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Saturday, July 1, 2017

SLOUCHING TOWARDS OBLIVION: IS THE MICHIGAN DEPARTMENT OF EDUCATION FINALLY READY TO CLOSE THE BAY CITY ACADEMY? Bay City Academy Deficit Now 45.33% Of Its Revenue! Enrollment Slide Accelerates At Bay City Academy; Mancelona's North Central Academy Steep 27% Year-Over-Year Enrollment Plunge. Floundering Charter School's Deficit Virtually Unchanged Since 2015; Went From -$1,374,477 In 2015 To -$1,366,699; Management Company Projected In 2015 That 2017 Deficit Would Be Whittled Down To $1,099,749.

Scoring a 2017 deficit that jumped by a shocking $250,000 when compared with 2016, the Bay City Academy is now shouldering a deficit that, based on a percentage of revenues, has swelled to over 45% of the charter school's revenue. In 2016, that percentage was 35%.

By the end of this month, the Bay Academy will be submitting a mandatory revision of its Deficit Elimination Plan, originally approved by the Michigan Department of Education on March 29, 2016, and things don't look good for the 'Ponzi' charter school founded by convicted felon Steven Ingersoll.

According to the Bay City Academy's 2014/2015 financial report, the charter school incurred a significant operating deficit in the fiscal year ending June 30, 2015, resulting in a cash flow shortage — the Academy's liabilities exceeded its assets by $1,374,477. 

Stating that its finding was a result of observation and inquiry with the Academy's administration, the auditors in 2015 determined the deficit was result of an over reliance on Smart Schools Management for financial oversight. As a result, there was “a lack of appropriate administrative oversight by the Board of Directors over the Academy's finances during the year. The effect of this condition resulted in actual expenditures exceeding budgeted amounts, and a year-end deficit fund balance.” 

However, according to a FYE June 30, 2017 3rd Quarter balance sheet filed on June 23, 2017 by the Bay City Academy, the projected year-end deficit after two years remains virtually unchanged at $1,366,699—down by less than $8,000 after two years and nearly $7.0 million, public dollars poured into the school by the State of Michigan and the federal government. 

As you can see in the chart below, excerpted from the MDE's June 14, 2017 Quarterly Report to the Legislature on Deficit Districts memo, the Bay City Academy's deficit grew by $211,243 from the June 2016 to June 2017. 

In its original plan, approved by the charter school's board on January 21, 2016 and submitted to the MDE, the Bay City Academy projected its deficit for the 2016/2017 school year would be $1,099,749.

Big difference, eh?

The Bay City Academy 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. 

While the Bay City Academy's approved deficit elimination plan projected 422 students district-wide during this fiscal year, MDE's official June 20, 2017 State Aid payment report is based on district-wide total of 343 students. 

Of course, the so-called district now consists of just two buildings, down from the original four: Bay City's Farragut Schoolhouse and Mancelona's North Central Academy. 

Mancelona's student tally dropped like a hot rock, plunging from 191 in 2015/2016 to 139 in 2016/2017. 

The Madison Arts campus in Bay City closed in late 2016 after Steven Ingersoll defaulted on its mortgage, sticking the taxpayers with a $1.5 million bail out of original lender Chemical Bank with the USDA coming to the financial institution's rescue. 

In addition, Ingersoll also defaulted on a $700,000 mortgage for the Farragut building, leaving Wildfire Credit Union to make a deal with Brian Lynch's Mitten Educational Management to pay $8,000 a month to occupy a building that now houses grades K-9...or is it K-10?

Here's the baddest bad news: the deficit plan projected $3,578,417 revenue for the 2016/17 school year, but the current year calculation is nearly 16% less at $3,034,314.  

Stated as a percentage of its revenues, the Bay City Academy's $1,366,699 deficit is 45.33%. 

Yes, you read that right: 45.33%!

But don't despair, six-figure prepaid expenses have returned to Bay City, courtesy of fortunate son-in-law, Brian Lynch and his Mitten Educational Management.

As you can see in the excerpt above, Lynch greased his own palms to the tune of a $202,791.84 prepayment! (Funny, that amount is nearly identical to the $211,243 increase in the deficit.)

The Grand Traverse Academy's attempt at “make it go away” crisis PR, designed to remedy the school's lack of communication and transparency regarding repayment of an outstanding $1.67 million dollars owed to the Traverse City charter school by Steven Ingersoll's Smart Schools Management, Inc., fell far short its goal: to convince you that it's a “common accounting practice” to call a seven-figure loss a “rebate” and keep it on the books as an asset called a “prepaid expense”.

But it looks like somebody was taking notes at the dinner table, ready to try again. 

Scroll down for complete financials.


  1. Well, will you look at that? Prepaid expense to MEM (Mitten Educational Managament). That should be another red flag for the feds and the State Dept of Education. Nail those crooks for the taxes on this income. And who knows, it wouldn't be surprising if some of that 'prepaid expense money' was going to Ingersoll and/or his wife while he's in prison. This needs to also be covered by the Bay City Times and TV-5 and TV-12. Think I'll put a little bug into their ears to start some investigation.

  2. Of course he is using the "prepaid expense" trick he learned from Ingersoll. They aren't going to shave the deficit down. Lynch is just going get keep finding ways to pull money out of that school as fast as he can before anyone catches on. Take these education profit sucking crooks to jail where they belong. Stop the charter cheaters now.

  3. 7 million poured into that school by the state(THANK YOU VERY MUCH TAXPAYERS) AND the deficit has gone from 20 some percent to 40 some percent. Lynch doesn't plan on fixing the problem. He is just going to keep drawing money until someone catches his Ingersoll techniques. Wow Bay City get your act together and stop this crook from profiting off the backs of children.

  4. In it to profit. Lynch has a bachelors degree in teaching, taught a couple of years on a provisional teaching certificate, and has zero credentials to run a management company except for his desire to make easy miney. And lots more than he'd get teaching-he and his daddy in law found the goose that lays the golden eggs and it is us.

  5. What is sad... on top of all this.... is Ingersoll Noss Lynch they are not nice people!

    1. Agreed, arrogant shifty money grubbers, that will use people and then manipulate and threaten them into submission. Not good people at all and they care nothing about children and education. It's white collar welfare and a crime. Take em to jail please! Don't let this continue.

    2. Ingersoll is definitely not a good person. He's only good at manipulating, controlling, using people and things to his own advantage in any way he can.

  6. People - spread the word about the greed of the management companies at the Bay City Academy and Grand Traverse Academy. Put your students in schools that have accountability.

  7. Take a look at the 'custodial salaries' section. Wonder if all that or most of that money was going to Tammy Bradley and/or her relatives? Wouldn't surprise any of us.

  8. Look at the telephone bill almost 17,000 really?

    1. Must be making a lot of phone calls to Ingersoll (before he went to federal prison), Noss, Harger and all the other scoundrels connected with IVL. After all, it is "IVL" - I Value Loot (other people's loot!).

  9. How convenient to keep paying yourself obscene amounts of money event while the school is going bankrupt.

    "I Value Loot" scam isn't working out to well for Lynch these days is it? And 17,000 dollars for a phone bill?! What the hell is going on? I'll bet the phone bill is 2k, and the rest goes in their pockets.

    I feel so bad for the people who are stuck working at these places just to pay their cost of living.

    Shame on you Lynch and Noss. You are selfish and should not be around schools at all.

    They're scams will all come to an end in time.