Board Meeting Dates

Additional Details

Special Board of Education Meeting

AGENDA

Monday, May 20, 2013

7:30 AM

DeLayo-Martin Community Room, Alice and Bruce King Educational Complex, 6400 Uptown Blvd. NE

Albuquerque, New Mexico

Minutes of Special Board of Education meeting

Albuquerque Public Schools

A Special Board of Education meeting of Albuquerque Public Schools was held Monday, May 20, 2013, beginning at 7:30 a.m., in the DeLayo Martin Community Room, Alice and Bruce King Educational Complex, 6400 Uptown Blvd. NE.

I.      Call to Order

The meeting was called to order at 7:32 a.m.

A.     Roll Call

Present: Dr. Analee Maestas, Kathy Korte, Lorenzo Garcia, Martin Esquivel, Steven Michael Quezada, Dr. Don Duran, Dr. David Peercy

B.     Adoption of the May 20, 2013, Special Meeting Agenda (Discussion/Action)

Dr. David Peercy motioned to adopt the agenda.  Lorenzo Garcia seconded the motion.  Board members unanimously adopted the agenda.

II.     Special Issues

A.     Consideration for the Approval of the Administrative Recommendation for Suspension of the 21st Century Public Academy’s Governance Council and to request that the Superintendent direct the APS Finance department to assume the financial and budgetary responsibilities of the school (Discussion/Action)

Don Moya, chief financial officer, and Mark Tolley, charter schools director, explained that there have been serious concerns regarding the finances of the 21st Century Public Academy for several years. A recent call from the New Mexico Public Education Department (NMPED) expressing serious concerns with regard to the submission of the charter school’s FY14 budget prompted additional scrutiny by the Albuquerque Public Schools (APS) administration.  The past three annual financial audits all reflect a negative fund balance for the operational fund (2010, $-103,917; 2011, $-166,677, and 2012, $-188,427.)   In 2011, APS began monitoring the financial status of all of its locally-chartered charter schools. One of the metrics used to assess the fiscal performance and viability is liquidity, which measures how many months the unassigned operational fund balance would be able to support monthly operating expenses per the year-end financial statements.  Since the monitoring began, 21st Century Public Academy has shown negative liquidity for three consecutive years indicating insufficient cash to cover its obligations.  The liquidity measure was -.9 in 2011, -1.1 in 2012, and -1.4 in 2013.

The statutory structure governing the operations of charter schools confers considerable budgetary authority and autonomy upon a chartering authority.  Inherent with that authority is the responsibility for the consequences of weak financial controls and charter school decisions that diminish public confidence in the integrity of the leadership of a charter school.   The legislature has, however, provided a host of mechanisms that may be invoked should a charter school fail to meet its statutory responsibilities.  These mechanisms include the authority granted to a chartering authority to suspend a charter if a charter school “...failed to meet generally accepted standards of fiscal management” [Sections 22-8B-5 and 22-8B-12 NMSA 1978].

Mr. Moya requested that board members approve the suspension of the charter of the 21st Century Public Academy with the authority granted Albuquerque Public Schools (APS) as the chartering authority.  This action will direct  Mr. Brooks, as the APS Superintendent to take the following actions:

1. Immediately take control of all public school funds under the control of the governing board of the 21st Century Public Academy.
2. APS will act as the fiscal agent for the 21st Century Public Academy and will take any action necessary to bring the fiscal management of its funds into strict compliance and with requirements of law and generally accepted accounting practices.
3. Any violations will be reported to the proper agencies or authorities, including law enforcement or prosecutorial authorities, if criminal activity is suspected.
4. The charter will remain suspended until such time as is determined that the governing board and the administration are capable of fulfilling their fiduciary responsibilities.

Superintendent Brooks reiterated that this action is a suspension, not a revocation of the charter.

Issues discussed regarding agenda item:

• Achieving fiscal responsibility and compliance will require tough decisions
• What options does NMPED have to take over a charter school authorized by APS?
• What options does NMPED have to take over a charter school authorized by APS if they are not satisfied with the decision APS has made?
• Request reporting from the school of how the school’s financial condition progressed to its current status
• Low student-to-teacher ratio, decreasing revenue due to limiting facility size, moving expenses and rental costs led to transferring funds to cover the lack of funding to pay for summer payroll
• Revenue based on the number of students registered for this upcoming year is expected to cover costs
• Concern about acquisition of instructional materials
• Suspension to help ensure fiscal stability and propriety
• Changes may affect academic program if personnel needs to be cut to balance budget
• Importance of understanding that expected revenue cannot be used to pay current year debt
• Availability of NMPED emergency supplemental funding
• Recommendation to review all charter schools for potential fiscal difficulties
• Legislation does not clarify how to rectify this particular situation
• Potentially illegal and unethical fiscal decisions were made using funds inappropriately by transferring the funds between accounts without proper approval
• Were the transfers of funds approved by the charter school’s governing council?
• Chartering authorities are put into a difficult situation when charter school errors create qualified audit reports
• Importance of taking swift and decisive action now to provide support to save the school
• Recommend offering charter schools fiscal education, especially those at risk
• Concern about the difficulty finding qualified people to serve on governing boards
• Minimum of at least a year to create a plan to ensure fiscal education and plan implementation
• Request for regular reporting, which will be done through the Finance Committee meeting

Lorenzo Garcia motioned to approve the suspension.  Analee Maestas seconded the motion. Board members unanimously approved the administrative recommendation for suspension of the 21st Century Public Academy’s Governance Council and to request that the superintendent direct the APS Finance Department to assume the financial and budgetary responsibilities of the school.

III.    Superintendent Report

Superintendent Brooks reported on the following:

• Recognition of Judy Bergs’ excellent work as the charter school business manager
• Consideration for providing more staffing to support Ms. Bergs
• Appreciation for board members dedicating time to attend graduations
• Appreciation for the respectful and considerate graduates

IV.    Board Reports

Board members had no further comments.

V.     Announcement of Upcoming Board Meetings

President Esquivel announced that the next Special Board of Education meeting will be held on Wednesday, May 22, 2013, at 5:30 p.m. or immediately following the District and Community Relations Committee meeting, in the DeLayo Martin Community Room and the next Board of Education meeting will be Wednesday, June 5, 2013, at 5:00 p.m., in the John Milne Community Board Room.

VI.    Adjournment

The meeting adjourned at 8:32 a.m.

APPROVED: ____________________________

Martin Esquivel, President

ATTEST: __________________________________

Steven Michael Quezada, Secretary