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Wednesday, March 23, 2016


Part 2 of Miss Fortune's exclusive Kaye Mentley testimony series: a coming funding collapse and Kaye's quarter-million dollar payday! 

The Grand Traverse Academy’s former top administrator (Kaye Mentley) and current management company head (Mark Noss) knew about unethical and potentially illegal financial practices at the Traverse City charter school in May 2013, at least a year before its former manager Steven Ingersoll was indicted by the federal government — and never reported it to the State of Michigan's Department of Education, the Michigan Attorney General, the FBI or the IRS.

Chew on that with your morning bagel as you read the January 7, 2016 testimony of Kaye Mentley, exclusively brought to you by Miss Fortune:

THE COURT: Record will reflect the fact that it's about 10 minutes after nine. I took the opportunity to spend about a half hour with counsel to get an understanding for the use of our time today, and ultimately the -- getting an understanding for the witnesses that we would be hearing to reach a conclusion. It was a good use of time. We are ready to proceed. Witness, please. 

MS. PARKER: Your Honor, the Government calls Kaye Mentley. 

THE COURT: Record will reflect the fact that there has been -- will be an objection rendered by Dr. Ingersoll by counsel. If you'd like to at least get your record on that point. 

MR. GEHT: Thank you, Your Honor. The defense objects to Ms. Mentley being called as a rebuttal witness as she had not been previously identified as a rebuttal witness in any -- in response to any of the Court's orders or Court's questions in earlier proceedings. We understand our objection has been overruled. Also because we did not get notice of her testimony, we may not be fully prepared to cross-examine her today and will indicate to the Court at the close of her direct whether or not we will seek to have her be available at the next hearing session. 

THE COURT: That summarize the attention that we've given to the issue. I'm aware of the fact that -- and have reviewed her affidavit. I do believe that her testimony would be helpful, including her cross-examination. If we need to separate it, we will.  Ms. Parker, your witness. 

MS. PARKER: Thank you, Your Honor. 

[NOTE: Mentley is sworn in at 9:14 a.m. as a government witness, under direct examination by Assistant U. S. Attorney Janet Parker.]

Q. All right. Would you state your name and spell your first and your last name for the court reporter, please. 

A. Kaye Mentley, K-A-Y-E, M-E-N-T-L-E-Y. 

Q. And you were subpoenaed to testify here? 

A. Yes. 

Q. Could you tell the Court what your educational background is. 

A. I've been a teacher and a school administrator for 37 years. I have a bachelor's degree in elementary education, a master's degree in gifted education and about 60 graduate hours in administration. 

Q. And could you tell us what your work experience is. 

A. From the beginning or just -- 

Q. Yes. 

A. Okay. I started -- 

Q. Briefly, I don't need a day-by-day description. 

A. All right. I started as a teacher in Vestaburg, Michigan and from there was an administrator for gifted education for an ISD. From there I was a principal in Alma, Michigan and a director of gifted. From there I was an elementary principal in Wyoming, Michigan and then at another school in Wyoming, Michigan, and then I helped to establish the Grand Traverse Academy. 

Q. And when did you become involved with the Grand Traverse Academy? 

A. I was hired, I believe, in June of 1999. 

Q. And when did the Grand Traverse Academy open its doors to students? 

A. October 2nd, 2000. 

Q. So you were with the school from -- from its very inception basically? 

A. Correct, uh-huh. 

Q. And how long did you continue at the school? 

A. Until June 26th of 2014. 

Q. And what was your position -- or let me ask first of all your title, and then I'll go into your duties. Okay. What was your title with regards to the Grand Traverse Academy? 

A. Superintendent slash principal. 

Q. And who was your actual employer? 

A. Smart Schools. 

Q. And what were your duties? 

A. Initially it was recruiting and hiring and helping to train teachers, developing curriculum, classroom procedures, then it was recruiting students and parents. After that it was establishing class lists, getting the school off the ground, customer service, trying to retain students, parents and teachers, classroom visits to monitor instruction, monitor pupil progress on achievement, things like that.

Q. What was the division of labor between you and Steve Ingersoll within Smart Schools Management relative to GTA? 

A. Steve was responsible for finances. I was responsible for learning and instruction. 

Q. And in your capacity as superintendent slash principal, did you attend GTA board meetings? 

A. Yes. 

Q. For what purpose? 

A. In case the board members had any questions about the instructional program or the progress students were making. 

Q. Would you -- how would you characterize your attendance at GTA board meetings? 

A. I think I was at almost every meeting. Typically I would give a report as a part of the meeting about school activities that were going on and different projects and issues. 

Q. Over the course of the 15 years that you were associated with GTA, approximately how many board meetings did you miss? 

A. Perhaps two. 

Q. And you would give your superintendent's report? 

A. Yes. 

Q. Would there be a financial report? 

A. Yes. 

Q. And that would be given by whom? 

A. Steve. 

Q. Would you be present during those? 

A. Yes. 

Q. Can you describe how the financial reports were presented to the board during that 15-year period that you were in attendance? 

A. Typically, up until the last few months, the board members would be handed a QuickBooks printout during the meeting. That would summarize the budget for the year as well as year-to-date so that they would be able to see where the school was in relation to each general line item. 

Q. And can you describe the materials. You said they would be QuickBooks. Would they -- would they be big spreadsheets, you know, how would they look? 

A. No, they were pretty fine print that was kind of a standing joke at the board meetings is all of us were reaching for our glasses and trying to read it. 

Q. And did you learn during your near perfect attendance at these meetings that Steven Ingersoll prepaid himself the entire management fee at the start of each fiscal year for the school? 

A. No, I don't recall that being discussed at board meetings. 

Q. How did you learn that that was occurring? 

THE COURT: Ma'am, when you say that, are you referring to Smart Schools? 


THE COURT: When you said "paid himself." 

MS. PARKER: All right. 

Q. What was your -- 

MS. PARKER: Maybe I can -- 

THE COURT: Because Smart Schools would also have been her employer. 

Q. Let me put it this way: Your understanding is -- what is your understanding, excuse me, as to who owns Smart Schools Management? 

A. Steve Ingersoll. 

Q. And is -- what is your understanding regarding whether he has any other person who's a co-owner or anything like that? 

A. I do not know that he has any co-owners. 

Q. So let me rephrase the question, I guess, to address the Court's concern. Did you learn at the meetings that you attended of the GTA board that Smart -- Dr. Ingersoll was taking the entire management fee for Smart Schools Management at the start of the school's fiscal year? 

A. No. 

Q. That was not discussed? 

A. Correct. 

Q. How did you learn that that was the case? 

A. I learned that later, after the IRS investigation came to my attention and the school began working with more attorneys and also with a new accounting firm and also by questioning the current auditor who was Tony, Tony Henning. Then I was told that it was -- the whole prepaid issue was because of Smart Schools taking the management fee on July 1st of each year. 

Q. What do you mean by the "whole prepaid issue?" 

A. The IRS investigators, when they came to my office, showed me on the audit a section that talked about accounts receivable and then that later also became synonymous with prepaid. 

Q. And had those accounts receivables on the audits been discussed at the board meetings you attended? 

A. No, not to my knowledge. 

Q. And you said you discussed that with Tony Henning? 

A. Yes. 

Q. What did Mr. Henning tell you about that? 

A. He said that the other party that was referred to in the audit notes was Smart Schools and that it was Smart Schools taking more money than it should have for -- beyond the expenses of running the school. 

Q. Did Mr. Henning explain why it was identified in that fashion rather than an account receivable from Smart Schools Management? 

A. No. 

Q. Did you discuss that with him? 

A. No. 

Q. Did you discuss it with Steven Ingersoll? 

A. Steve and I talked about it after the IRS investigators came, yes.

[NOTE: In her October 19, 2015 affidavit, Mentley "learned that GTA was owed $3.5 million when I was interviewed by federal agents on May 2, 2013. During the interview, the agents showed me a footnote to an audit report. Later that evening, I contacted Amy Wilson, a relative by marriage and corporate attorney, for advice. As a result of my conversation with Ms. Wilson, the next morning, I contacted GTA’s auditor Anthony Henning. I contemporaneously wrote notes from that conversation. Anthony Henning told me that SSM is the related party mentioned in the footnote of the audit report, and that SSM owed GTA $3.5 million. Henning also told me that the $3.5 million receivable was from “transfers made by Steven Ingersoll from GTA to SSM in excess of funds needed to operate the school.”]

Q. All right. Up until the investigation was made known to you, had you had any discussions about that, that account receivable? 

A. Not really about that line item, and we also did -- we never had discussion on the management fee being taken on the first day of the fiscal year each year. 

Q. All right. And once you became aware of the IRS investigation, what was your discussion with Mr. Ingersoll regarding that account receivable? 

A. He told me that it was money that he had pledged back to Grand Traverse Academy and that it was coded like that and that prevented Grand Traverse Academy from going into the red. 

Q. Did he indicate whether he had actually ever paid that money back? 

A. No. Later in our discussions he had said that he had paid some of it back. 

Q. And did you have a communication from him regarding how he had supposedly paid some of it back? 

A. No

Q. How much were you -- how much were you paid during your time at Grand Traverse Academy? 

A. It varied year-to-year. I started at I believe it was 150,000 and I believe I ended -- well, I ended at 95,000, and then there were a couple years in there where I believe it was about 200,000. 

Q. Do you recall if you received 260,000 in 2009? 

A. That seems high, but I don't have paperwork to offset that. 

Q. 251,000 in 2012? 

A. Possibly. 

Q. Do you know if Dr. Ingersoll drew a salary from Smart Schools Management? 

A. Pardon me? 

Q. Do you know if Dr. Ingersoll drew a salary from Smart Schools Management? 

A. Yes. What he had said is that we would always be equal in compensation, and he would present me typically once per year with what he called the parity picture, parity, and it would include his salary and then what was paid for his health insurance, vision, dental, 401(k) etc. and then it would include my salary. 

Q. Okay. So -- and you said those meetings took place once a years or more frequently? 

A. We had the discussions more frequently. He would give me that printout once per year. 

Q. Okay. Are you currently employed? 

A. I am not. 

Q. After being terminated -- well, how did you leave Grand Traverse Academy? 

A. I was dismissed. 

Q. Who were you dismissed by? 

A. Full Spectrum Management. 

Q. Was this -- was Dr. Ingersoll still at Smart Schools Management at that time? 

A. I believe so. 

Q. You believe Dr. Ingersoll was still at Grand Traverse Academy when you were dismissed by Full Spectrum Management? 

A. No, I believe he was still with Smart Schools Management. 

Q. I'm sorry, was he still -- I apologize. Was he still affiliated with the Grand Traverse Academy at the time you were dismissed by Full Spectrum Management? 

A. Not on a legal basis, no.  



  1. Gotta wonder where he has stached all the dough. Overseas? In his BCA home, TC home, out west, Florida residence, Noss or Lynch houses or vacation homes, boy I would start doing some night time excavating, treasure hunt or maybe an easter egg hunt looking for the golden egg! Geo cache jackpot!

  2. This is absolutely not surprising at all! Noss is just as guilty as Ingersoll in all this. How could it not be plausible to include Lynch as well? These guys are an absolute disgrace to society. Money has completely clouded their moral compass.

    I wonder what they're legacy will be to their children and grandchildren? I'm thinking it won't be much cause the only view they should have for the next 30 yrs is the bars of jail.

    BCA is on the exact same path. I think everyone's salary should be public at BCA and NCA. Watch, all salaries will look like this: xx,xxx and Lynch's salary will look like this xxx,xxx,xxx.xx. Something's wrong with that picture.

    1. I can tell you that everyone except the leaders bring in either at or below 35k. This includes insurance benefits (that are horrible), uniform stipend and a 200 class allowance (new this year! an added bonus!). But you have to factor in buying curriculum, cleaning supplies, snacks and any extras. And NCA has it way worse. Yet Lynch wants his staff to "dream big." what a laugh. They all just want to pay their bills and afford food.

      Miss fortune, at the latest board meeting, they voted to add on a high school (9th grade next school year). Its the definition of insanity.

  3. Wow, that's all I gotta say about the previous post. What in the world is 200 dollars going to do for a classroom?! Seriously, in the duration of a year, I'll bet these teachers are spending close to a thousand dollars of their own money.

    Isn't it funny that the leaders are called "building leaders" instead of principals? Are they even certified as principals? My guess is no, they are not. So, why would they be hired in as such?

    "Dream Big" eh? It's kinda hard to dream big when your pay doesn't equal the cost of living and your insurance absolutely sucks. I remember reading a while back that the current "Superintendant" at BCA makes not even 1/2 of what Lynch made as the Superintendant last year. Seriously?!?!? Is this a joke or what?! If Lynch's salary was 80k last year with NO prior experience, what a way to slap someone in the face. It just shows you what type of person he is. What a loser.

    What ever happened to Pat Cleland? Was he supposed to take over the Superintendant position? Why was this other person given the title without the pay? A possible cover up just to say they have a Superintendant perhaps? Who knows.

    Either way you slice it, teachers quitting left and right is an exact result of horrid teaching conditions and poor pay.

    1. I have absolutely no information on Patrick Cleland and his employment relationship with the Bay City Academy. It appears from the political climate in this state (Governor Snyder), there's no will among the traditional media to cover this story and to even ask questions. All I know is that Cleland took a plea deal and is on probation for two years.