PERFORMANCE AUDIT ____________ Infinity Charter School Dauphin County, Pennsylvania ____________ October 2015 Ms. Suzanne Gausman, Director/CEO Ms. Michelle Coleman, Board President Infinity Charter School Infinity Charter School 51 Banks Street 51 Banks Street Harrisburg, Pennsylvania 17103 Harrisburg, Pennsylvania 17103 Dear Ms. Gausman and Ms. Coleman: We conducted a performance audit of the Infinity Charter School (Charter School) to determine its compliance with certain relevant state laws, regulations, contracts, grant requirements, and administrative procedures (relevant requirements). We also evaluated the application of best practices in the area of school safety. Our audit covered the period October 1, 2010 through October 31, 2014, except as otherwise indicated in the report. Additionally, compliance specific to state subsidies and reimbursements was determined for the school years ended June 30, 2009, 2010, 2011, and 2012. Our audit was conducted pursuant to Section 403 of The Fiscal Code, 72 P.S. § 403, and in accordance with Government Auditing Standards issued by the Comptroller General of the United States. Our audit found that the Charter School complied, in all significant respects, with relevant requirements, except as detailed in the one finding noted in this report. In addition, we identified one matter unrelated to compliance that is reported as an observation. A summary of the results is presented in the Executive Summary section of the audit report. Our audit finding, observation, and recommendations have been discussed with the Charter School’s management, and their responses are included in the audit report. We believe the implementation of our recommendations will improve the Charter School’s operations and facilitate compliance with legal and administrative requirements. We appreciate the Charter School’s cooperation during the conduct of the audit. Sincerely, Eugene A. DePasquale October 15, 2015 Auditor General cc: INFINITY CHARTER SCHOOL Board of Trustees Table of Contents Page Executive Summary .................................................................................................................... 1 Background Information on Pennsylvania Charter Schools ....................................................... 3 Audit Scope, Objectives, and Methodology ............................................................................... 6 Findings and Observations .......................................................................................................... 12 Finding – The Charter School Modified Its Enrollment Preferences in Noncompliance with the Charter School Law ............................................... 12 Observation – Legal Fees of $17,273 Were Incurred Due to the Lack of a Detailed Separation Clause in an Administrative Contract .................... 14 Status of Prior Audit Findings and Observations ....................................................................... 17 Distribution List .......................................................................................................................... 20 Executive Summary Audit Work Further Background The Pennsylvania Department of the During the 2013-14 school year, the Charter Auditor General conducted a performance School provided educational services to audit of the Charter School. Our audit 124 pupils from 14 sending school districts sought to answer certain questions regarding through the employment of 11 teachers, the Charter School’s application of best 7 full-time and part-time support personnel, practices and compliance with certain and 1 administrator. The Charter School relevant state laws, regulations, contracts, received $1.1 million in tuition payments grant requirements, and administrative from school districts required to pay for procedures and to determine the status of their students attending the Charter School corrective action taken by the Charter in the 2013-14 school year. School in response to our prior audit recommendations. Academic Performance Our audit scope covered the period The Charter School’s academic performance October 1, 2010 through October 31, 2014, as measured by its School Performance except as otherwise indicated in the audit Profile (SPP) score was an 89.9 percent in scope, objectives, and methodology section the 2012-13 school year. SPP is the of the report. Compliance specific to state Pennsylvania Department of Education’s subsidies and reimbursements was (PDE) current method of providing a determined for the 2008-09, 2009-10, quantitative, academic score based upon a 2010-11, and 2011-12 school years. 100-point scale for all public schools. A score of 89.9 percent would be considered a Charter School Background “B+” if using a letter grade system. Weighted data factors included in the SPP The Charter School, located in Dauphin score are indicators of academic County, Pennsylvania, opened in achievement, indicators of closing the August 2003. It was originally chartered on achievement gap, indicators of academic January 17, 2003, for a period of five years growth, and other academic indicators such by the Central Dauphin School District. as attendance and graduation rates. Charter School’s Mission Statement Previously, the Charter School made Adequate Yearly Progress (AYP) for the The Charter School’s mission states: “Our 2011-12 school year. mission is the creation, operation, and maintenance of a world-class charter school AYP was a key measure of school in the Central Dauphin School District that performance established by the federal No addresses the intellectual, academic and Child Left Behind Act (NCLB) of 2001 social-emotional needs of mentally gifted requiring that all students reach proficiency children in grades K-12.” (Note: the charter in Reading and Math by 2014. For a school school provides education to pupils in to meet AYP measures, students in the grades K-8). school needed to meet goals or targets in Infinity Charter School Performance Audit 1 three areas: (1) Attendance (for schools that preferences at a meeting on do not have a graduating class) or February 14, 2013, to be effective starting Graduation (for schools that have a high with the 2013-14 school year. The school graduating class), (2) Academic modification gives first preference to “all Performance, which is based on tested eligible applicants who are children or students’ performance on the Pennsylvania grandchildren of the Charter School System of School Assessment (PSSA), and employees or Board.” This change in (3) Test Participation, which is based on the preference was in noncompliance with the number of students that participate in the Charter School Law (CSL). In addition, the PSSA. Schools were evaluated for test Charter School failed to notify the chartering performance and test participation for all school district, Central Dauphin School students in the tested grades (3-8 and 11) in District, about the change in enrollment the school. AYP measures determined preferences (see page 12). whether a school was making sufficient annual progress towards statewide Observation: Legal Fees of $17,273 Were proficiency goals. On August 20, 2013, Incurred Due to the Lack of A Detailed Pennsylvania was granted a waiver from the Separation Clause in an Administrative NCLB’s requirement of achieving Contract. The Board terminated the 100 percent proficiency in Reading and Curriculum Director prior to the fulfillment Math by 2014, so AYP measures were of the employment contract because written discontinued beginning with the 2012-13 and verbal directives were not adhered to or school year.1 being followed by the Curriculum Director. An out-of-court settlement was reached, Audit Conclusion and Results which was covered by the Charter School’s insurance company. However, the Charter Our audit found that the Charter School School incurred $17,273 in legal expenses applied best practices and complied, in all that were not covered by their insurance significant respects, with certain relevant company (see page 15). state laws, regulations, contracts, grant requirements, and administrative Status of Prior Audit Findings and procedures, except for one compliance Observations. With regard to the status of related matter reported as a finding. In our prior audit recommendations, we found addition, we identified one matter unrelated the Charter School had taken appropriate to compliance that is reported as an corrective action in implementing our observation. recommendations pertaining to Memorandums of Understanding (MOU) Finding: The Charter School Modified Its (see page 17) and Supplemental Contract Enrollment Preferences in Noncompliance Payments (see page 18). with the Charter School Law. The Board of Trustees (Board) approved a modification to the Charter School’s enrollment 1 In February 2013, Pennsylvania was one of many states that applied for flexibility from NCLB standards, which was granted by the U.S. Department of Education on August 20, 2013. The waiver eliminates AYP for all public schools and replaces it with a federal accountability system specific to Title I schools only (those with a high percentage of low-income students), which identifies Title I schools as “Priority,” “Focus,” “Reward,” or “No Designation” schools. Beginning in 2012-13, all public school buildings received a SPP score. Infinity Charter School Performance Audit 2 Background Information on Pennsylvania Charter Schools Pennsylvania Charter School Law Description of Pennsylvania Charter Schools: Pennsylvania’s