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Friday, June 28, 2019

“OUR FUND BALANCE IS OVER $1 MILLION FOR THE FIRST TIME IN OUR HISTORY” Grand Traverse Academy Superintendent Crows About Unaudited Fiscal Projections, While Whitewashing School's Long History Of Financial Statement Manipulation

Oh, how soon they think you'll forget.

In its June 12, 2019 newsletter, Connections, the Grand Traverse Academy's Superintendent ticked off a series of  “highlights” from the Traverse City charter school's 2018-19 school year. 

Included is this claim: the school's fund balance was above $1.0 million “for the first time in our history.”

Not really.

In the fiscal years ending June 2010, 2011 and 2012, Grand Traverse Academy posted year-end general fund balances of $1,117,251, $1,221,510 and $1,300,419 respectively.

And in 2013, the Grand Traverse Academy and its then-manager, Steven Ingersoll, converted what would have been a -$1,378,931 deficit into a $960,009 positive general fund balance by booking Ingersoll’s “non-spendable” $2,338,930 “prepaid expense/related party receivable” as an asset, creating the illusion of a stronger financial position by offsetting that original seven-figure deficit with Ingersoll's multi-million debt—which was part of the fraudulent conversion of nearly $5.0 million from the Grand Traverse Academy, a multi-year scheme Ingersoll acknowledged on December 9, 2015, during his federal sentencing hearing. 

Ingersoll admitted that he’d fabricated the accounts receivable scheme as financial cover for his diversion of funds from the Grand Traverse Academy.

“Ingersoll transferred $700,000 to GTA so that GTA would not have a large amount of missing funds at the end of the fiscal year. Ingersoll knew that a budget deficit would trigger additional state oversight.” 

“Notably, the June 30, 2011 transfer—of $700,000—continued on to Grand Traverse Academy (“GTA”). This transfer from Steven Ingersoll and ending at GTA was not the repayment of a shareholder loan, but rather a convenient way for Ingersoll to return funds to Grand Traverse Academy before the close of the fiscal year. The government maintains that Ingersoll had previously taken funds from Grand Traverse Academy without board authorization, and that he used those funds to finance the Bay City Academy project. The transaction on June 30, 2011—in which Ingersoll returned money to GTA—was a way for Ingersoll to avoid detection of his unauthorized use of GTA funds.” 

If that excerpt from a federal court document didn't convince you, then this chart should.

The numbers shown below were extracted from the Grand Traverse Academy's annual fiscal audits, officially available from the state of Michigan--results that were never restated:

The table below reveals how the Grand Traverse Academy's fund balances would have appeared without Steven Ingersoll's phony financial padding.
Nearly two years ago, I published a two-part examination of Steven Ingersoll's rapacious tear through the Grand Traverse Academy's publicly-funded coffers (Part 1, Part 2).

You should read both articles...if you want to learn the truth.
The Grand Traverse Academy, and its Superintendent, would like you to forget it ever happened, or may still be.