The Orleans Parish School Board has filed a lawsuit against the Better Choice Foundation and six of its board members for allegedly failing to return nearly $1 million in public funds after the nonprofit lost its contract to operate Mary D. Coghill Charter School last summer.
While the school was under Better Choice management, the New Orleans school district repeatedly cited the Coghill board and administrators for financial mismanagement, special education violations and a board member who interfered with the daily operations of the school. Entering the final year of its contract, the Gentilly Woods school earned an F letter grade, making it ineligible for a new contract, NOLA Public Schools Superintendent Henderson Lewis Jr. told board members in November 2019.
After four Orleans Parish School Board members unsuccessfully voted to overturn Lewis at the December 2019 board meeting, the charter group launched a campaign to keep the school.
Proponents claimed that the four votes to overrule satisfied state law and district policy requiring a two-thirds vote because only six OPSB members were present for the meeting. But both policy and state law covering such a vote require a two-thirds majority of the entire seven-member board, or five votes. Better Choice sued in federal court two months later, but that case was dismissed June 30 — the day the charter group’s contract expired.
The new OPSB lawsuit, filed in Orleans Parish Civil District Court late May, asks for a judgment declaring that the charter group is obligated to return all public money it has allegedly kept. The district is also arguing that Better Choice board members are personally responsible for the money as stewards of public funds on behalf of the charter group.
The lawsuit alleges Better Choice “blatantly failed” to return nearly $933,876 in public funds when the nonprofit’s charter contract expired at the end of June 2020. District policy and charter operating agreements state that charter groups have one month to return leftover public funds after they close.
Six months later, more than half of that money was gone, according to the district’s lawsuit.
“By December 31, 2020 Better Choice had spent $489,874 of the remaining public funds,” the lawsuit states.
The suit asks that Better Choice be forbidden from spending any of the approximately $444,000 remaining.
The Orleans Parish School Board and NOLA Public Schools did not respond to a request for comment. But the district’s lawsuit spells out its collection efforts.
According to the lawsuit, the district’s attorneys sent reminders about the overdue money earlier this year but did not receive any payments. On February 23, the district sent a demand letter, requesting the money be paid within a week. The next day, Better Choice told the district it had hired a liquidator, attorney Erin Springer, to help close out the organization. Springer responded on April 30 and asked the district to make any financial claims by Nov. 1, but when the district said it had earlier asked for the funds, Springer said she didn’t think the organization would be able to make the payment.
“Better Choice Foundation is in the process of being legally dissolved in accordance with Louisiana law and the Operating Agreement,” the charter group’s attorney Camille Bryant said.
Bryant directed The Lens to Springer, the liquidator, for any further questions. Springer did not respond to a phone call on Thursday.