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Charter schools want to sever ties with management company

Newpoint Education Partners accused of theft, other crimes

JACKSONVILLE, Fla. – Two local charter schools want to sever ties from their management company, Newpoint Education Partners, which was indicted last month on charges of grand theft, money laundering and aggravated white-collar crime.

Over the last six months, Newpoint has operated charter schools in six counties and has withdrawn from its contracts voluntarily or been terminated by the school districts in four of those counties. The only two schools left under Newpoint management are in Jacksonville -- San Jose Academy and San Jose Preparatory High School.

San Jose Board Chair Bonnie Arnold and the schools' attorney, Gene Wheeler, decided Thursday night to get out of their five-year contract. The decision comes after the schools discovered they've possibly been paying interest on $235,000 worth of apparently non-existent loans from the management company.

"We've been in negotiations for a few days. There wasn't a decision made. We brought it to the board for them to move forward with a decision," Arnold said. 

Two weeks ago, Arnold told the News4Jax I-TEAM that the relationship with Newpoint was good and the indictment against the company in Escambia County didn't affect them. Then, after a public records request made by the media, the schools found out $235,000 in loans they've possibly been paying interest on don't exist, and the schools had a change of heart. 

"Because it's in the best interest of our school, our students, our staff and our community," Arnold said. 

Newpoint has been fronting the payroll, and the school pays them back. A month's payroll totals about $90,000 and San Jose Academy is a few payments behind, according to the board. San Jose Preparatory High School is current. 

Wheeler told the board Thursday evening that Newpoint wants them to pay back about $72,000 in management fees within the next 14 days, but the board doesn't believe it can afford that and keep the school doors open.

"I said, 'In other counties, there was a release without any payment of fees, much less double fees.' And his response was, 'The situation is different in Duval.' He didn't go into detail, but I would imagine the schools are doing better and that was the explanation," Wheeler said.

Another option Newpoint gave initially was to loan the school $100,000 and have the school pay a 6 percent interest rate for the next three years, and in exchange, the management contract would be done with. The board seemed OK with this idea, but the school would also have to announce the agreement publicly per Newpoints specific language. 

The board did not make any concrete decision on exactly what to do, but it is floating around the idea of having the current executive director at the school change roles and manage the company. The board wants to have a decision before the end of the month so it can move forward with its new management team.

The next meeting has been scheduled for 5:30 p.m. June 23. 

Charter schools paying interest on loans that don't exist?

Charter schools always have their own school board, but because they are receiving funds from the state government, public school districts oversee that the finances are being spent appropriately.

The Duval County School District told News4Jax it did an in-depth audit on both of the local schools and their finances after the indictment in Escambia County came down. The district said at the time that everything seemed to check out.

But that doesn't seem to be the case now.

After WFLA requested public records detailing the loans Newpoint Education Partners took out on the two Jacksonville schools, Wheeler said there were none. He also confirmed the schools' board of directors never approved any loans.

READ: San Jose Academy audit | San Jose Preparatory audit
(Note: Loans in question on pages 21-22 of audits)

Despite that fact, the loans are listed in the 2015 independent auditor report done by CPA firm King and Walker. According to San Jose Academy's audit, "the school borrowed funds from its management company, a related party through contractual obligation. All long-term debt represents amounts to be repaid from governmental activities."

As of June 30, 2014, the company said the school had borrowed $10,000 to cover costs of operations with a 5 percent annual interest.

The audit goes on to say that on June 30, 2015, the school borrowed $175,000 with a 6 percent annual interest.

For San Jose Preparatory, Newpoint stated that on June 30, 2014, the school borrowed $10,000 to "cover costs of operations" with a 5 percent annual interest rate.

On June 30, 2015, the company said the school borrowed $40,000 to "cover costs of operations" with a 6 percent annual interest rate.