Charter School Closing Following Financial Mismanagement

Tennessee's first charter school, Memphis Academy is set to close it's doors on 750 students next fall amid financial mismanagement.

By Rick Gonzales | Published 2 years ago

The Memphis Academy of Health Sciences has the distinction of being the very first charter school not only in the city of Memphis but in the entire state of Tennessee. Now, it also has the unfortunate distinction of being shut down. This closure was not precipitated by the pandemic, but instead by financial impropriety.

The closure of the charter school was announced after a unanimous vote by the newly formed Tennessee Public School Charter Commission (TPSCC) to reject the Memphis Academy’s appeal to be shut down. The Memphis Academy was appealing the Memphis-Shelby County school board’s decision to revoke its charter. This action was taken by the school board after an investigation led to the indictment of three former Memphis Academy leaders who are charged with stealing almost $400,000 from the charter school. The school will be allowed to remain open until the end of the school year.

“An authorized charter school is entrusted with significant fiduciary responsibility,” said Tess Stovall, executive director of the commission, via Chalkbeat. “It has to protect those funds and has to ensure that those funds are used in the best interest of students and the community.” Stovall agreed with the Memphis-Shelby County Schools’ decision, saying they were well within their rights to shutter the Memphis Academy given “such egregious acts of financial mismanagement and violations of the charter agreement.”

The Memphis Academy closure is not one that should be taken lightly, says Stovall, but one that should come as a lesson that any school, charter or public, that “betrays the public trust” by violating state law cannot and will not remain open. There were numerous students, parents, and school officials who went to bat for the charter school, but their pleas weren’t enough to sway the commissioners. Nearly 750 students and their families will be affected by the school shut down.

When the Memphis Academy first opened their doors in 2003, they were one classroom on the campus of an elementary school. They eventually expanded to two sites, going from one classroom to a full middle school, serving 6-8 graders. Five years later, in 2008, they established a high school that served 9-12 graders.

Understanding the significance of the Memphis Academy closure, a number of TPSCC commissioners were sympathetic to the plight of the kids. They say they will work closely with school district leaders to help find high-quality schools for the affected students to attend. But a Memphis-Shelby County Schools closure report revealed that most of the displaced students will have to attend schools with a much lower performance rating than Memphis Academy. The performance rating is a scale that looks at academics, college and career readiness, growth, and finally school climate.

“It does sadden me that the actions of a few have impacted these children,” said Commissioner Terrence Patterson. “But we also have to hold the adults accountable and because of these egregious actions, and despite a well-intentioned new governing board, we can’t take back these actions and the recommendation is in alignment with state record and law.”

In the fiscal year 2019, the state’s Comptroller of Treasury Office began to take a much closer look at the Memphis Academy’s financials. What they found was shocking. The comptroller’s December report showed that from 2015 to 2019, Corey Johnson, former executive director, and fellow former administrators Michael Jones and Robert Williams allegedly used school funds for trips to Las Vegas, NBA tickets, a hot tub, seafood, and auto repairs, among many other personal expenses. While their price tag hit nearly $400,000, the report found that the charter school misappropriated funds totaling almost $800,000.

In their appeal, Memphis Academy claimed they only learned of the former administrators’ wrongdoings when the investigation was launched and that they weren’t aware of the full extent of their crimes. School officials claim that after they understood just how serious the crimes were, the school board has put in place new policies and procedures to ensure better financial oversight. “Closing these schools now, in 2022, after the governing board made sweeping changes beginning in 2019, and which are operating without any issues, and performing much better than available neighborhood schools, only compounds the damage already done by these former employees,” Memphis Academy officials wrote in their statement. The damage, though, was already done.

“Those funds could have and should have been used for student benefit,” wrote Brittany Monda, assistant superintendent of charter schools overseeing the Memphis Academy. “The board did not have meaningful oversight of the school and failed to meet generally accepted standards of fiscal management. No plan of action could correct or address the mismanagement of funds that spanned over four years prior that allowed MAHS employees to operate to the detriment of MAHS.” Stovall agreed with the school district saying in her statement, “While I believe that the new governing board is well-intentioned in its desire to provide a quality education to its students, I cannot find that the decision of the local board of education is contrary to (state law) based on a totality of evidence.”

It’s sad when the actions of a few affect so many. Now, the future of the students of Memphis Academy is in doubt. Families are left scrambling to find the level of education the charter school was administering. Not only that but the teachers and officials who were not involved in the nefarious misdeeds will have to find employment elsewhere.