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Monday, February 4, 2019

UNBALANCED SHEETS: Is The Bay City Academy Using Prepaid Managment Fees As “Asset” To Artificially Improve Its Financial Position? December 2018 Quarterly Report Reveals Mitten Education Management Prepaid Fee Ballooned To Over $200,000; Carried On Balance Sheet As An “Asset” (Sound Familiar?)

BREAKING NEWS There really is a paper trail...if you care to look for it.

If you suspected the budget figures in the Bay City Academy's most recent financial balance sheet would resemble cafeteria vegetables — cooked beyond recognition — you’d be correct.

As you can see below, the Bay City charter school's most recent balance sheet, for the quarter ending December 31, 2018, reveals a whopping $218,965.66 “Prepaid to MEM”. Better known as Mittten Educational Management, the firm was co-founded by Brian Lynch and his business partner Michael Randel. (According to the Bay City Academy's 2017/2018 Financial Statement, issued on October 22, 2018, MEM was paid $266,692 in management fees—9 percent of the school's revenues. In addition, Lynch double-dipped and paid himself a healthy $82,050 compensation package as the school's Superintendent.)

The nearly quarter-million dollar prepaid management fee was disbursed to MEM before it was earned, and has grown larger instead of shrinking as expected in a legitimate accounting practice.  

Without the padding from that so-called “asset”, the school founded by Steven Ingersoll (currently serving a 41-month bit in federal prison for tax evasion and conspiracy to defraud the government) would be in a nearly $1.2 million dollar budget hole.

As you can see below in the first quarter's balance sheet, issued on October 24, 2018 for the quarter ending September 30, 2018, the prepayment grew from $172,238.82 in that period.

Regular readers of this blog will recognize the same unethical habits — prepaid management fees and bogus “cash refunds” that went unpaid, sitting for years on the books as “receivables” from the management company — Steven Ingersoll employed during his multi-million dollar plunder scheme at the Grand Traverse Academy. 

And it appears that the Bay City charter school's board members are as willfully impotent and sympathetic as those in Traverse City.

1 comment:

  1. Send this information to Dana Nessel office .They have a whole new attitude about this stuff.