE June 30, 2017 revenue, the Bay City Academy's -$1,366,699 deficit represents 45.33% of that revenue

The Bay City Academy and its management company, Mitten Educational Management, was called on the carpet in late 2015 by MDE State Superintendent Brian J. Whiston after neglecting to proactively report its ominous financial straits as required, belatedly reacting only after the MDE interceded and ordered the charter school to file a formal deficit elimination plan. 

From Section 1220 of Michigan's Revised School Code: 

“If, based upon information included in a periodic financial status report required under section 1219, a deficit elimination plan required under this section, or a request by the superintendent of public instruction, the state treasurer determines that a school district, intermediate school district, or public school academy is subject to rapidly deteriorating financial circumstances, persistently declining enrollment, or other indicators of financial stress likely to result in recurring operating deficits or recurring financial stress within the school district, intermediate school district, or public school academy, the state treasurer may require the school district, intermediate school district, or public school academy to submit an enhanced deficit elimination plan in the form and manner determined by the department of treasury. If the deficit for a school district, intermediate school district, or public school academy that is subject to a deficit elimination plan has not been completely eliminated within 5 years after it submitted its initial deficit elimination plan, the state treasurer shall require the school district, intermediate school district, or public school academy to submit an enhanced deficit elimination plan under this subsection. An enhanced deficit elimination plan shall provide for the resolution of the deteriorating financial circumstances, persistently declining enrollment, or other indicators of recurring operating deficits or recurring financial stress and is subject to approval by the state treasurer. As a condition of approving the enhanced deficit elimination plan, the state treasurer may require a school district, intermediate school district, or public school academy required to submit an enhanced deficit elimination plan under this section to enter into a financial recovery agreement with the state treasurer.”

1 comment:

  1. Ridiculous that the state is letting this happen. Close the damn school down and get those kids back into the state run public school not these money laundering shams.

    ReplyDelete