Five senior managers at one of Long Island's fastest-growing public charter schools charged more than $60,000 in credit-card expenses without receipts or itemizations required by their school's own rules, state auditors reported.
The state's review of spending practices at the Academy Charter School in Hempstead found that 17% of credit-card transactions sampled, totaling $36,329, were approved for payment without supporting receipts, auditors said. Another 12% of sampled purchases, totaling $25,342, had receipts that were not itemized.
Overall, credit-card purchases made on behalf of the academy totaled $496,970 during the 2017-18 academic year, according to the state comptroller's office, a watchdog agency that conducted the audit. The school's total annual budget was $18.9 million.
Under state law, charter schools operate independently of traditional school systems but receive tuition revenues from those systems based on the numbers of students they attract.
Academy Charter School, which enrolls 1,740 students, has proved popular with families in Hempstead and other communities; it reports a waiting list of 850 applicants. But tuition charged by Academy and other nearby charter schools has diverted millions of dollars in revenues from the 7,600-student Hempstead system, where large-scale academic failures and other problems have prompted hundreds of families to seek alternatives.
The latest state audit report, issued in September, stressed the importance of itemizing credit-card charges — on grounds that to do otherwise results in "a lack of assurance that funds are expended for legitimate school purposes."
"School officials did not establish effective procedures that ensured credit card claims were properly supported and credit cards used appropriately," stated the report, produced by the comptroller's regional center in Hauppauge.
In response, the Academy's top leaders said they had closed the credit-card accounts of two business managers, who were among five administrators issued cards. Those leaders also imposed a monthly spending limit of $5,000 on each remaining card, while requiring that all purchases over $500 be approved in advance.
The school's three directors of executive, operations and academic functions retain their cards.
"The board of trustees and school officials of The Academy Charter School work diligently to oversee financial activities and safeguard resources," Donovan Henry, the school's chief financial officer, stated in a response letter submitted to the state. "We are continually updating our policies and procedures and enhancing internal controls to minimize any exceptions."
The Academy's written credit-card rules require that users explain the purpose of each transaction and provide a detailed receipt, not just a summary, according to the comptroller's report.
This often did not happen, as in the case of one school official who charged $1,476 for a meal, describing it only as a "group lunch." Academy leaders later said the event was a luncheon for teachers attending fall training.
Card purchases, auditors said, included $5,590 for furniture that did not have an itemized invoice attached, $1,576 to a party rental vendor for what was described only as a "school event," and five gift cards for about $550 each. School officials listed gifts as teacher appreciation awards, without naming recipients or providing proof that the school's board of trustees had approved the awards.
School managers also failed to adequately document travel expenses for out-of-town conferences, auditors said. They checked 119 card charges for travel expenses totaling $23,920 and found that 40% lacked receipts. This included 29 charges for lodging and air travel.
Academy Charter School, which opened in 2009 with 150 students in kindergarten through third grade, has rapidly expanded into a K-12 system, including a high school opened in 2016. Last year, the charter organization started another school in Uniondale, which enrolls 250 students in kindergarten through third grade.
"I'm proud of the community that we have been able to provide for our scholars — one that is committed to scholarship, leadership and service," Travis Holloway, the high school principal, said in a prepared statement.