District says Lincoln is violating contract as charter school’s financial woes continue

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The school district has accused Lincoln Memorial Academy of failing to comply with document requests and violating its contract as a result. Both issues arose during a joint effort to address financial troubles at the Palmetto-based charter school.

Lincoln sent a draft of its corrective action plan to the school district on June 21, one week before a final report was due to the Florida Department of Education, but the district felt Lincoln’s plan was lacking. The June 28 due date passed without a final agreement, continuing a stalemate between the school district and one of its newest charter schools.

When the school board meets on July 23, it will discuss the “financial instability of the school and the resulting breach of contract,” according to an email from district attorney Mitchell Teitelbaum, sent to the state’s charter school director, Adam Emerson, on Monday afternoon.

Despite several requests to the school, Manatee had yet to receive the documents needed to review Lincoln’s detailed finances and to help with an action plan, according to the email.

School officials could not be reached for comment.

In a follow-up email to the Bradenton Herald, Teitelbaum pointed to several sections of Lincoln’s contract with the school district.

The district can request “documents on the school’s financial operations beyond the monthly financial statements and the school shall provide the reports no later than the 15th day of the following month,” according to the contract.

“The school agrees to provide the District, upon request, proof of sufficient funds or a letter of credit to assure prompt payment of operating expenses associated with the school,” another section reads.

Manatee also has certain responsibilities under the contract, including the need to provide state and federal money to Lincoln in a timely manner. In meeting minutes and conversations with the district, Lincoln’s governing board accused Manatee officials of withholding federal grants.

In its latest response to the district, the school said Manatee was slow to collect and disburse grants, depleting Lincoln’s reserves and forcing the school to apply for a loan as it paid salaries without the expected grants.

“There was no delay in allocating those funds,” Teitelbaum responded on Tuesday. “All Title I payments were made in a timely manner based upon the required submission of documentation for reimbursement, as required by statute and contract.”

The school also underscored a jolting change to its planned budget. In the original estimate of funding for Title I schools, developed by the school district in March 2018, the school was projected to receive $283,200.

But the estimate changed after a response from the Florida Department of Education. As a charter school in its first year, Lincoln wasn’t eligible for a grant “multiplier,” causing the estimate to fall below $118,000 in September 2018, according to information provided by the district.

The final amount of Title I funding increased after three months, to just over $150,000, but it was still $133,000 less than Lincoln’s original projection.

Despite the unexpected change to its budget, the school — with a recent deficit of more than $251,000 — “would still be insolvent” had it received the original estimate, according to Teitelbaum.

Reiterating past statements by the district’s finance department, he said federal grants are meant to enhance a school’s budget, not to pay for its core operations.

What happens next?

Heather Jenkins, the school district’s chief financial officer, first notified the school of its “deteriorating financial condition” and the need for a corrective action plan on May 29. She then sent a letter to Florida DOE officials on June 28, notifying them of a disagreement with the school.

Lincoln’s budget deficit totaled $251,430 by the end of May, and the district was “unable to reach consensus” with the school after 30 days of working on a plan, according to her letter.

“This plan was inadequate and did not include viable steps which would result in Lincoln Memorial Academy’s financial solvency,” it states.

She asked the state’s education commissioner, Richard Corcoran, to mandate full disclosure of Lincoln’s pertinent financial documents. By state law, the commissioner could also “determine the components of the plan” if no agreement is reached at a local level.

The district previously asked for proof that Lincoln was current on its payroll taxes, workers’ compensation insurance premiums, utility bills, Best and Brightest payments and its contributions to the Florida Retirement System.

“Not available at this time,” the school responded.

Emerson, the state’s charter school director, responded with a June 29 email, urging the district and the charter school to reach an agreement.

“While I appreciate that the district is trying to resolve this within 30 days of notifying the Department of the school’s deteriorating financial condition, it is not unusual for charter schools and their sponsors to go beyond this timeline in the interest of developing a viable corrective action plan,” he wrote.

“Immediately after you sent this e-mail, the school sent what appears to be documents responsive to one of your earlier requests for information, which indicates that the school and the district are still negotiating the components of the plan,” he continued.

Giuseppe Sabella: 941-745-7072, @gsabella

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.