SALT LAKE CITY — A new state audit has determined that the appointed Utah State Charter School Board in 2015 "improperly disbursed" startup grants to Athlos Academy prior to the elected State School Board approving its charter application.
The audit, conducted by the Office of the State Auditor and released Tuesday, found the charter board improperly disbursed $124,100 in grants "prior to the execution of the charter agreement."
"The awarding of state funds prior to execution of the charter agreement creates an increased risk of abuse of funds and a lack of transparency," the audit states.
The two-page audit notes that the state charter board approved Athlos Academy's charter in January 2015.
The elected State School Board denied its application in April 2015. "However, the (state charter school board) awarded Athlos a $124,100 charter school startup grant in July 2015 and reaffirmed its approval the following month." In September 2015, the State School Board approved the application.
"If a school has been approved, but charter agreement has not been executed, recipients understand that they will not be awarded grant funds until a contract between the school and authorizer has been executed and signed. Evidence of a signed contract must be provided prior to funding. Since the charter agreement was not executed until after all the grant funds were disbursed, the disbursement of the grant was in violation of the grant requirement set forth in the application," the audit states.
In a letter responding to the audit, state charter board Chairwoman Kristin Elinkowski wrote that the board had already taken steps to address the issues raised in the audit.
"More recently, we have not funded cohorts until we have a fully signed and executed charter agreement. Prior to the reception of this report, we drafted a policy that will ensure schools are not funded without the signed and executed charter agreement. The board intends to adopt this policy at an upcoming meeting," the response states.
Elinkowski, at the conclusion of Tuesday's meeting of the charter school board, said the board has made changes to ensure that funding is properly disbursed.
"It wasn't anyone on our staff or on our board currently that made that decision in the first place. We have made changes and put processes in place to make sure that will never happen again," she said.
State Auditor John Dougall's office recommended that the charter board:
• Refrain from awarding any public funds, including charter school startup grants, until all applicable parties have signed a charter school agreement.
• Ensure all charter school startup grant applications are properly reviewed and in compliance with applicable requirements prior to awarding grants and disbursing grant funding.
• Identify instances where the board disbursed grant funds prior to the execution of the charter agreement and review the use of the funds for propriety and compliance with the state procurement code and other applicable laws and rules. If violations are identified, consider recovering all or part of the improperly disbursed charter school startup grant funds.