Pennsylvania Auditor General Eugene DePasquale pointed to the founder of Pennsylvania Cyber Charter School as an example of why he says the state’s charter school law is the worst in the country.
Nick Trombetta, who founded the Midland school in 2000, last month pleaded guilty to charges of federal tax fraud after siphoning about $8 million from school funds. Even though he faces up to five years in prison for his crime, the way Trombetta managed the school technically didn’t violate the state charter law, DePasquale said during a Harrisburg news conference on Thursday.
His office released audits of the cyber charter school and the Lincoln Park Performing Arts Charter School , which Trombetta founded in a performing arts center of the same name in Beaver County. Both schools use charter school management company Lincoln Learning Solutions, which Trombetta also founded.
“Nick Trombetta, behind all of these entities, exploited every gray area in the law to get rich off the backs of students and taxpayers,” DePasquale said.
The two audits, along with one of the Midland Borough School District , show that the charter management company was paid millions of dollars and operated with little or no oversight from the school or the state, DePasquale said. And the problems continued even after Trombetta stepped down as CEO of PA Cyber in 2012.
Nicole Granito, interim CEO of PA Cyber Charter, said the administration “vehemently disagrees” with the auditor’s findings. Since Trombetta’s exit, the school has established a conflict-of-interest policy, restrictive nepotism rules and stricter financial reporting procedures.
“While the pursuit of quality improvement within any organization must be a continuous one, we take pride in the progress we have made and we look to the future with confidence and resolve.”
Among other things, DePasquale’s audit found that PA Cyber paid the management company more than $150 million over three years for a contract that had no terms beyond what was included in a one-page memo. When the company failed to meet deadlines for a new curriculum in 2015-16, the school waived its $4.2 million fine for violating the terms of the contract.
The audit also found that the cyber charter school failed to monitor student attendance between the 2011-12 and 2015-16 school years and failed to collect IT equipment from students who graduated or withdrew. Several relatives and spouses of administrators and trustees for the school were employed by the other charter school and the performing arts center. The school spends more than $2 million a year on advertising to attract students.
DePasquale plans to send copies of the audit to the State Ethics Commission, the U.S. Department of Education and the Office of the Inspector General. More than 1,000 students from Allegheny County and 500 students from Westmoreland County are enrolled in the cyber charter school, which is the largest in the state and one of the largest in the nation.
The audit of the performing arts school and the Midland school district found equally troubling relationships and connections between the entities, DePasquale said.
Lincoln Park charter paid the management company more than $3 million over four years, the audit found. The Midland Borough School District owes $1.5 million to the performing arts center in a pre-paid lease for space the district occasionally uses for art classes and special events. The Lincoln Park charter, housed in the arts center, leases gymnasium and classroom space from the school district for about $45,000 a year.
“There is a lot of public money changing hands in so many various and assorted deals that it leaves one to question who is benefitting, the students or the adults making the deals,” DePasquale said.
The state charter law, DePasquale said, does not provide for adequate oversight or public input about how charter and cyber charter schools spend taxpayer money and educate children. He said legislators need to make charter school management companies subject to the state public records laws.
“We need to revisit Pennsylvania’s charter school experience and act now, not later, to overhaul the charter school law and do a very thorough tune-up on all aspects of charter school oversight and regulation,” DePasquale said.