With a projected $155,000 left in the bank when Pride College Prep charter school closes its books June 30, the nonprofit’s board discussed what to do with the remaining funds at its monthly meeting Wednesday night.
Pride College Prep’s charter was not renewed by the state in December, and leaders are preparing to hand over Mildred Osborne Elementary to ARISE Academy leaders on July 1. ARISE currently operates one school but will expand to two next year when they assume operations at Osborne.
Board president Allen Square said the board asked school leader Michael Richard to work with ARISE leaders to create a list of items, such as textbooks and equipment, which Osborne students could use in the fall. Andrew Shahan, ARISE Academy’s school leader, has been working with Richard and created a proposal for supplies for the school.
Richard gave board members a copy of material requests totalling $70,970.
Square said that normally these types of purchases would not come before the board. But he said the expenditure would represent a significant departure from the board’s original budget, so he thought it would best practice for the board to review it.
“That’s a pretty big number,” said member Scott Jacobs, “I don’t know if we know we have that number.”
Jacobs suggested loaning the money to ARISE, so the school could get a lead on ordering materials for the fall, but to protect Pride in case unforeseen costs arise in the closeout process. Then when they closed the books in June, if the money was available the purchase could be written off as a donation. Jacobs also suggested having a third-party review the finances before the board makes any decisions.
Shahan, who was present at the meeting, said he understood the reasoning behind a loan but felt that step would be “complicated and unnecessary.”
“What’s the latest you can order these items?” asked Square.
“Not July 1,” said Shahan, which is when his group takes over the school.
Pride’s Director of Finance and Operations Simone Green explained even with “very conservative” budgeting, she still anticipated a significant surplus.
“We’re looking at $155,000 in the bank account at the end of the school year,” she said.
Square laid out three options for the leftover money: donate cash or goods to the Osborne school, give funds to the Recovery School District, or give the remaining money to another non-profit. Though board members agreed the third option was unlikely, as they want to continue serving Pride’s specific student population.
Because Pride can show the funds were privately attained, and not public money, the balance does not automatically return to the RSD, said Richard.
“We can demonstrate these were private funds?” asked member Sam Joel.
“Absolutely,” said Richard.
Jacobs pointed out that it is a “coincidence” for ARISE that Pride has any money leftover, and that giving half of that money up right now would be a risk. He said there there would be closeout costs associated with the final audit and possible additional staff hours.
“You start nudging up against that wall not even knowing what it is yet,” said Jacobs.
Board member Janice Piazza said she would like to see a more thorough breakdown of numbers before making any decision. Other members agreed. The audit and financials could be closed out as early as July, or as late as December, when the audit is due to the state.
The board decided to table any decisions until they had a better understanding of close out costs. Green said she would work with a third-party to analyze the budget from an accounting perspective for the May meeting.
Members briefly discussed the audit, though they questioned how it would be completed after the school is dissolved since there will be no management staff to sign the final version. They agreed to look further into the protocol.
Richard said 17 Pride staff members had accepted positions at Osborne, while about 9 had accepted positions at other schools in the city. He said he is in constant contact with ARISE leaders to help ensure a smooth transition for the school.
Richard asked Square what the composition of the board would look like in the coming months and after June 30. Square said he is meeting with Neerav Kingsland, the CEO of New Schools for New Orleans to discuss dissolution of the nonprofit and would report back in May.
In addition to Jacobs, Joel, Piazza, and Square, member Rita Reed was present and member Lisa Tabb phoned in. The hour-long meeting began at 7:45 p.m.