From May 2019, a New Beginnings Schools Foundation board meeting. (Marta Jewson/The Lens)

A New Orleans charter school network that has been the subject of recent controversy over its management of one of its schools — John F. Kennedy High School — may have enrolled students who didn’t live in Orleans Parish last school year, according to the group’s annual audit, released on Monday. The finding could jeopardize any per-pupil tax dollars* tied to those students, forcing the network to pay the money back. 

Auditors identified “multiple students” whose files did not contain documentation showing that they lived in New Orleans during the 2018-2019 school year, the period auditors analyzed. Since the audit does not provide further details, it’s unclear how many — or if any — students enrolled in New Beginnings Schools Foundation schools actually lived outside of the city and whether would attempt to recover any of the per-pupil funding tied to those students. But the finding does raise some questions about how the city’s charter schools check residency and to what lengths they should go to ensure its accuracy. 

Gaby Fighetti, who formerly worked for the Recovery School District and the NOLA Public Schools district, led the team that developed OneApp, the city’s centralized application process. She told The Lens that she thinks schools are very good at ensuring students first enrolling meet residency requirements, but that their year-to-year follow-up may not be as exhaustive. 

“The question isn’t whether it’s important for our schools to serve only Orleans residents. I think most would agree that it is,” she wrote in an email Tuesday. “The challenge is how do you ensure that in a way that doesn’t hurt the students our schools are serving?”

“For our more economically disadvantaged families, proving residency is very difficult because residency is often temporary,” she noted. 

New Beginnings operates two schools in New Orleans: Pierre A. Capdau Charter School and John F. Kennedy High School. Kennedy has been the subject of much media attention after half of its graduating class of 2019 learned they hadn’t met graduation requirements one month after their May ceremony. This audit covers the 2018-2019 school year, when the charter group also ran Medard Nelson Elementary School, which closed last spring. 

Following the scandal, New Beginnings’ governing board voted to surrender its charters to Kennedy and Capdau at the end of this school year. KIPP New Orleans Schools will be taking Kennedy over. Capdau will be operated by InspireNOLA.

New Beginnings’ audit, which all charter groups are required to submit to the Louisiana Legislative Auditor annually, also identified several financial problems. Auditors found the network overestimated revenue and underestimated expenses, which they attributed to high turnover in the finance office. They also found that the school did not properly document its management of federal grant money Separately, more than half of school credit card transactions they reviewed couldn’t be supported by itemized receipts showing what was purchased. 

New Beginnings board president Raphael Gang said the charter group asked auditors to take a close look in their first meeting with them.

“We requested that our auditors take an extremely thorough look at our organization and let us know about any deficiencies they found in real time so that we could correct them as quickly as possible,” he wrote in an email Monday. “We are proud to say that at this point all of the issues raised in the audit have been addressed.” 

Gang did not answer questions about how many students may have been improperly enrolled. 

State law requires charter schools to enroll students in their defined jurisdiction. Only a handful of charter schools in the city, those overseen by the state Board of Elementary and Secondary Education with a Type 2 charter, are allowed to accept students from other parishes. All of New Beginnings’ three charter schools last year were Type 3B, indicating a turnaround state school that had returned to Orleans Parish school board control.

OneApp and Orleans Parish residency

The NOLA Public Schools district annually conducts a computerized lottery, called OneApp, for students entering school for the first time or switching schools. Students who continue on at their current school from grade to grade do not interact with the system. The vast majority of New Orleans students are assigned to schools through OneApp.

The lottery essentially consists of two distinct phases. Students are assigned to schools by the district through OneApp. Then, they must register with the independent charter school, which consists of providing proof of residency, immunization records, emergency contact information and similar items. 

Fighetti, who now works for Crescent City Schools, thinks schools do a good job ensuring a student’s residency the first year they enroll, but that annual checks of residency are much more time consuming. 

“It is far more challenging to collect residency documentation for continuing families because it becomes a one-off request for documentation and response rates from parents/guardians can remain low even after repeated attempts for the information,” she wrote in an email Tuesday. 

“You can take the position that any student who doesn’t submit that information in a timely manner should be dis-enrolled from the school for the coming school year, but that’s neither practical nor in the student’s best interest.”

She also believes a stance like that is dangerous, because she thinks it would likely result in more false-positives — students who simply can’t provide the paperwork even though they do live in the district — than the rooting out of students who actually don’t meet residency requirements, she wrote. 

District spokeswoman Fatima Mehr responded to questions about residency in a statement attributed to the district.

“NOLA Public Schools expects that schools verify residency as a condition of enrollment,” Mehr wrote. “Students who are found to live in another parish may be issued an official notice of ineligibility to attend by their school.”

Asked what schools should do on an annual basis, Mehr replied with another statement attributed to the district: “Schools should collect residency as part of their registration process for school.”

Fighetti also thinks schools should check for residency each year, and said many school leaders work hard to ensure they are working with families in tough situations. 

“On the west bank, for example, families may move between Jefferson and Orleans multiple times a year as their personal situations change,” Fighetti wrote. “School administrators understand those circumstances.” She added that federal regulations allow students considered homeless and living in temporary housing outside of their school zones to stay in their schools of origin. 

The audit warned that the school may have to repay some of its per-pupil funding, a major source of the network’s revenue totaling millions of dollars per year. 

“This error could mean that the school could potentially have to repay the local Minimum Foundation Program Funds if the school did not have proper documentation of admission requirements being met, the student resided within the jurisdiction of the school or could provide the proper waiver,” the audit states

Now, New Beginnings will verify residency of all students sent from OneApp to the school, according to a corrective action plan it submitted as part of the audit.  

Asked whether the Louisiana Department of Education would seek the money, spokeswoman Sydni Dunn said the department “will review the audit and determine next steps.”

Other findings

New Beginnings’ audit also flagged several financial issues.

The group “did not maintain sufficient documentation” related to its Title 1 federal grant funding, provided to schools with high levels of low-income students. The federal grants in question totalled about $2 million last school year, according to the audit, though it’s not clear how much of that may have been affected by the problem.

That was one of many items addressed in its improvement plan, also included in the audit, which states the charter group has a new process for documenting grants.

Auditors also checked class sizes and enrollment and discovered a variety of issues. Seven out of ten classes reviewed were not properly classified on the schedule and 11 high school classes exceeded maximum class size. The size limit for high school core classes is 33 students.

The auditors also checked several data points against data submitted to the Louisiana Department of Education on Oct. 1, 2018. Each year schools report employee information and enrollment information on that date. 

Employees’ experience level didn’t match what was reported to state in 17 of 25 employees reviewed. When it came to employee salaries, 25 of 25 employees’ June 30 review didn’t match their personnel files. When auditors tried to review employee attendance for select employees, they couldn’t find any records approved by a supervisor tracking attendance for the selected pay period. 

Additionally, 11 of 20 transactions could not be supported by an original itemized receipt that identified precisely what was purchased

The audit didn’t mention anything regarding board minutes, which former CEO Michelle Blouin-Williams is alleged to have doctored to retroactively make it look like the board approved a contract, according to a WWL-TV report from David Hammer. Blouin-Williams resigned amid the graduation scandal as investigations from the state, district and charter group itself were underway.

The district also wants to take a closer look at the charter group, according to a statement sent by spokeswoman Fatima Mehr that’s attributed to NOLA Public Schools. 

“Based upon the review of their audit, New Beginnings did not meet the long-term stability metric, as they did have material weaknesses cited, thus NOLA Public Schools has issued a notice requiring New Beginnings to meet with us for a fiscal health meeting to delve deeper in these matters.”

*Correction: This story, as originally written, said that “state” funding would be at stake. Per-pupil funding includes both state and local funding. The New Beginnings audit says that local funding may have to be repaid for students that may have lived outside of New Orleans. (Feb. 11, 2020)

Marta Jewson

Marta Jewson covers education in New Orleans for The Lens. She began her reporting career covering charter schools for The Lens and helped found the hyperlocal news site Mid-City Messenger. Jewson returned...