Rocky Mount charter school faces closure due to more than $800,000 in unexplained expenditures

A charter school in Rocky Mount is facing closure due to poor academic performance and concerns over more than $804,000 in unexplained expenses.

The Charter School Advisory Board (CSAB) placed Rocky Mount Preparatory Academy on notice Friday that its future isn’t promised if school leaders aren’t able to show how the money was spent.

“Rocky Mount Prep is 25 years-old and should not be having the issues that you’re having right now,” said CSAB member Stephen Gay. “You need to fix it, or we’re going to close you.”

School leaders claimed they only learned about the unexplained expenditures recently. The NC Department of Public Instruction’s Monitoring and Compliance Section discovered it during a fiscal review of the school.

“If the organization is unable to reconcile the journal entries to the detailed transactions and provide the supporting documentation the school will be required to repay the questioned costs that cannot be substantiated,” the NCDPI reviewers wrote.

Rocky Mount Prep has been given until Nov. 2 to implement corrective actions, identify the $804,000 in unaccounted transactions and to provide the “corresponding supporting payment documentation to include copies of checks, timesheets, and semi-certifications, as applicable.”

Under questioning by CSAB, Keen Gravely, chairman of the school’s board of directors, said that he was unaware of the financial discrepancies until he received NCDPI’s letter, which is dated Aug. 8.

“When I got that letter, my mouth dropped,” Gravely said. “We have never had a compliance issue in the past. This was a shock to us.”

Gravely told the board that the school has more than $2.35 million in its bank account to begin to address the school’s academic shorting comings.

CSAB Chairman Bruce Friend said that he finds it “really surprising that the board doesn’t know about the financial situation.”

The financial trouble couldn’t have come at a worse time for Rocky Mount Prep. Last year, the state board only renewed it’s charter for three years. Schools with academic problems and fiscal and operational shortcomings receive limited renewals. Charters can be renewed for up to 10 years when schools are performing as they should. Rocky Mount Prep has received  three consecutive three year renewals.

Gravely explained that the school has had several leadership changes, turnover in its internal accountant department. The school also changed accounting firms last year, he said.

The school’s board has adopted a more transparent reporting process for its monthly meetings, Gravely said.

“As a board, we acknowledge that at times, we’ve trusted previous leadership without requiring consistent, transparent reporting to verify that planning and action steps were being followed,” Gravely said.“We own those mistakes.”

School leaders met with CSAB on Friday to present a school improvement plan the state board required as part of its three-year charter renewal. One of the requirements is that the school must not have any financial compliance warnings.

If the school’s financial problems aren’t resolved by Nov. 2, the school could have its charter revoked.

“We would be in position where next year at this time, [deciding between] letting them ride out their three-year charter or we’ll be talking about revocation immediately,” Friend said.

The school must also comply with legal requirements in the delivery of educational services and comply with federal laws that govern the education of exceptional children.

Apprentice Academy and Monroe Charter Academy, both in Monroe, and Paul R. Brown Leadership Academy in Elizabethtown, are also operating under three-year charters and presented school improvement plans to CSAB on Friday.

The charter board ruled Apprentice Academy’s plan to be insufficient but agreed to allow the school to submit a revised plan in October. The board declined to approve Monroe Charter’s plan, declaring it incomplete.

Meanwhile, Paul R. Brown’s improvement plan was approved.