The Austin Chronicle

https://www.austinchronicle.com/news/2004-02-27/198953/

TEA Takes Over Eastside Charter School

By Rachel Proctor May, February 27, 2004, News

Responding to growing evidence that East Austin charter school Texas Academy of Excellence faced total financial meltdown, the Texas Education Agency last week assigned a management team to oversee the school's operations. The three-member team met with school officials Thursday and Friday to determine how to dig the school out of a morass that included the school's accounts being frozen, teachers not being paid, alleged problems with the school's facility, and a staggering debt load. On Monday, the academy filed for bankruptcy in federal court.

In a Feb. 16 letter justifying her action, Education Commissioner Shirley Neeley cited debts including $40,260 owed to the Teachers' Retirement Fund, $45,000 in back rent, and $21,000 in late utilities. The school's next funding check from the state, due Feb. 25, is only $167,520, most of which will go straight to the IRS to satisfy a $137,588 levy for back taxes. The "facts and circumstances indicate severe difficulties at Texas Academy of Excellence, in both finance and governance," Neeley wrote. "An immediate need for intervention is evident."

According to Jim Thompson, the TEA's senior counsel, the team will not recommend any action until they've gotten a clear sense of the school's financial situation. (A separate audit team has also been assigned to research the situation.) "The team's primary task is to assess the situation and look at books and financial records and assemble a picture and report back to the commission so we can understand the scope of the cash flow problem and other issues," he said.

Thompson said that ensuring the Academy's teachers get paid is a priority, though he was unsure when funds would be available. Employees still cannot legitimately cash the checks they got at the beginning of February, due to a freeze on the school's accounts initiated by the school's former landlord. However, many have gotten cash through check-cashing businesses that do not ascertain ahead of time whether sufficient funds are available. The school's Chapter 11 bankruptcy filing may allow the lifting of the freeze. Nor could Thompson predict what kinds of long-term solutions the team might recommend once payment plans are worked out with creditors, although he said the TEA may "make recommendations with regards to changes in management or systems or anything else that needs to be improved to prevent the situation from reoccurring."

Texas Academy of Excellence representatives, including Superintendent Dolores Hillyer, did not return phone calls for comment. Management team member Jack Cockrill says that the team has no plans to address the school's consistently low academic performance, but he added that the financial conundrum is not affecting the academy's ability to educate students. (Test scores at the academy lag behind not only state averages but also those of conventional schools with comparable demographics. The academy's enrollment is more than 90% African-American, and most students are eligible for free or reduced lunches.)

"We are concerned about the academic program," said Cockrill. "But I personally have been in every classroom [Friday] morning, and am pleased to report that the students are working hard. Learning is taking place. Teachers are teaching. Hopefully that will continue as we deal with the crisis in the financial area."

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