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Friday, November 24, 2017


NOVEMBER 27 UPDATE: A spokesperson for the Michigan Treasury provided a status update regarding the Bay City Academy's deficit plan: 

“The Enhanced Deficit Elimination Plan (EDEP) posted on Bay City Academy’s website is a filled out template that the Michigan Department of Treasury sent to Bay City Academy. Because the academy has yet to complete the preliminary review process, the posted EDEP has not been formally approved by the state Treasury Department. 

The preliminary review process is anticipated to be completed in early 2018. At this time, it has not formally begun.” 

What happens to a Michigan charter school when it cannot resolve a cavernous budget gap within five years?

If the school in question is the Bay City Academy, it gets a do-over.  The financially hobbled charter school, founded by convicted tax cheat Steven Ingersoll, recently posted an enhanced deficit elimination plan on its “Transparency Reporting” page.

As you can see in the comparison chart below, taken from two approved plans, actual revenue fell woefully short of the Bay City Academy's rosy projections.

In addition, the actual deficit for the most recent period, the 2016-17 school year, grew by nearly $50,000.

The projected deficit for 2018-19 year, pegged by the Bay City Academy at $870,331 in its November 2016 plan, has now ballooned to $1,209,951.

And the bullshit doesn't stop there. 

The Bay City Academy's earlier deficit elimination plan was based on the following student population growth targets: 

2016/17: 427 
2017/18: 450 
2018/19: 480 
2019/20: 506 

This year's iteration reveals the following student population targets:

2016/17: 427 346 
2017/18: 450 340 
2018/19: 480 355 
2019/20: 506 356 

However, the enrollment crash did not stop Brian Lynch from stuffing his pockets with taxpayer case, paying himself nearly $90,000 a year (in salary and benefits) to act as the school's superintendent, while pulling in another $278,371 paid to his Mitten Educational Management. Lynch and his business partner, accountant Michael Randel, run Mitten.

According to official Michigan Student Data System reporting for the Fall 2017 General Collection (student count), the Bay City Academy registered a population of 322 students. That total includes Bay City's Farragut campus and Mancelona's North Central Academy.

Enrollment at the Bay City Academy peaked at 523 students in the fall of 2012, when its founder Steven Ingersoll first opened its doors.

The only doors Ingersoll now hears are made of metal bars.

Let’s take a look back on how this rat f**k began, and where it should end.

According to the Bay City Academy's 2014/2015 financial report, the charter school incurred a significant operating deficit in 2015, resulting in a cash flow shortage. 

As of June 30, 2015, the Academy's current liabilities exceeded its current assets by $1,374,477, pretty steep for an operation with $3,980,670 in total revenues. 

In addition to calling out Steven Ingersoll's longtime pattern of paying his Smart Schools Management expenditures without providing a whiff of documentation, the report placed blame for much of the financial fiasco squarely at the feet of the school's board of directors. 

Under Michigan state law, the board has the ultimate oversight responsibility for the school district's operations. 

Stating that the finding was a result of observation and inquiry with the Academy's administration, the auditors 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.” 

Taxpayers — you know what? 

Never mind. 

Do what you gotta do, because you’re never going to stop being mad about this…and rightly so.


  1. Thank you again, Miss Fortune, for your excellent research and analysis. The only "transparency" that exists at the Bay City Academy is smoke and mirrors right from the beginning. People: if your children are there, get them out as soon as possible. If your already took your children out of the scam of a school, tell others why you did it and help prevent further abuse of taxpayer money. Do NOT add any more money to line Mitten Bay Management Company's pockets and those of Michael Randel and Brian Lynch. Wake up and smell the pencil erasers and chalk on the chalkboard!

  2. Why are they letting a school that is shrinking keep taking in money? Absolutely ridiculous. Something stinks and it's called white collar welfare and Betsy DeVos. Companies taking over schools, not for the education of our children, but for the profit of their own personal pockets. When are people going to stop supporting this. Sad and a terrible destruction of our educational system, our children and our communities.
    Money laundering.