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Wednesday, May 21, 2014

BREAKING NEWS: Michigan Attorney General's Office Investigating Grand Traverse Academy's Missing Millions

EXCLUSIVE: Michigan Department of Education official confirms Academy subject of "an ongoing investigation".

Miss Fortune received confirmation yesterday that the office of Michigan Attorney General Bill Schuette is conducting an "ongoing investigation" into the alleged misappropriation of federal and state money from the Grand Traverse Academy by Steven Ingersoll's Smart Schools Management, Inc.

The investigation was confirmed in an email from Michigan Department of Education spokesman, Bill DeSessa, who was responding to my inquiry seeking to determine if the Academy filed a "report on finding of suspected fraud and/or embezzlement" relating to its June 2013 audit of financial statements.

As previously reported on this blog, the Academy's 2013 financial audit revealed that the Academy was carrying a whopping “prepaid expense/expenditure balance” of $2,338,980 for overpayments made to Ingersoll's Smart Schools Management, Inc.

In the auditor’s report, Smart Schools Management agreed that it “owed Grand Traverse Academy an amount classified as a prepaid balance” ($2,338,980), and worked out a repayment plan with the Academy. The plan called for Smart Schools Management to "work off" the prepayment by “partially reducing cash transfers for future management fees through June 2016”.

When reached for comment late yesterday afternoon, Joy Yearout, a spokeswoman for Attorney General Schuette declined to comment, stating that the Attorney General's office "can neither confirm nor deny the existence or nonexistence of a pending investigation".

Based on the information I've already revealed on this blog, it's likely that any investigation would include related-party transactions between Ingersoll's for-profit management company and the Academy, conflicts of interests that may have impeded financial oversight by the Academy's board of directors (current and former) and an in-depth forensic accounting of bank transfers.

More information on this breaking news as it becomes available.

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