Last July I wrote an article on the findings of the financial report card on charter schools compiled by law by the DC Public Charter School Board, the Office of the State Superintendent of Education, and the Office of the Chief Financial Officer. The Charter Audit Resource Management (CHARM) review found the fiscal health of the movement to be strong, with schools in general demonstrating improved positions in fiscal 2012 compared to the previous year.
As you may recall the study included four groupings of institutions characterized as demonstrating "financial circumstances." These included:
1. Charters with reportable audit findings,
2. Charters with unresolved reportable findings from the previous year,
3. Charters with negative cash flow. and
4. Charters with negative net asset positions (total assets minus total liabilities) indicating the schools use borrowed money to finance operations.
Options PCS appears in none of these lists. In fact, when you take a look at the fiscal year 2012 individual financial snapshot for this charter you see an extremely positive picture. The school had over $2.2 million in unrestricted cash at the end of the year, about a $150,000 drop from 2011. The net asset position at over $4.6 million improved from the previous 12 months, and the school ran a $405,000 operating surplus. The one warning sign, perhaps, is that the cash flow from operations went from approximately $787,000 in fiscal year 2011 to a little over $206,000 in fiscal year 2012.
However, when you consider the six trending measures included on the report all are on an upward trajectory in 2012 except for the occupancy expense ratio which was 11.1 percent compared to 8 percent the previous year. The PCSB comment on the audit summary states that "based on audited results, PCSB deems the school to be compliant with GAAP standards, to be economically viable, and to have shown no patterns of fiscal mismanagement."
In the wake of news stories that the school's executives and board chair diverted over $3 million from the school to two private companies they controlled in fiscal year 2012, including a transportation contract to these firms totaling over $980,000 and an executive director compensation of $425,000 a year, it obviously looks like CHARM needs to be replaced.