Niagara Charter School

MORE SCRUTINY FOR CHARTER SCHOOLS IN DEBATE OVER EXPANSION, May 25, 2010, The New York Times

During its first years of operation, the Niagara Charter School in Niagara Falls spent thousands of dollars on plane tickets, restaurant meals and alcohol, and more than $100,000 on no-bid consulting contracts. Yet the school’s teachers resorted to organizing a fund-raiser to buy playground equipment…

In some cases, however, officials in charge of overseeing charters have reauthorized schools even after finding significant evidence of financial mismanagement. The problems at the Niagara Charter School, for example, were uncovered by investigators from the State Education Department and detailed in a 2008 report to senior department officials.

Among other findings, the school could not explain to investigators’ satisfaction how the board had determined the salary of its chief executive at the time, Gary Stillman, who also appeared to be simultaneously employed by another charter school in the area, Enterprise Charter School, which shares some board members with Niagara.

The report concluded that Niagara suffered from “the pervasive appearance of financial mismanagement and less than ethical behavior on the part of the Board of Trustees and school administration.”

Yet last year, John B. King Jr., the state’s senior deputy education commissioner, recommended to the State Board of Regents that Niagara’s charter be renewed.

In a statement, Dr. King defended his decision and said that before the renewal was granted, the department took steps to ensure that Niagara’s problems would be fixed.

“It’s important to note that student achievement is also improving at Niagara Charter, a school with a large percentage of high-need students,” Dr. King said.

The president of Niagara’s board, James Muffoletto, said that Mr. Stillman was no longer working at the school and that the school had disputed some of the findings of state education officials…

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A $2 BILLION DECISION: THE CASE FOR REFORMING NEW YORK’S CHARTER SCHOOL LAW, April 2010, New York State United Teachers

…Four months ago, the Board of Regents granted the Niagara Charter School its first renewal of its charter for three additional years despite a report which revealed “misallocation of funds and a lack of adherence to the Board’s own internal controls.” A State Education Department report said the Niagara Charter School paid its CEO more than his contract allowed; permitted him to spend school money on alcohol and lunches on “an almost daily basis;” gave him the sole authority to take out a bank loan; and also spent excessively on consultants. In one instance, the report noted, “The hiring of a consultant for duties that could have been performed by personnel at the School, and the hiring ofpersonnel for the equivalent of $160,000 per year, would appear to be extravagant and wasteful.”127 The State Education Department report called Niagara Charter School a “school in disarray.” It said, “There is, at the very least, the pervasive appearance of fiscal mismanagement and less than ethical behavior on the part of the Board of Trustees and school administration.” Underscoring the critical need for comptroller’s audits, the same State Education Department document also noted, “The School has received a clean, unqualified audit report each year of its operation, and no material weaknesses have been found.”…

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A $2 BILLION DECISION: THE CASE FOR REFORMING NEW YORK’S CHARTER SCHOOL LAW, April 2010, New York State United Teachers

…Management at the Enterprise Charter School in Buffalo used some of the school’s funding to support the financially ailing Niagara Charter School. Enterprise Charter School’s board paid at least $7,700 in health insurance premiums for its former CEO while he was CEO of the Niagara Charter School. Enterprise’s board also overpaid the CEO by at least $34,000 and later gave him a $60,000 consulting contract – with 25 percent, or $15,000, paid up front. School officials could not document what consulting services he provided to the school. Enterprise board members also spent $85,000 without paperwork or approvals, including thousands of dollars in charges for parties, alcohol, tickets to the theater in Toronto, travel and personal expenses…

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