Audit: Dallas charters misused state funds; Exclusive: Schools continue to get taxpayers’ money despite problems

By Joshua Benton
Staff Writer

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A state audit has found rampant financial mismanagement at three family-run Dallas charter schools – including fictional renovations, imaginary travel and hundreds of thousands of dollars unaccounted for.

The Texas Education Agency has forwarded its findings to the Dallas County district attorney’s office for possible prosecution. Federal regulators have also been notified.

The schools – A+ Academy in Dallas and two Inspired Visions Academy campuses in Dallas and Mesquite – were founded by Don and Karen Belknap. They have been the target of numerous state audits and investigations into allegations of nepotism, sloppy record-keeping and loose financial controls.

But they continue to receive taxpayer funding: well over $38 million in the last eight years. Charter schools are funded by tax dollars, but they are managed by private organizations and lightly regulated by the state.

“It’s some of the most mismanaged, unorganized, unethical business practices I’ve ever come across,” said Laura Kopec, a teacher at A+ Academy who resigned last week after the school tried to cut her pay midyear.

“I’m 40 years old. I’ve been in schools and in business. I’ve run a nonprofit. And I’ve never seen anything like this.”

Along with the allegations turned up in the audit, the schools face debt of about $500,000. That’s down from the roughly $1 million in debt they faced in November, when a former TEA official stepped in as interim superintendent.

“The records were in disarray when we got here,” said Karen Case, the former TEA official. “I think we’ve accomplished a lot in a few months.”

Messages left at the Belknaps’ home were not returned Thursday night.

Who’s to blame?

Many of the most serious allegations in the new audit involve Tommy Thomas, who was the schools’ superintendent for slightly over a year until last October. The audit raises concerns that he may have abused his position through a fraudulent reimbursement scheme. Among the findings of the audit:

*Mr. Thomas received more than $40,000 in “travel allowances” over a single school year. The allowances were never approved by the charter schools’ board, auditors found, and Mr. Thomas did not provide “adequate documentation” he had actually spent the money.

*Mr. Thomas ordered his business staff to cut him a check for more than $17,000 for “certification stipends.” According to his contract, he was due no such stipends.

*Mr. Thomas’ wife – now ex-wife – is alleged to have received payments from the charter schools totaling $124,000 over a 13-month period. She also was appointed to the schools’ board, in apparent violation of nepotism rules.

*Mr. Thomas was reimbursed more than $2,500 for furniture and the renovation of his office at the El Paso School of Excellence, a sister school run by the Belknaps. But that school’s founder, J.L. Lewis, says there is no such office.

“Mr. Tommy Thomas has never invested even one cent to renovate any office at the El Paso School of Excellence,” Dr. Lewis wrote in a signed affidavit in November.

Mr. Thomas disputed the charges Thursday night. He said the travel and certification allowances were part of his negotiated compensation packages and approved by the Belknaps. The office renovations were real, he said. And his ex-wife was hired by an assistant superintendent without his intervention, he said.

He said he is being made a scapegoat for the sins of the schools’ founders.

“The Belknaps are good people – they have good intentions,” he said. “They’re just not very good at what they do. They have no idea how to run a school.”

The Belknaps had previously run the school more directly – Mr. Belknap was superintendent, Mrs. Belknap was a principal, and numerous other family members and friends were on the payroll. Over time, state officials forced them to take a less formal leadership role. The Belknaps are currently assistant superintendents, and Mr. Belknap’s son is chairman of the board.

“With the Belknaps, even when they tell you you’re in charge, you never really are,” Mr. Thomas said. “Any corrections I would ask them to make, they’d do it up front. But they would never follow through and actually change the policy. They’d work on things in a roundabout way – that’s their way.”

Mr. Thomas said he believed the schools should be permanently closed.

Additional findings

Some of the other findings in the audit:

*One of the two Inspired Visions campuses was moved to a new facility last fall, but apparently without proper permission from state officials. That could force the school to repay most of its state funding for the first few weeks of the school year.

*The organization that officially oversees the charter schools, RFFA Inc., improperly repaid a $200,000 debt of its since-closed charter school, Rylie Faith Family Academy. The money was provided with taxpayer-provided funds from the family’s other charter schools, which the audit found was an “inappropriate use” of those funds.

*The schools regularly commingled funds between accounts and had only limited control of spending – including the use of presigned blank checks to pay bills when they came up.

*The Belknaps’ family church operated out of the schools’ administration building on Military Parkway and did not pay for the space or utilities – despite demands by the TEA in 2004 that the church pay those bills.

Making changes

Dr. Case, the former TEA official, said she and other staffers have been trying to cut into the debt by ending all unnecessary expenses and getting an outside audit of the schools’ finances. “We need electricity, and we buy toilet paper – that’s about it,” she said.

Among the proposed cuts was the midyear elimination of stipends teachers receive for extra work, like coaching a sports team or running the drama program. After teachers reacted negatively last week, however, those cuts were reversed.

The state’s investigative audit requires a number of actions, including paying back some of the funds in question and accepting a state financial overseer.

Despite the schools’ regular trouble, A+ Academy and Inspired Visions have never been seriously threatened with closure. State law places strict limits on TEA’s ability to close even the worst charter schools.

Dr. Case said that the audit’s findings should, again, not limit the schools’ ability to continue operations.

“I’m confident we’ll be open again in the fall,” she said.