Success Academy (two campuses)

CHARTER SCHOOL LEFT $1.2 MILLION DEBT; SUCCESS ACADEMY IN ST. PAUL LEFT A TRAIL OF FINANCIAL DEBRIS, AN AUDITOR'S REPORT FOUND; December 30, 2000; Star Tribune (Minneapolis, MN)

Before losing its charter and closing its doors last spring, the Success Academy charter school in St. Paul racked up more than $1.2 million in debt, according to an independent auditor's report filed with the state Friday.

The academy, which operated two sites serving almost 600 elementary-school children, left a trail of financial debris in its wake. The list of debtors includes staff members, who are owed $301,196 in salary and related expenses; vendors, who are owed $194,000, and taxpayers…

The K-6 school grew rapidly, but not as quickly as the enrollment projections it submitted to the state…

Of the $742,726 owed to taxpayers, $608,000 resulted from the school overstating its enrollment and failing to meet the state's expectations for its extended-year program. In addition, the St. Paul School District's position is that it overpaid the school for special-education costs by $134,000. However, Success Academy officials contest the state and district's claims and will appeal, according to the report…

…auditors found a number of irregularities and highlighted the limitations of their review in their cover letter to the association:

"We were unable to verify the completeness or accuracy of the liability balances as the School did not maintain office staff or an accounting function after July 2000. Also, we were unable to obtain written representations from management of the School as required by auditing standards generally accepted in the United States of America," the letter says.

Officials with the state Department of Children, Families and Learning are talking with staff members at the attorney general's office about seeking reimbursement from the now-defunct school. But Katie Shea, the department's director of finance and management services, isn't optimistic about recovering the money.

"There's no clear remedy as far as we can tell," she said, adding that the charter-school law did not anticipate management-company arrangements such as Success Academy's.