PW exclusive: State Board of Ed urged to jettison firm hired as part of controversial Innovative School District scheme

A confidential letter delivered to the State Board of Education alleges that the school management firm Achievement for All Children has failed to meet its contractual obligations in running Southside-Ashpole Elementary, to the detriment of its students.

The letter, obtained by Policy Watch, recommends that state education officials terminate the contract — three years early — under which the firm oversees Southside-Ashpole, the lone school in the state’s controversial Innovative School District.

A private nonprofit corporation, AAC was hired by the State Board of Education less than a year ago to manage the low-performing school in the Robeson County town of Rowland.

Although the matter is not on the SBE meeting agenda this week, the board could still discuss it in closed session.

Dated May 5, the unsigned letter, “Prepared at the Direction of Counsel for the Provision of Legal Advice,” is addressed to Board Chairman Eric Davis and the 14-member board.

The letter cites numerous instances in which Achievement for All Children allegedly failed to meet deadlines for reports that are contractually mandated. The firm reportedly failed to submit a proposed budget due May 1 and an annual financial audit that was due Oct. 15, 2019. Nor, says the letter, did AAC submit a compliance report for the district’s Exceptional Children’s Program or make requested corrections to COVID-19 staff work logs.

Former State Rep. Tricia Cotham, a Democrat from Charlotte, who served in the state legislature from March 2007 to January 2017, is president of AAC. She has not returned calls from Policy Watch seeking an interview.

The letter also cited previous correspondence, sent in February, to the SBE that raised concerns about three areas of AAC’s management of Southside-Ashpole: 

• a lack of progress in the adoption and implementation of rigorous academic and instructional programs; 
• a refusal to provide regular and required status updates and data reports; and
• a failure to provide teachers with a professional development plan.

“AAC has failed to meet their contractual obligations in all three areas highlighted in the Feb. 13 letter,” the letter’s author wrote. “In that Provision 11.1 [of the MOA] states, failure to submit reports or documentations may be ground for termination of the Agreement, it is recommended that the contract is terminated within 60 days.”

The contract between AAC and ISD is scheduled to expire June 30, 2023.

Already a controversial subject

The state legislature created the ISD in 2016 to allow private operators to take control of consistently low-performing public schools. Originally referred to as “achievement school districts,” ISDs have been controversial — both in North Carolina and in other states — and the rift over the management of Southside-Ashpole appears to lend credence to criticism about their lack of transparency.

It’s harder to for people outside the districts to monitor for fraud, waste and abuse, say critics, because public money and decision-making authority are transferred to charter school operators that are not directly accountable to taxpayers.

Two years ago, when the State Board of Education hired AAC to manage Southside-Ashpole, some board members, including then-vice chairman Davis, doubted whether AAC was a good choice because the firm had little experience turning around low-performing schools or working with at-risk children. “I think (students) deserve better,” Davis was reported saying at the time. “They deserve an operator with a demonstrated track record.”

A year later, state accountability data showed students at Southside-Ashpole had made few academic gains, with the exception of improvements in third-grade math. The school received a state performance grade of “F” and did not meet expected growth.

The Master Operator Agreement between AAC and the Innovative School District allows the superintendent to recommend terminating the contract if the operator does not meet its terms. These include inadequate academic performance, financial mismanagement, noncompliance with federal or state laws, failure to comply with the terms of the contract, or evidence or criminal activity.

It may also be terminated if the management firm and SBE mutually agree to part ways.

ISD Superintendent James Ellerbe declined to comment on the letter when reached last week. The North Carolina Department of Public Instruction hired Ellerbe a year ago to replace LaTessa Allen, who left suddenly and without explanation.

Principal disputes allegations

Southside-Ashpole Principal Kenneth Bowen, who was hired and is employed by Achievement for All Children, denied the charges in the letter. “That’s inaccurate, that’s an untruthful statement,” Bowen said. However, Bowen provided no documents to refute the claims.

Bowen contends Ellerbe wants to preserve ISD jobs by getting rid of the management agency, to which the state pays $100,000 a year for its services. But Bowen said money spent on ISD staffers would be put to better use at Southside-Ashpole.

“Ultimately, you don’t need a district office,” Bowen said. “You need one person at the State Department [of Public Instruction] to serve as a liaison if you have a management firm. [ISD] has five people working full-time for one school.”

Bowen acknowledged that he has had a contentious relationship with Ellerbe. Bowen claims Ellerbe offered him a $15,000 pay increase to leave Achievement for All Children to go to work for the ISD. Bowen earns $100,000 a year as the school’s principal; Ellerbe’s salary is $142,558.

“When I wouldn’t do it, that’s when things went south,” Bowen said.

It’s likely that if the contract with Achievement for All Children is terminated, Bowen will be out of a job.  “I’m not going to work for James Ellerbe unless the State Board [of Education] do a major [leadership] overhaul with ISD,” Bowen said.

A fraught and complex history

Mecklenburg County Republican Senator Rob Bryan sponsored the bill as a member of the House in 2016 that became law and created the ISD. That law specifies that the ISD can have up to five schools, selected from the lowest-performing in North Carolina.

Bryan argued at the time that the new district would provide much-needed reforms, but the following year, as Policy Watch reported, he received at least $5,000 as a “stipend” for his work with AAC.

Several other low-performing schools, including two in Durham, were targeted for state takeover in 2017, but resisted the move. Then-ISD Superintendent Eric Hall ended his pursuit of those schools.

That left Southside-Ashpole, which began operating as the state’s first and only school within the Innovative School District at the start of the 2018-19 school year. Southside-Ashpole has an enrollment of 270, 95% of whom are students of color: Black, Latinx and American Indian.

In its first year as an ISD school, there was a wholesale house cleaning at Southside-Ashpole: After Superintendent Allen abruptly left, the State Board of Education hired Ellerbe to replace her. School principal Bruce Major also suddenly resigned, and AAC then hired Bowen.

It remains unclear whether the changes were due to job performance.

Meanwhile, there has also been a major upheaval within AAC’s business partner, TeamCFA, a Charlotte-based nonprofit that provides financial, instructional and management support to more than a dozen schools in North Carolina and four in Arizona.

TeamCFA is AAC’s curriculum partner, according to the ISD website.

Tony Helton, one of the state’s most influential charter school leaders, resigned his $160,000-a-year post as southeastern regional director of TeamCFA last August. While holding that position, Helton also worked as chief operating office of AAC. He was replaced by Cotham.

TeamCFA was started by John Bryan (no relation to Rob Bryan), a retired Oregon businessman who has used his wealth to promote school choice causes.

John Bryan is also a major contributor to Republican lawmakers and was instrumental in helping to pass the North Carolina law that created the ISD. From 2013 to 2016, Rob Bryan’s campaign received more than $22,000 in contributions from John Bryan, state reports show. John Bryan also contributed to then-Gov. Pat McCrory, Lt. Gov. Dan Forest, NC House Speaker Tim Moore and Senate President Pro Tem Phil Berger.

Raleigh’s News & Observer reported in October that Bryan and the Challenge Foundation, which Bryan also formed, stopped funding TeamCFA. In his final founder’s letter, Bryan talked about passing on the responsibility to other private investors and philanthropists.

TeamCFA had received as much as 95% of its annual revenue from Bryan and the Challenge Foundation, the paper reported. TeamCFA also receives $510,000 annually from the Charles Koch Foundation.