Dallas Charter Closes: Students Hurt, Teachers Hurt, Taxpayers Left Holding Empty Bag

More fiasco reported by Dallas Morning News:

By KAREN AYRES SMITH / The Dallas Morning News
kayres@dallasnews.com
No one knows how much of the $750,000 that a defunct Dallas charter school owes Texas taxpayers will be recovered, state education officials said Wednesday.

When Lynacre Academy shut its doors Friday, school leaders had been in talks with the Texas Education Agency for two years about returning money that the state awarded the school based on inflated attendance figures in the 2003-04 and 2004-05 academic years.

TEA Commissioner Robert Scott said it's not uncommon for schools to overestimate attendance figures before a school year begins. But most districts settle up with the state the following summer and return the state funds they received for students who never attended school.

Lynacre Academy filed for bankruptcy before paying its debt. So, TEA is now one of several creditors lined up looking for its money.

"I don't have a clear picture of what their financial assets are," Mr. Scott said. "We will do whatever we can to recoup the taxpayers' money, but I can't be sure what we'll be able to get."

The school filed for bankruptcy amid ongoing talks about repaying the TEA debt. Agency and school officials said the attendance reporting problems could partly be the result of failing to properly report absences.

A bankruptcy judge ruled last week that the state agency could begin recouping the debt by limiting its payments to the school.

Shari Bruce, the school board's president, said it would have been impossible for the district to pay teacher salaries and other operating expenses without receiving its usual state payment.

Ms. Bruce said school board members had still hoped they could work out a long-term payment plan with the state when they decided to start classes this school year.

"Needless to say, I'm beginning to think that maybe at the beginning of this year we should have given up," she said. "It seems like a lot of teachers have been hurt and a lot of students have been hurt. It's a very hard situation."

Lynacre's unexpected closing last week sent 73 students in search of new schools.

TEA and school officials had met several times to discuss how the school could retire its hefty debt. Part of those discussions focused on the school's plans to sell more than 200 acres near Henderson in East Texas.

The school sold the property in May, but David Anderson, a TEA lawyer, said the state never received any funds.

Ms. Bruce said the school sold the property for $330,000 and needed the money to run its everyday operations and summer school, and to pay off other debtors.

"We had hoped to pay them some of that, but due to the pressing financial situation, we did not," Ms. Bruce said.

As school board president, Ms. Bruce said, she felt bad about not being able to pay the debt. She had hoped to build enrollment enough to make the school financially stable and pay off its creditors.

Mr. Scott said charter school directors often lack experience in overseeing a school's finances, which has caused significant problems in some schools.

The state authorized charter schools more than a decade ago to offer an innovative and competitive alternative to traditional public schools.

But the promise has not been kept by some of the companies that operate charters. . . .