Staff at a now-closed North Carolina charter school falsified enrollment numbers to obtain more than $400,000 in state money that it wasn't entitled to, according to a state audit released Wednesday.
Auditors of Bridges Academy in Wilkes County also said the school misused almost $79,000 in taxpayer funds to support a preschool, which also required tuition fees from parents of the children. Charter schools receive public funds and don't charge tuition to its K-12 students.
Findings from the investigation by State Auditor Beth Wood’s office — the result of tips to its fraud and waste hotline — were referred to the local district attorney, as well as to the IRS and state Revenue Department. The school, which opened in 1997 and reported fewer than 200 students on average, closed last June during Wood's probe and is now in receivership for asset liquidation.
The investigative audit cited possible violations of state law and tax rules. The auditors also found the academy didn't prepare and submit required income forms for contract workers.
The court-ordered receiver — a Chapel Hill attorney — said in a response letter attached to the audit that he accepted the audit's primary findings.
In another letter, state schools Superintendent Catherine Truitt said the Department of Public Instruction agency would seek repayment of what the audit called the misspent money, in keeping with the audit's recommendations. She also said DPI was updating student enrollment processes to detect and aim to prevent falsifications.
The audit, which did not name administrators at the K-8 school by name, said the academy's director and finance officer “colluded to submit falsified student enrollment records to DPI and to conceal the falsified records from Bridges Academy teachers and support staff.” They used a second student information system to hide the activity from a newly hired principal and others, according to the audit.
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Records sent to DPI in September 2020 included 180 students, of which 72 were falsified, the auditors wrote, meaning “$404,971 of state funds were not available for the education of legitimate students in North Carolina” in the 2020-21 school year.
It's a misdemeanor for a school employee to knowingly and willfully create false attendance or other reports.
It wasn't immediately clear whether authorities would pursue charges. State charges could originate from the district attorney covering Wilkes County or from the Department of Revenue.
The director and finance officer also indicated to auditors that the process of inflating enrollment began several years earlier. Wood's office recommended that DPI consider reviewing previous years' records to see if other funding was obtained on falsified students. Truitt wrote that it wasn't feasible due to several factors, including a May 31 deadline to submit financial claims against the academy.
The academy's charter school funds were misused to support the preschool that opened in 2020 because business activities of the preschool and charter school weren't separated, according to the investigation. And it didn't help that the board of Bridges Educational Foundation Inc. — which operated the school — adopted a 2020-21 preschool budget with an anticipated $80,000 shortfall, the audit said.
Bridges Academy, located in the State Road community, accepted students from Surry, Wilkes, Yadkin and Alleghany counties.
The State Bureau of Investigation opened in March 2021 an investigation into allegations at the school. The school's board announced the closing in early June, saying a consulting team it had brought in found irregularities in the school’s operations.