Lincoln Memorial’s finances are ‘deteriorating.’ Charter school says district is to blame

The finger-pointing has continued between Lincoln Memorial Academy and the Manatee County School District, sparked by reports of a “deteriorating financial condition” at the Palmetto-based charter school.

Differing opinions surfaced in August 2017, when school board member Scott Hopes cast the dissenting vote in a review of Lincoln’s charter application, citing “numerous budget concerns.” It seems Principal Eddie Hundley viewed the statement as disingenuous.

Tensions worsened after district officials in Manatee and Sarasota counties reported Hundley to the Florida Department of Education in 2018. The state revoked Hundley’s educator certificate last month, finding that he twice endorsed a former employee who was under criminal investigation, helping him become a teacher in Sarasota.

The principal has maintained innocence over several months of media interviews and state hearings, claiming limited knowledge of the case and faulting Manatee for not reporting the criminal investigation to Florida’s DOE sooner.

Now Lincoln is in “deteriorating financial condition,” and the school has until Friday to work alongside the district and submit a corrective action plan to the state DOE, according to communications between the two groups. If neither can agree on a plan, state law allows Education Commissioner Richard Corcoran to pick an arrangement.

Charter school officials did not return two requests for comment between June 17 and Thursday.

In response to a draft plan submitted on June 21, the district said Lincoln relied too heavily on federal grants in its budget. The district also asked for more proof to back the school’s projected finances, and to assure the district that Lincoln has since paid its overdue bills and the money owed to its employees.

“District staff has made assistance in this matter a top priority,” the district responded. “If you need any assistance at all please contact us at any time.”

But in its draft plan, Lincoln alleged that Manatee owes the school Title I funding from the previous school year. And according to meeting minutes, the school’s governing board has accused Manatee of purposely withholding the grant money and stunting Lincoln’s enrollment numbers.

Rodney Jones, former president of the Manatee NAACP, repeated such allegations in a video posted to Facebook on Tuesday night. Announcing his suspension from the NAACP and highlighting what he views as local injustices, Jones said the school district “may have or may not have shorted” the school and “rigged” the Title I payments.

“So they lost over a quarter of a million dollars right there, because they got no Title I money like they were supposed to this year, because of the way the district did it,” Jones said. “So the district didn’t do them any favors, man.”

“They tried to do everything they can to destroy that school,” he continued.

In response to an inquiry by the Bradenton Herald, district attorney Mitchell Teitelbaum provided a time line of events from last year. In March, the district estimated the Title I allocations for its schools, and Lincoln’s projection was based on several factors.

The district included enrollment numbers, poverty data and a “1.6 multiplier” in its original projection of $283,200. To account for low-income families not reflected in the base data, the U.S Department of Agriculture multiplies the percentage of at-need students and meal funding by 1.6.

Manatee submitted the school’s Title I grant application and the projection about four months later. It then received a notice from the Florida DOE in September: Lincoln was not eligible for the multiplier, according to the time line.

“The use of the CEP multiplier is determined by a school’s student enrollment data from April 1 of the previous year,” the time line states. “Therefore, a new school would not be eligible.”

The time line said Manatee then adjusted the application, resulting in a new allocation of $117,581, more than $165,000 less than anticipated. And though Lincoln originally failed to obtain Title I status in November, when it had a poverty rate of 72 percent, it qualified about one month later.

Manatee then submitted an adjustment to the Title I grant in December. The result was a funding increase of nearly $33,000, or a total allocation of just over $150,000, the time line states.

“The Title I payments were properly provided to Lincoln Memorial Academy by the School Board of Manatee County,” Teitelbaum wrote.

“In addition, please note even if the allegations had been factual, Lincoln Memorial Academy would still be insolvent,” he continued.

Signs of trouble

Lincoln caught the attention of government agencies in Bradenton and Tallahassee over the last several months.

The Florida Retirement System recently notified Lincoln that its February contribution was delinquent and its March payment was past due.

“When retirement submissions are late, it delays contributions and other information from being posted to employees’ retirement accounts,” the April 22 letter states.

“In addition, it affects retirement eligibility (including participation in DROP) and could result in information employees receive about their accounts to be inaccurate.”

The retirement system then asked Superintendent Cynthia Saunders for help in a letter dated May 24, noting that Lincoln’s April contribution was delinquent as well.

“We have reached out to the academy several times regarding this ongoing issue,” the letter states. “Any assistance you can provide to resolve this is appreciated.”

Manatee’s chief financial officer, Heather Jenkins, then notified the school of its “deteriorating financial condition” in a letter dated May 29, outlining the need for an improvement plan. The school had a deficit of more than $235,000 by the end of April, according to her letter.

One day later, Jenkins sent an email to Cornelle Maxfield, the chief financial officer at Lincoln, notifying her that two employees were due a Best and Brightest teacher bonus, awarded to educators who earn “effective” or “highly effective” evaluations.

And on June 17, the city of Palmetto threatened to shut off Lincoln’s water if more than $10,000 in bills — covering six billing cycles — weren’t paid.

“Over those months, we have attempted to resolve the outstanding balance on the account by allowing payment arrangements to be made by specific dates,” the letter states. “However, due to multiple broken payment arrangements, the unpaid balance of $12,439.23 remains overdue.”

Soon after the letter was sent, Palmetto Mayor Shirley Bryant confirmed that Lincoln had paid its outstanding bills.

The finger-pointing continues

Since at least July 2018, before Lincoln entered its first year as a charter school, its governing board has accused the school district of foul play.

The board includes Christopher Czaia, Christine Dawson, James Ward and Walter Presha, along with the school’s principal and chief financial officer. Sheriff Rick Wells resigned from the school’s governing body on July 25, 2018, the same day Lincoln’s board shared its apparent disdain for the school district.

“The board congratulated Principal Hundley and staff on excellent enrollment results in the face of the school district’s deliberate attempts to thwart enrollment,” the minutes state.

About three months later, the board said Manatee continued to be “a source of hurdles and roadblocks.” The district made Lincoln go through unnecessary steps to receive money from the Florida Department of Agriculture, used to provide free and reduced-price lunches, according to board minutes.

“The School District of Manatee County will be withholding Title 1 funds from the school unless we gathered free/reduced lunch applications from our parents to verify, based on income, Title 1 eligibility,” it states. “This is a process that is unnecessary for any other CEP school.”

“Even though we have complied with this school district requirement, to date, we have not received any of the Title 1 funds due to our students from the district,” the minutes continue.

They also discussed its 21st Century grant, which goes toward programs before and after school. Lincoln relies on the grant to pay teachers, but the money has to be spent and then paid back, and the board said Manatee was months behind on its reimbursements.

“The school has made sure that the teachers have been paid, but the withholding of funds by the district has been burdensome,” the minutes said.

And on Nov. 12, 2018, the board held a special meeting to address its ongoing dispute with the district, especially when it comes to Title I funding and other grants.

“The group was exasperated by the school district’s continued attempts to derail the school’s success, and agreed unanimously to engage legal assistance,” the board reported, without providing further details.

In a one-page response, sent by the district’s attorney, Manatee said it’s responsible for verifying a charter school’s use of state or federal grants, and for reimbursing the schools for proper spending.

“We have reimbursed Manatee Charter for three years and we are following those same policies for Lincoln now that they are a charter,” the document states.

“The District made sure that if the school had any questions, Mr. Hundley could reach out to others at the District,” it continues. “District personnel have tried to work with Lincoln Memorial Academy and offer suggestions and ideas to ensure their 21st Century expenses are paid and reimbursed.”

The plan

Lincoln’s corrective action plan is due on Friday, but the school’s draft plan offered a glimpse into its plans and desires. Maxfield, the school’s chief financial officer, emailed the draft plan to Jenkins, Manatee’s finance leader, on June 21.

“Look forward to hearing your thoughts,” Maxfield wrote. “Thank you for all your input thus far.”

The plan alluded to “unexpected mid-year changes to the funding plan,” and Lincoln asked the district to provide any remaining Title I funds from the previous school year. In its response, the district said Lincoln “spent all their 18-19 Title I funds, and they are not due any additional 18-19 funds.”

Lincoln also asked for a portion of its grants to be made available before purchases are made.

“We do not disperse funds directly to charter schools prior to expenditures occurring,” the district responded. “We use a monthly reimbursement process.”

Manatee’s traditional Title I schools are connected to a district-wide business management system, often referred to as ERP software, which allows spending to be approved before it takes place. The district said charter schools are not linked to its ERP system.

The reimbursement process allows Manatee to vet a charter school’s spending before it receives money from a grant, the district continued.

“Title I funds are supplemental in nature and cannot be used to fund a school’s core program,” the response states.

“This is a heavily audited item therefore a strong fiscal practice is required on our behalf,” it continued.

Lincoln also requested approval of a solar project and the related energy savings. In its response, the district cited an opinion from Todd Henson, director of maintenance, operations and central distribution.

He said the project would encompass all of the school’s roof and most of its landscape, and that Lincoln was ill-equipped for the new equipment.

“Placing any equipment on the Lincoln roof is problematic as the single ply membrane material does not do well with foot traffic or penetration through the material,” the response read. “Additional weight on the roof would be an issue. Roof leaks would be very difficult to address.”

And in its section for potential savings, Lincoln said it could recover $3,000 by ensuring all of the school’s lights are turned off at closing. It could save another $5,000 by cutting down to one copy machine and monitoring its usage, the plan said.

Lincoln also said it could end a maintenance contract and bring the work in-house, leading to potential savings of $12,000.

“Will an existing employee be performing this service?” the district responded. “Will it require additional supply and equipment expense?”

Manatee asked for proof that Lincoln is current on payroll taxes, Best and Brightest payments, workers’ compensation, utilities and Florida Retirement System contributions. It also asked for more documentation to back the school’s projected revenue from various sources, including school clubs and uniform fees.

“If LMA and the district cannot come to a consensus by 6/28/19, notice will be sent to DOE notifying them of such,” Manatee school officials concluded.

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Giuseppe Sabella, education reporter for the Bradenton Herald, holds a bachelor’s degree in journalism from the University of Florida. He spent time at the Independent Florida Alligator, the Gainesville Sun and the Florida Times-Union. His coverage of education in Manatee County earned him a first place prize in the Florida Society of News Editors’ 2019 Journalism Contest. Giuseppe also spent one year in Charleston, W.Va., earning a first-place award for investigative reporting.