SALT LAKE CITY — The Utah State Board of Education has ordered American Preparatory Academy to refund to the state more than $2.7 million in special education expenditures the board deemed “disallowed.”

The board voted to require repayment following an executive decision conducted late in its 10 hour-plus meeting Thursday. No board member commented on the motion, in which the board also accepted and approved release of an internal audit of the academy’s use of special education funding.

The audit found that Utah Charter Academies, doing business as American Preparatory Academy or APA, used funds for goods and services that were not “easily, obviously and conveniently identified with specific special education activities or programs.” The academies are public charter schools.

“Additionally, APA did not comply with procurement and policy requirements.”

The audit’s review of 25 special education paraeducators found they nearly all “provided services to all students in the classroom, both students receiving special education and students not receiving special education.”

According to state law, special education funds may only be spent for direct costs.

The audit also raised concerns that some of the paraeducators that worked with students who received special education services were not adequately trained.

“Use of untrained and unsupervised staff increases the risk that students with individualized education programs could be deprived Free and Appropriate Public Education, which is a requirement under the Individuals with Disabilities Education Act,” the audit states.

It also found that American Preparatory Academy’s documentation of expenses and teacher duties was lacking.

Anticipating board action that the school refund special education funding to the state, American Preparatory Academy’s board Chairman Dee Henderson said the schools have a “100% satisfaction rating” with special education clients, “and the state has encouraged us to innovate.”

He added: “I would encourage you guys to think about the overall mission of encouraging charters to innovate and not send us a bill for $2.7 million because we did that.”

In a written response in the audit, the American Preparatory Academy board and staff wrote that reconciling innovation and compliance is one of the greatest challenges that charter schools face.

“Any concerns should not be interpreted as attempts by APA to push the boundaries of compliance. To the contrary, it reflects our mission to explore innovative instructional models that are best for children,” it said.

In 2019, the State School Board’s special education staff conducted monitoring visits at American Preparatory Academy. At that time, board staff issued a notice of noncompliance and corrective action over more than $4 million in unallowable costs pertaining to state special education programs. The findings were appealed and in December 2019, the parties entered mediation.

The mediation resulted in a signed settlement agreement that included “a stipulation for a new audit of APA’s use of state special education funds for fiscal year 2019.”

Carolyn Sharette, American Preparatory Academies executive director, said after monitoring visits, undergoing mediation and an audit, the schools still don’t have the information they need to bring their programs into compliance.

“It’s our desire to be in compliance at APA and we believe we still don’t have the information that we need because the special education staff at USBE has failed to meet with us to discuss their concerns about specially designed instruction,” she said.

The audit recommends that the State School Board “collaborate with local education agencies, the Utah Legislature and the U.S. Department of Education to consider policy actions that will more clearly differentiate between general education efforts ... and specially designed instruction. Allocation of funds between general education and special education programs and/or restrictions on funds for special education programs, factoring in the federal maintenance of effort requirement, should also be considered.”