Charter school appeal of $1M fine denied
State turns down second appeal of public bid violation
BY LAYLI WHYTE
Staff Writer

The Red Bank Charter School’s second appeal of a $1 million fine has been denied by the state Department of Education (DOE).

According to Jay Doolan, assistant commissioner for the Division of Educational Programs and Assessment at the DOE, the school’s most recent appeal was denied by Chief of Staff Penelope Lattimer on Jan. 19.

The $1 million fine was imposed by the DOE’s Office of Compliance Investigation (OCI) last spring after an investigation found the school to be in violation of the state’s public bidding law.

The investigation was triggered when dissident members of the school’s board of trustees asked the DOE to look into the financial status of the school.

Last October, OCI denied the charter school’s initial appeal of the fine. Investigators found that although the Red Bank Charter School Foundation contracted for the construction of the school’s Oakland Street campus, the school and foundation are one entity and the debt for the work was transferred to the school.

“If the foundation paid for the charges,” the OCI report said, “it would not be subject to bid. However, the foundation assigned the debt to the school. The school is paying all the bills for the construction. Therefore, it is subject to bidding laws. The Department of Education is not responsible for monitoring ongoing school construction projects. It is the responsibility of the school district or charter school to adhere to laws and regulations governing schools.”

In its appeal the charter school had argued that former board President Michael Stasi and former board Treasurer Gayle Horvath managed the construction project. However the OCI response to the appeal stated that the board had knowledge of the progress of construction and could have taken action at any public meetings of the board.

The school, which has 162 students in grades K-8, also claimed that the fine is too high, and could not be met by the school.

The board’s appeal additionally claimed that the school did not knowingly violate the Public School Contracts Law because the board’s former attorney allegedly counseled the board that since the foundation was doing the construction and it was a private and separate entity, the project did not have to go out to public bid.

Rochelle Hendricks, director of the Office of Vocational/Technical, Career and Innovative Programs, which oversees charter schools at the DOE under Doolan, said in an interview earlier this week that the school is in good fiscal health.

“The school is operating under a fully balanced budget,” she said, adding that the annual audit the school underwent this past November did not show any major fiscal problems.

“The school is solid and successful,” she said.

Doolan said that, following the latest denial of its appeal, the charter school has two options.

“The school can either appeal the denial to the commissioner of education,” he said, “or they can work with us to repay the fine.”

Doolan said that if the school chooses to work with the department to pay the fine, the department would devise a payment plan that would work within the school’s budgetary constraints.

“They have to determine a course of action,” he said.

The charter school board’s next regular meeting is scheduled for Feb. 8 at 7 p.m.

Hendricks said that because of the issues raised about the charter school over the past year, the DOE is being vigilant about keeping track of the progress of the school and its students.

“Our commitment is to quality education,” she said. “The school’s leadership has been exceptionally strong, especially in the face of some of the issues the school has been dealing with. The school has maintained a high quality faculty, and offers an exemplary education.”

Hendricks said that her office reviews annual reports and minutes of meetings as a way of monitoring the school.

“We look at fiscal matters,” she said, “educational programs, and governance.”

Hendricks said there have been 32 charter schools in the state that have closed down. She said some have had their charters revoked by the DOE, while others have surrendered their charters.

She said that she could not say if the two lawsuits in which the school is currently involved may affect the existence of the school.

The charter school is involved in ongoing litigation brought by the Red Bank Public School District. The suit concerns the racial make-up of the charter school versus that of the two district schools.

The borough school district claims that the charter school’s population does not reflect the demographics of the community, and that it is not educating the same population as the public school district, according to Red Bank Board of Education Attorney Armand McOmber.

“My sense is that they would want to reach out to the entire community,” said Doolan. “They have to maintain a roster, and they consistently have a waiting list.”

Hendricks said that charter schools are not encouraged to do targeted enrollment campaigns, but they are encouraged to reach out to the community as a whole.

The charter school has also recently had a suit filed against it by Patock Construction, the contractor who did renovation and construction work at the school’s Oakland Street campus.

The suit alleges that the charter school still owes Patock nearly $500,000.