An embattled Ammon charter school may have intentionally misused public funds, and its former director may have violated several principles of the Code of Ethics for Public Educators, according to a new report from the Idaho Public Charter School Commission.

The 11-page report, dated July 2 and obtained by Idaho EdNews through a public records request, details a range of issues uncovered during the commission’s months-long investigation of Monticello Montessori Charter School, including:

• Possible illegal financial practices
• “Grossly inadequate” bookkeeping
• Unauthorized operation of a preschool and daycare
• “Incredibly high” employee turnover

“Many of the school’s current operational and financial practices do not meet the standards defined in the (commission’s) performance framework and must be corrected if the school is to be considered for a renewal or conditional renewal recommendation,” the report states.

The report marks the latest in an ongoing saga at the school, including an EdNews investigation that revealed dozens of unexplained purchases, former board chair Ken Glodo’s abrupt resignation and former director Erica Kemery’s termination. Also, the State Department of Education recently concluded that the school was out of compliance with at least eight special education laws.

Commission staff members visited Monticello last month to access documents they asked for but were never given. Here’s a closer look at findings included in the report.

Financial concerns

The commission outlined various concerns over the school’s financial practices, including the use of credit cards to sustain positive cashflow throughout 2021.

Kemery’s school-issued card carried a roughly $9,000 balance between state payment distributions to the school in December 2020 and February 2021. A card issued to the school’s previous business manager carried $8,000 between similar payments.

Five of the school’s active credit cards are in the names of ex-employees of the school, and “various cards were charged interest on carried balances during the year.”

Other financial-related concerns include:

• No descriptions of various credit card purchases in the school’s expense reports — a finding that lines up with EdNews’ prior probe of the school’s finances.
• Staff reimbursements issued without documentation and without itemized receipts to determine reimbursement eligibility.
• A lack of effective asset tracking, making it hard to tell which classroom items belong to the school and which ones belong to teachers.
• Some activity that may be “purposely deceptive to the public.”
• A claim from the school’s current business manager that some past transactions were fraudulent and reimbursed to the school, despite no documentation to prove it. Those transactions included purchasing Turkish lira, the currency of Turkey and Northern Cyprus, a $2,500 purchase logged as “AIC INTLExchange” and various payments to Netflix.

An unauthorized preschool

Other financial concerns revolve around Monticello’s unauthorized operation of a preschool — and the intermingling of its funds with those at the school.

Idaho law prohibits charters from operating enterprises other than those included in their charter. Yet Monticello has for years operated an “infant/toddler” preschool program, despite prior “concerns” from the commission and the school’s independent auditor regarding its ability to maintain “appropriate financial separation.”

That separation did not likely occur, according to the report. Documents reviewed by commission staff suggest that Monticello recorded some $24,000 in preschool tuition from families between June 2020 and April 30, 2021. Yet despite evidence that regular preschool-related expenses were made, Monticello’s expense reports show no preschool-related expenses for the year.

“If the total preschool revenue was greater than the total preschool expenditures, as financial records indicate, then funds collected from families were not used for the purposes represented to families, which may have violated the Code of Ethics for Idaho Professionals on behalf of the school’s acting administrator,” the report reads.

Other preschool-related concerns include findings that Monticello teachers worked at the preschool, impacting their ability to “serve students for which the school receives state funding,” the report states. This may be one factor influencing the school’s “low academic” achievement.

Human Resources

Blistering employee turnover has accompanied the range of financial issues at Monticello.

The school reported 26 employee terminations last year — despite typically employing only 30 people at any given time.

“An inability to retain employees is a primary indicator of distress,” the report states.

Other HR-related issues include:

• No employment agreements for classified staff and job descriptions for only some positions.
• Employees paid at “highly variable rates” with “highly variable work schedules.”
• Not all teacher contracts on file have been signed by teachers.
• No overall staffing plan.
• No employment contract for the current business manager, who told the commission she agreed to work 26 hours a week for an annual salary of $55,000. The school also pays its previous business manager $50 per hour for “consulting” work — also without documentation. The school’s governing board approved neither of these arrangements.

“Without documentation of such a complicated system, it is unlikely an administrator could successfully hold employees accountable,” the report states, adding that the school’s HR issues have contributed to confusion about “who is and isn’t employed at the school, why “several” former employees have received paychecks and why “the school significantly overpay(ed) for inadequate results, at least in the case of back-office services.”

It’s also unclear, according to the report, if the school’s full-time employees actually work full time. Monticello does not operate on a four-day schedule, though several employees reported receiving “paid free time” on all but one Friday a month.

The report also details several issues with the school’s policies, including:

• A grievance policy intended for larger organizations that does not allow complaints to escalate properly.
• The business manager’s unawareness of the school’s purchasing or cash handling policies.
• Inconsistent policy implementation, including pay stubs that show employees taking 60 days of leave when the school’s own policy caps it at 30.

What happens now?

The commission asked the school for a range of additional documentation and resources related to its concerns.

It also called for an independent audit — at the school’s own expense — to determine if issues reflect mistakes or an intentional misuse of public funds.

Click here and scroll to page 45 for a recommended corrective action plan the commission issued to the school in response to its findings.

Monticello is located in Ammon, serves some 200 students and employs 11 certified staffers. The commission flagged Monticello’s finances during a meeting last month.

The school, which operates on taxpayer dollars, plans to open for the 2021-22 school year this fall.