We knew the story about financial irregularities at Options Public Charter School would get worse before it got better and here we go. This morning the Washington Post's Emma Brown and Ann Marimow reveal that a grand jury looking into the matter is to be seated next week. At the same time the D.C. Office of the Inspector General has sought records from the school. This comes on top of the civil complaint filed by the D.C. attorney general. D.C. Superior Court Judge Craig Iscoe has appointed Josh Kern as a receiver for the charter and he is expected tomorrow to appoint one to take charge of the two companies formed by top former executives of Options and its board chair. In addition, D.C. Council education committee chairman David Catania is about to hold a panel discussion to determine the impact on the students of all of this activity.
The reporters also state that J.C. Hayward has petitioned the court to have her removed as a defendant. Her attorney states that she received no monetary gain in her role as board chair. But this argument begs the question. What role did she and the other members of the board of directors have in the highly unusual contracting decisions that were made at the non-profit?
For example, prior news stories said that the Ms. Hayward signed off on an almost $3 million management contract between options and EEMC, one of the firms controlled by the school's leaders. Another company received a $160,000 loan from the school. There was the million dollar transportation contract with her name on it, especially noteworthy because the prior year the same services cost $70,000. And don't forget that the executive director received an annual salary and bonuses worth $425,000.
I have been fortunate to be the board chair now at two D.C. charters. Something I initiated years ago was a review of all contracts worth $25,000 and above at each board meeting. Of course, the body also approved the annual budget and reviewed financial statements at every session.
So as the proceedings continue which could result in people doing time in jail I have to wonder what the board was doing when all of these transactions were initiated. Did they just go along with decisions made by the chair or was information hidden from their view? The answer may very well determine the course of non-profit charter school governance in the nation's capital.