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State slaps Legacy Academy with $352K in findings



Published: Fri, July 8, 2011 @ 12:09 a.m.

By Denise Dick

denise_dick@vindy.com

YOUNGSTOWN

The state auditor’s office has issued more than $352,000 in findings for recovery in a special audit of Legacy Academy for Leaders and the Arts.

“I’ve seen better documentation at a lemonade stand,” state Auditor Dave Yost said in a news release. “Schools must be able to account for every dollar spent.”

The charter school, which operated inside Mount Calvary Pentecostal Church on Oak Hill Avenue, closed at the end of the 2010-11 school year, citing declining enrollment. The school had operated for 10 years.

Results of the special audit will be forwarded to the Mahoning County prosecutor, the state auditor’s office said.

The audit, released Thursday, covered July 1, 2005, through June 30.

The report found many instances of payments made to vendors without appropriate supporting documentation maintained by the academy.

The special audit was initiated after auditors found numerous unsupported expenditures, unusual bank activity, many related party transactions and expenditures not for academy operations.

The school also made payments on its lease that weren’t in accordance with the lease agreement’s stated terms, and “the academy paid individuals for professional services without an executed professional-services contract on record,” the audit found.

The audit lists six findings for recovery, the largest, $233,923, against Carl Shye, the school’s treasurer.

Shye, an accountant in New Albany, Ohio, works as a treasuer at several community schools in Ohio. A woman who answered the telephone at his office said he doesn’t talk with news reporters.

During the audit period, auditors found that the academy had issued 90 checks to Shye totaling $483,923 including monthly treasurer fees, loan repayment, software licenses, compilation services, IRS audit meetings and audit-preparation services.

“Neither the academy nor Mr. Shye provided us with contracts, loan agreements, bills, invoices or any other valid supporting documentation to substantiate the amounts paid,” the audit said. “Additionally, there was no record of the governing board having approved the payments to Mr. Shye.”

Auditors gave Shye credit for services provided for $50,000 per year, or $250,000 for the period.

During the time covered by the audit, academy checks were typically signed by the treasurer and the business manager. “However, 73 of the 90 checks issued to Mr. Shye only included Mr. Shye’s signature or the signature for Business Manager Edward Boling was signed by Mr. Shye,” auditors found.

Shye told the auditors he received authorization from Boling to sign checks on his behalf; “however, there was no evidence of such authorization from Mr. Boling.”

Aaron Kinebrew, assistant director of Educational Resource Consultants of Ohio in Cincinnati, the school’s sponsor, said ERCO wasn’t aware of all of the problems at the school.

“We knew they had some financial issues, and we tried to address those with the school through the year — meetings with the school regarding the debt they had,” Kinebrew said. “But what I just read, all I can say is wow. It’s upsetting to us as a sponsor, and we wish this wouldn’t have ever occurred.”

The treasurer is hired by the school’s board of directors, not the sponsor.

Kinebrew was surprised at the extent of expenditures without documentation.

Another finding for recovery in the Legacy audit is against a company called CBC, LLC. During fiscal year 2006, the school issued four checks, totaling $6,000, with no supporting documentation.

“Additionally, these payments were mailed to the home address of, and endorsed by, Gary Brantley, who is the husband of Academy employee Brigitte Brantley and nephew of former Academy board member C. Wayne Brantley,” the report said.

The audit issued a finding for recovery of $6,000 against CBC, Shye and Boling and referred the issue to the Ohio Ethics Commission.

Brantley couldn’t be reached to comment.

There also is a finding for recovery against Mount Calvary Pentecostal Church.

The school issued four checks to the church totaling $15,965 for which no supporting documentation was maintained.

“These payments did not appear to be rent payments and no additional contract for services or facilities leases was presented to support a purpose for the payments,” the audit said.

The lease agreement between the church and school says the church will pay electricity, natural gas, refuse collection, snow removal, landscaping, grounds keeping and grass cutting, water and sewage charges, security system building and grounds maintenance and the telephone system.

“During the period, the academy issued 24 checks totaling $50,374 for expenses that should have been paid by the church as part of the lease agreement,” according to the audit.

Two checks totaling $1,179 were signed by Shye and Jerry McKinney, a board member, while the remaining 26 checks, totaling $65,160 were signed by Shye and Boling.

Auditors issued a finding for recovery against the church and Shye of $66,339.


State Auditor Dave Yost’s office released a special audit Thursday of Legacy Academy for Leaders and the Arts in Youngstown. It listed six findings for recovery for the charter school, totaling $352,062. The findings:

Carl Shye, $233,923: The academy issued 90 checks to Shye totaling $483,923 for monthly treasurer fees, loan repayment, software licenses, compilation services, IRS audit meetings and audit preparation services. Neither the academy nor Shye provided auditors with contracts, loan agreements, bills, invoices or any other valid supporting documentation to substantiate the amounts paid. Additionally, there was no record of the governing board having approved the payments to Shye.

Michelle Nazarovech and Shye, $24,500: During fiscal year 2006, the school issued two checks to Nazarovech totaling $24,500 for which no supporting documentation was maintained. Nazarovech wasn’t an employee of the academy but rather an independent contractor for which the school didn’t provide

professional-services contracts nor was evidence provided of board approval for such services. Additionally, one of the two checks in the amount of $19,500 was assigned to Shye by Nazarovech with no explanation as to the purpose of such an endorsement. When asked about the transaction, Shye wasn’t able to explain the reason the check was assigned to him.

Edward Boling and Shye, $1,500: During fiscal year 2006, the school issued two checks to Boling, the school’s business manager, totaling $1,500 without supporting documentation. A $1,000 check to Boling indicated accounting assistance in the memo line. No contract was provided for the services.

Mount Calvary Pentecostal Church, $66,339: During the period covered by the audit, the academy issued four checks to the church, totaling $15,965 without supporting documentation. The payments didn’t appear to be rent, and no additional contract for services of facilities leases was presented to support a purpose for the payments. Two checks totaling $1,179 were signed by Shye and Jerry McKinney, a board member, while the remaining 26 checks, totaling $65,160, was signed by Shye and Boling.

George Washington Carver Preparatory Academy, Columbus, $19,800: During FY 2006, the school issued two checks to the preparatory academy without supporting documentation. Shye also was the treasurer at George Washington.

CBC, LLC, $6,000: During FY 2006, the school issued four checks, totaling $6,000, to CBC without supporting documents. The payments were mailed to the home of Gary Brantley, who also endorsed the payments. Brantley is the husband of Brigitte Brantley, an academy employee, and the nephew of C. Wayne Brantley, a former academy board member. The issue has been referred to the Ohio Ethics Commission.

Source: Ohio Auditor Dave Yost’s Office


Comments

1Freeatlast(1991 comments)posted 3 years, 2 months ago

Charter schools are just way to cut teachers pay . Look what Cleveland is doing . But this is what Ohio voted for

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2RobertAlphonso(74 comments)posted 3 years, 2 months ago

We have more of this to look forward to as kasich dishes out even more of our money to these frauds. Charter Schools are a joke.

Carl Shye should be imprisoned for grand larceny and never again be allowed around taxpayer money.

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3James_S(268 comments)posted 3 years, 2 months ago

Mt.Calvary Pentecostal Church should have never become beholden to the State in the first place.
They should have funded their school through offerings, tithes from their members at their church and from their denominations.

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4gingerspice(115 comments)posted 3 years, 2 months ago

"What's in the dark will be brought to the light!

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5Bigben(1996 comments)posted 3 years, 2 months ago

"Mt.Calvary Pentecostal Church should have never become beholden to the State in the first place.
They should have funded their school through offerings, tithes from their members at their church and from their denominations."

Thanks James .I have to agree that the charter schools are being used by the powers that be to put a hurt on public schools but once they take the money policy gets dictated from the powers that be.In other words don't make a deal with the devil so to speak.

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6Bigben(1996 comments)posted 3 years, 2 months ago

Once the private schools take the cash they loose their autonomy and really are private in name only meanwhile the public schools suffer funding shortages so that both are hurt.

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7GoPens(397 comments)posted 3 years, 2 months ago

Yea, lets take away more money from the public schools and give it to these "sham" schools. That's the way to go Kasich.

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8mrblue(981 comments)posted 3 years, 2 months ago

Kasich loves charter schools. He is going to be known as the king of charter schools. This guy is going to ruin OHIO. So far, I can't see where he has done anything that will greatly benefit the state. As I have said before, time will tell.

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9TB(1167 comments)posted 3 years, 2 months ago

Lack of oversight in business is a good thing though...isn't that the current thought in Ohio government? Privatization is the way to go.

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10Bigben(1996 comments)posted 3 years, 2 months ago

"Yeah, I'd much rather pump millions into Youngstown City Schools!" -- - First we are talking about public schools not just Youngstown schools and anyone who would deny an educator in the Youngstown system from making a respectable living needs to visit the schools for a while and gain some perspective.That goes for Police and administrators but not the Board of Ed.As for other districts the administrators are over paid and obnoxious particularly at the vocational county school.

Second no one asked the voters if they wanted new schools built through out Ytown or any other district around here because what we want doesn't matter.Some of the schools needed replaced or upgraded but not all of them at once in multiple districts.Just one more reason why we are broke.

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11TB(1167 comments)posted 3 years, 2 months ago

Privatize everything! It saves money!!! Just look at this example!

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