The Orleans Parish School Board has filed a motion in Civil District Court seeking permission to subpoena records from two accounting firms and a financial management firm working for the Dryades YMCA — which runs James M. Singleton Charter School — following an audit that said the nonprofit charter operator owes money to the school.
The request was filed in an ongoing lawsuit the Dryades YMCA filed against the School Board last summer to stop its administrative arm, the NOLA Public Schools district from closing the school.
In late June, NOLA Public Schools district officials threatened to revoke the school’s charter due to academic, operational and financial issues. Days later, the school sued the district and was granted a restraining order allowing the school year to start as planned. Now, the legal process continues to play out in the final year of the charter school’s contract — which means the school could close next summer if district officials opt not to renew it.
Singleton has been embroiled in a variety of problems over the last few school years — ranging from financial and academic issues, leadership turnover and a phony background check scandal that allowed employees with criminal records to work on campus. The school’s CEO and CFO resigned this spring amid the background check investigation and the former CFO, Catrina Reed, was later arrested on charges on 12 counts of injuring public records.
The requested subpoenas are related to yet another issue. Days before NOLA Public Schools Superintendent Henderson Lewis announced his intention to revoke Singleton’s charter, the district alleged in a warning letter that Dryades YMCA, which also runs the namesake fitness center that shares an address with the school, owes hundreds of thousands of dollars — public funds — to the school.
The warning letter said that Dryades owed the school $381,578 as of the end of 2019. In addition, district officials wrote that Singleton’s most recent audit, which covered its finances through June 2020, found that the school was owed $1,140,781 from Dryades “and other programs.” Federal and state public school funds — doled out on a per-pupil basis — have very specific restrictions in how they must be spent at schools.
The district is now asking a judge to grant subpoenas for documents from three companies: Bruno and Tervalon, the accounting firm that performed the audit, Luther Speight and Company, an accounting firm, and 4th Sector Solutions, a company that provides financial services for charter schools.
The district wants the Bruno and Tervalon subpoena issued “for the documentation underlying its conclusion that Dryades YMCA owes $1.1 million to Singleton.” It also wants subpoenas for the other two companies for any documentation they may have of the debt.
YMCA leaders have argued that because they run the school they can’t owe themselves money.
The district has to navigate accountant-client privilege in its request because Bruno and Tervalon was hired by the YMCA. That privilege only applies to “confidential communication,” the filing states, and the district argues because former Dryades YMCA CEO Doug Evans disclosed the issue in the summer of 2020 that it does not qualify for such privilege.
“Dryades YMCA has waived any such privilege by disclosing the existence of its debt to Singleton,” the filing states.
The district’s filing states that documents “are essential to the successful completion of an ongoing investigation by OPSB” and “necessary in order for OPSB to exercise its financial oversight obligations.”
“OPSB reminded Dryades YMCA that it was solely responsible for the sound management of Singleton and that diversion of Singleton’s funds to Dryades YMCA might be a prohibited use of public funds” in violation of state law, the filing states.
The Dryades YMCA did not respond to requests for comment.
Singleton’s charter expires at the end of the school year — and the financial records could factor into the district’s decision on whether to renew the charter, which is expected later this year.
“The Superintendent will announce any recommendations concerning the Dryades YMCA’s charter to operate the James M. Singleton Charter School in accordance with the Operating Agreement, OPSB Policy, and Louisiana law,” district spokeswoman Taslin Alfonzo wrote in an email Tuesday.
In a letter to parents earlier this month, Lewis wrote, “As part of my commitment to communicating openly with families, I am writing to let you know that Singleton did not meet the typical charter school renewal standards and therefore will participate in a comprehensive evaluation this fall.”
The district will hold a public hearing for Singleton representatives to make their case for renewal on Oct. 6. Prior to that, the school must present parents with a plan for improving the school.
If Singleton does win a new contract, it will be a “3-year contingent renewal” Lewis explained.
“Pursuant to OPSB Policy HB, final action on all charter renewal recommendations shall be completed no later than January 31st of the last year of the contract’s term,” Alfonzo wrote.
The two sides will appear in court before Medley on Oct. 13 regarding the request for subpoenas.