REAL Prep Charter Academy

The founder of a proposed Portland charter school was able to spend $450,000 in federal funds with little to show for it by choosing the least-regulated route to creating such a school and papering over problems when overseers checked in.

Erica Jayasuriya, a Portland mom with visions of opening a recording arts-based high school that would transform education for disengaged teens, presided as the team she assembled spent the money on planning, promotion and curriculum design -- without ever mustering enough curriculum, materials, students or equipment to open a school.

No one at Portland Public Schools, which approved Jayasuriya's proposal to open REAL Prep Charter Academy, or at the Oregon Department of Education, which awarded the nonprofit she created two $225,000 grants, took steps to stop her and her team until late August.

By then, 17 months after the money began flowing, the school was weeks from its scheduled opening and the money spent. Jayasuriya's pay took at least $68,000 of it.

State and school district officials say they understand why the public questions their failure to notice problems earlier. But they say failings were hidden from them, in part by misleading information from REAL Prep leaders and in part because Congress specified that charter school starters be allowed control over their grant spending.

"There was nothing that was said and nothing in what they submitted to us that brought our attention that they were not progressing toward opening a high quality charter school," said Susan Inman, the state's director of learning opportunity options.

Three days before school was to start Sept. 12, district officials shut REAL Prep, forcing students to scramble. More than 120 students filled out paperwork showing they wanted to attend, including 48 who officially enrolled.

Now, eight days into the district's school year, only half of the 120 students are in school. Thirty-seven are trying to get into a school that fits them and has room, while the status of 28 others is unsure because officials haven't been able to reach them...

Jayasuriya signed a detailed agreement, including to preserve financial records and get state approval if spending changed from the school budget. Unknown to state regulators, however, she was at odds with most of her own board over spending.

Eric Ensley, president of the board from its founding in May 2009 until he resigned in June 2010, said he tangled with Jayasuriya over her desire to immediately begin paying people -- including herself -- rather than first get a firm financial plan and seasoned administrator in place.

"There were manipulative tactics to try to get things approved and paid for that I didn't think should be paid for," he said. "I can't tell you how heated the debate got in the boardroom. ... To pay Joe Schmo to advocate for the school just because he knows this deejay is no way to run a school."

Ensley insisted, for example, that for Jayasuriya to become a paid employee of the school, she must step down from the board and apply for the job. In the end, Ensley and three other board members resigned, leaving Jayasuriya and two others on the board. Jayasuriya then helped hire herself and the board treasurer as paid contract employees of the school...

On Sept. 1, the problems became starkly clear. In a meeting at school district headquarters, four top school officials began arguing. The treasurer said she was ill-equipped and would resign that night. The co-director resigned during the meeting. A third leader walked out in disgust after learning there was no money left for furniture and equipment. And the list of seemingly qualified board members the district had been given was a fiction...

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