- Office of the State Auditor
Media Contact for Audit Calls for Improvement in Board Oversight at Helen Y. Davis Leadership Academy
Mike Wessler, Communications Director
Boston — An audit released today by State Auditor Suzanne M. Bump found significant problems related to management and board oversight at the Helen Y. Davis Leadership Academy Charter Public School (DLA). The audit, which was conducted at the request of the Department of Elementary and Secondary Education, examined the period of July 1, 2014 through June 30, 2017. It raises similar concerns about compensation for the former executive director that were included in a recent report from the Office of the Inspector General but expands to also highlight deficiencies related to financial management of the school and board of trustee governance.
“This audit makes clear that the Board of Trustees for the Helen Y. Davis Leadership Academy fell considerably short of their fiduciary and oversight responsibilities. Our audit found numerous instances where funds that should have been used to support the education of students were not properly safeguarded and either improperly spent, potentially lost, or allocated toward excessive compensation,” Bump said of the audit. “While the board has indicated it has begun to take action on some of our recommendations, it is clear that deliberate and decisive action is needed to restore public trust in the fiscal management of the school.”
Bump calls on DLA to establish processes to monitor spending to ensure it is related to business purposes and done in accordance with school policies. The audit found significant problems related to the school’s financial management and the board’s oversight of financial activities. It shows DLA paid for $126,333 in credit card transactions that were inadequately documented or unallowable. It also reviewed vendor payments made during the audit period and noted that many lacked required documentation.
In addition, DLA’s board authorized the use of school funds to directly benefit employees, contrary to its policies. During the audit period, DLA provided $21,675 in cash advances to employees, more than half of which were given to the former executive director. Additionally, the audit found the former executive director paid her own mortgage with school funds in November 2016, a payment she stated was made in error, and did not reimburse the school until June 2017.
During the audit period, the school also did not reconcile a PayPal account that officials indicated was used to accept donations and make online purchases for the school. The school lost access to this account when its former business manager, who served as the PayPal account administrator, resigned in July 2017.
The audit encourages the school to develop a process for evaluating executive director performance and tie increases in compensation to those performance metrics. The school made an unallowable payment of $117,743 to its former executive director for unused sick time, the audit found. In addition, it notes that her salary and health insurance benefits appeared to be excessive. During the audit period, the former executive director received more than $60,000 in guaranteed pay increases. This brought her annual salary to nearly 80 percent more than that of the second-highest-paid executive director in a sample of executive directors in comparable academic settings established by the audit team.
Bump’s audit also calls for improvements related to the board’s governance, reporting, and training protocols. During the audit period, many board members did not complete required financial disclosures and did not participate in trainings on the state’s Conflict of Interest Law, nor did they acknowledge receiving a summary of that law. In addition, the board of trustees did not keep appropriately detailed records of its meetings; meeting minutes sometimes consisted of a meeting agenda with check marks next to each agenda item. Finally, the audit indicates that the board chair, who has been in that position since April 30, 2010, has exceeded established term-limits for the post.
The Helen Y. Davis Leadership Academy, formerly the Smith Academy for Leadership, was organized in 2003 as a Commonwealth charter school. It is located in Dorchester and serves 216 students in sixth, seventh, and eighth grade. During the audit period, it received revenue between $3.3 million and $3.4 million annually. Its long-serving executive director retired on August 1, 2017. In February of 2018, DESE renewed the school’s charter and placed it on probation with conditions.