Jennifer Nagourney: Academy of Dover opened in 2003 and currently serves K

through 5 in Dover with approved enrollment of 300 students for the 2015-2016
school year. The Department of Education has learned about potentially serious
allegations of financial mismanagement by the former school leader of Academy of
Dover. These issues came to light during an independent audit process and are
currently under review by the State Auditors office. This raises concerns about
Academy of Dovers financial management practices. The Department also has
concerns about the Citizens Budget Oversight Committee. It is unclear whether the
school has established a CBOC or if the group is meeting, and if so, how the group
reviews the schools finances. The Department has also learned about ongoing
litigation that raises concern about the charter schools financial viability.
Additionally, Academy of Dovers 2013-2014 academic overall rating of does not
meet standard and an overall score of 55.3% raises strong concerns about its
academic performance. This years overall score is nearly 12 points below the prior
years score of 67.2%. Finally, all of these concerns raise questions about the
capacity of Academy of Dovers Board of Directors to oversee a charter that is
academically successful, organizationally sound, and financially solvent.
Mark Murphy: The concerns about Academy of Dovers financial management,
financial oversight, board capacity and academic performance demands a rigorous
review. In accordance with 14 Delaware Code Section 511c, I seek the assent of the
State Board of Education to decision to place this charter school on Formal Review.
Dr. Terri Quinn Gray: DOE requests the assent of the State Board of Education to
place Academy of Dover on Formal Review. Is there a motion to consent to placing
Academy of Dover on Formal Review?
Patrick Heffernan: So moved.
Dr. Whitaker: Second.
Gray: Any questions or comments?
Heffernan: Yes, so how did we, how did we start unravelling THIS thing? Was it a
part of our standard reporting and auditing thing or did someone, you know, drop a
dime or something cause it seems like sometimes its the latter and you know, as
they come up more and more Im thinking maybe there needs to be something else
to be checking over more deeply.
Nagourney: In this case, a little bit of both. The Citizens Budget Oversight
Committee and Academy of Dovers conversation last summer about ongoing
management concerns. After that, kind of while the independent audit process was
underway, we learned that their independent auditor flagged some issues for the
State Auditor and investigation was ongoing.
Heffernan: So how do we, are we, Im not sure how to word this, do we work in
conjunction with the State Auditor? Who calls them in? Do we look at stuff
together?

Nagourney: Thats kind of one of the points of the process of working this out before
bringing it to you. The state auditors investigation is completely separate. We
recently received clarification that we can request information from Academy of
Dover without interrupting their process. That is, through this review thats what we
intend to do.
Heffernan: And then, but we, hopefully we would review whatever it is the State
Auditor uncovers as data for our analysis. I mean, sometimes it should be
duplicated, sometimes it shouldnt. I dont know. Ill leave that up to you guys, but
uhm
Nagourney: The State Auditors office, this has been an ongoing investigation.
Weve been in touch and tried to get updates on when the report will be delivered.
Current estimate is May to late May. So we are not sure when this report will be
received. And a number of concerns, we need to take action now.
Gray: I dont recall, maybe its an oversight, I dont recall Academy of Dover being
flagged for us during last years, uhm, overall charter review process. So the
investigation has been going on how long?
Nagourney: Since the summer. Around Labor Day. They have not yet turned in their
independent audit. It has not been completed. Their independent auditor
suspended work pending the outcome of the State Auditors investigation so we
dont have a financial framework report that would have raised an official flag.
Rutt: When is the last independent audit that we did have? Two years ago?
Nagourney: It would be for 2012-2013.
Heffernan: And this independent audit is a consistent thing, its a standard process?
Thats what Im trying to understand.
Nagourney: It is required by charter schools, yes.
Gray: And that one was okay in 2013? So weve been looking at that report, or that
view?
David Blowman: One of the challenges we have, with getting to it slightly more
often, is that our timelines around our formal processes dont necessarily align with
the timelines of other agencies doing work on a similar, on an ostensibly similar
issue. So that in and of itself, thats challenging to do.
Donna Johnson: Their audit for 13-14 was due November 1 st?
Gray: Last year?
Nagourney: November 1st, 2014.
Heffernan: So they stopped?
Nagourney: The audit was suspended.
Heffernan: This fall.

Barbara Rutt: Was is it the same audit firm that would have done 12-13? They did
not change private firms mid-stream, correct. That firm chose to stop their work.
Johnson: And this audit firm turned that audit into the (State) Auditors office.
Nagourney: Thats my understanding. All materials were turned over to the State
Auditors office. Academy of Dover has turned over any requested material to the
State Auditors office directly.
Heffernan: So Im just trying to understand what is, so so I get it, theres a schedule
for a standard audit, the process, good thing. They found something and then they
called in the State Auditor because of what they found, or
Nagourney: Thats correct, yes. And we learned about the issue after the State
Auditor as part of this report.
Rutt: Did the Academy have a due date, how did we learn about this? Did we learn
about it through the State Auditor or did the Academy alert us to the fact that this
was even worse?
Nagourney: There were, Ill have to go back and check my records on that and we
can enter that as part of the record for the process.
Rutt: It is a good faith thing that as soon as they know
Nagourney: The Board has been in contact with us and has been forthcoming and
indicated its willingness to share materials with us. This came about around the
time Noel Rodriguez resigned as school leader and concerns were flagged as part of
our questions to that process.
Hughes: So it sounds that it wasnt something that was an issue prior to this last
independent audit. Its something that occurred after the fact.
Heffernan: Well, I mean, so I guess we need to wait to see what it all says, right,
because we had another recent incident where the audit was okay, right, there was
still shady stuff going on. The formal audit is looking at a very specific thing, uhm
right, just like money coming in and out, not necessarily what the moneys being
spent on, for example. So we should probably just reserve our judgment until we
get more facts.
Hughes: We have to. The one thing, going back to Blowmans comment was that,
within the state of different silos and working independently and not in conjunction
sometimes, that can be a hindrance, so that needs to be worked out.
Nagourney: Thats something weve been in ongoing communication with the
auditors office over. Over the last couple months weve established, is that we
have, kind of, related, but separate responsibilities. Theyre looking at financial
management with respect to the laws of the state. (next part is Nagourney and
Hughes talking over each other).
Hughes: I can see that. I can see where they need to do their independent, their
independent where the mingling of information that could hinder if it, if it goes to a

trial. But the aspect is of if information is being checked into a red flag that there
needs to be communication and there needs to be a better job done as to working
together to resolve the matter.
Johnson: So Academy of Dover notified the Charter School Office and then you did
the due diligence with the Auditors office in following up why their independent
audit hadnt been filed?
Nagourney: Ill have to go back and double-check the email chains. Theres a lot of
activity around the time the resignation and that a lot of red flags came up,
information came. I have to go back and check the exact sequence.
Heffernan: You said something about governance and a lawsuit. That sounds a little
bit more deep than the audit thing.
Rutt: When did you become aware of
Nagourney: Theres ongoing litigation that might affect the schools financial
picture. So we also have concerns about the financial picture.
Gray: To put this in perspective, this is a motion to put them on Formal Review to
investigate all these questions surrounding the irregularities, so right now the
answers arent there but after formal review they will be. So how many students at
Academy of Dover?
Nagourney: I believe 300.
Gray: Alright, any other questions? The motion on the floor is to place Academy of
Dover on Formal Review. All in favor, indicate by saying aye.
State Board: Aye
Gray: Any opposed? (silence) Abstentions? (silence) The motion carries.