An audit of the school’s 2009 finances released Thursday by state Auditor Dave Yost found Rainbow and school leaders flunking accounting and ethics as well as open meeting requirements. The audit said Rainbow’s payments of $7,000 and $37,688 to companies she owns violate Ohio’s ethics laws, which prohibit public officials from paying businesses they or their relatives have a financial interest in.
Rainbow, who didn’t return repeated requests for comment Thursday, wasn’t alone in being accused of ethics violations. The brother of the dean of students was paid $22,521 for services rendered, and a board member’s company was paid $9,460 for psychological services, according to the audit. The findings were forwarded to the Ohio Ethics Commission.
Charter schools, also known as community schools, are publicly funded, but run by private, for-profit groups and often have non-union teachers.
State funding for the academy resumed earlier this month after being cut off in April for missing a Nov. 30, 2009, deadline for filing an annual financial report with the state auditor’s office. When those numbers were turned over, they revealed red ink.
The academy, which received about $1.56 million in state taxpayer money last year, had a deficit of $55,425 on June 30, 2009. Total expenses were about $1.95 million with total revenues approximately $1.64 million.
Besides running a deficit, the audit said administrators flouted public meeting laws. No notification of public meetings for the school’s board of directors was made and no minutes were kept of the meetings, according to the audit, which violates Ohio Sunshine Laws.
The academy’s future is in doubt. The audit said the Ashe Cultural Center, the academy’s sponsor, has not renewed its sponsorship, which expires June 30. Charter schools cannot run without sponsors.
“The conditions raise substantial doubt about the academy’s ability to continue as a going concern,” Yost wrote in a May 5 letter to the academy’s board. “The financial statements do not include any adjustments that might result from the outcome of this uncertainty.”
Opened in 2004, the academy emphasizes education in the arts and science. Students wear uniforms and sit on couches or plush chairs rather than at desks. Teachers come up with their own lesson plans rather than relying on textbooks. The unorthodox approach is designed to make students who may have struggled at traditional schools excel in the setting.
However, the academy, 4125 Leavitt Road, has been troubled since its inception. It was placed on academic watch shortly after opening due to low test scores. In 2007, the auditor’s office chided Rainbow for writing $15,129 worth of checks to a company she owned for school services.
In December, a former teacher at the academy had obscenity and pandering charges filed against him after images of a nude 14-year-old female student were allegedly found on his cell phone. Rainbow said the teacher was suspended after the photos were found.
If the academy does close, it wouldn’t be alone in having problems. An analysis of state Department of Education statistics last year by the watchdog Forum for Education and Democracy found that 60 Ohio charter schools had closed in the last five years due to money mismanagement, poor academic performance or other reasons.
Some 89,000 students were attending 332 charter schools in Ohio at the end of the 2008-09 school year, according to the forum.
Proponents say their innovative curriculum and avoidance of sometimes-restrictive union rules provide a better education than publicly run schools. Opponents say charters siphon money from publicly run schools, which, unlike charter schools, are required to provide costly special education and English as a Second Language classes. Despite not having to provide those services, charter schools haven’t outperformed traditional public schools, according to a 2009 report by the Stanford-based Center for Research on Education Outcomes.
The study of charter schools in 15 states — including Ohio —found 46 percent of schools had no significant academic gains over their publicly-run counterparts, 37 percent underperformed while 17 percent did better. According to the study, charter school students in Ohio had significantly lower math and reading performances.
Lorain school board member Timothy Williams praised Rainbow and said he was saddened to hear of the academy’s problems. Williams said he welcomes competition from charters, but the state needs to hold them more accountable.
“Competition needs to be fair, and competition needs to be equitable,” he said. “I hope that over the next number of years that we figure out how to coexist.”
Contact Evan Goodenow at 329-7129 or firstname.lastname@example.org.