Minneapolis charter school shutters after financial crisis, parents left scrambling
Staff members Warda Mohamed, Ahleah-Lyn Huggins, and Isabella Quiroga embraced after the school board voted to close JJ Legacy in an emergency meeting.
Courtesy Aaron Nesheim | Sahan Journal
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Parents and students of a charter school in north Minneapolis have less than a week to find a new place to learn. JJ Legacy School is closing this Friday. Its board held an emergency meeting late last week that revealed the school's troubled financial situation.
The Minnesota Department of Education overpaid the school after the number of students was overreported. According to reporting from the Sahan Journal, that meant that by the end of last month, the school had received — and spent — more than its budget for the whole school year. The school is not only out of money, it’s 700,000 dollars in debt. Sahan Journal Education Reporter Becky Dernbach has been following all of this and she joined MPR News Host Cathy Wurzer.
Use the audio player above to listen to the full conversation.
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Audio transcript
CATHY WURZER: Parents and students of a charter school in North Minneapolis have less than a week to find a new place to learn. JJ Legacy School is closing this Friday. Its board held an emergency meeting late last week that revealed the school's troubled financial situation. The State Department of Education overpaid the school after the number of students was overreported.
According to the Sahan Journal, that meant that by the end of last month, the school had received and spent more than its budget for the whole school year. The school is not only out of money. It's $700,000 in debt. Sahan Journal education reporter Becky Dernbach has been following all of this, and she's on the line to explain. Becky, thanks for joining us.
BECKY DERNBACH: Thanks for having me.
CATHY WURZER: Sounds as though the parents were caught offguard, but so is the charter school's board. Why wasn't the board informed as to the seriousness of this situation?
BECKY DERNBACH: Yeah, I think this really came as a surprise to everybody. And the board actually was made up entirely of new members for people who were seated just last month. So they hadn't even really had a chance to get caught up to where things were. And the head of school has been on family leave, caring for her husband. And the school was also without an accountant for more than a year. So there were just a lot of turnover and a lot of people who would normally know what was going on who were not available, or the accounting position was just unfilled.
CATHY WURZER: So, gosh, how did the school's financial problems become so large and unwieldy?
BECKY DERNBACH: Yeah, so the precipitating event that is causing the school to close is the overreporting of students to the Minnesota Department of Education. So the school's authorizer, which is the nonprofit that performs a monitoring and oversight role over charter schools, discovered just a few days ago, really, that the number had been overreported.
The Minnesota Department of Education was paying the school for 183 students, but they currently have 57. So that's three times more than they have. And so that's why they were overpaid, as you stated in your intro. But then on top of that, the school has no fiscal reserves, and they're more than $700,000 in debt, as you said. So that's sort of where they knew they were starting. They knew there was debt that needed to be addressed. But then that could have been a manageable problem, if not for the fact that they're totally out of money.
CATHY WURZER: Now, I remember when you were back, back in August, you were on the show, and you were talking about this school. And the school, as I recall, was being evicted from its former location. There was like a fight over repairs in the building or something like that. So did that play into any of this at all?
BECKY DERNBACH: I think that that really became a focus for a lot of the energy around the school. And the legal fight over the eviction really took a lot of time and energy. And in the meantime, the school board had just one member for most of last year. And this was the main issue that was taking their attention, was this issue with the eviction and the repairs.
And so then, in the meantime, there wasn't-- this fall, when they were trying to regroup, the authorizer was asking them for things, like, let's either find or create a budget for this school year. So there were just some very basic tasks that didn't get done or that they didn't have capacity to do. And I think they were really consumed by the eviction issue.
CATHY WURZER: There was only one school board member for much of the year? I don't believe that's legal, right?
BECKY DERNBACH: No, it's not. But yeah, they said they were having trouble retaining the school board. Charter schools need to have at least five board members. They said they were having trouble. Last summer, when I asked them about it, due to the legal and financial problems of the school, they were having trouble retaining board members. And like I said, this eviction fight was really taking a lot of energy and focus.
CATHY WURZER: I guess someone else would also ask, why didn't the Department of Education-- who's overseeing charter schools like this in the state of Minnesota?
BECKY DERNBACH: Yeah, so charter schools are overseen, there are a couple of a couple of layers to it. I mean, first of all, the school board is in charge of governance of the school. And obviously, that's challenging when you have only one member on the school board. And then the authorizer is in charge of monitoring the school for compliance issues, making sure that-- checking the financial performance and operational performance. And then the state of Minnesota, in turn, oversees the authorizer and occasionally intervenes if there are complaints of issues that they can weigh in on.
But charter schools are really designed to be autonomous and to let people create the school that they want to create. That's sort of the idea of charter schools. It's where schools are supposed to be able to experiment and do things their way. And that means that there are some laws and regulations that apply to public schools that don't apply to charter schools. And it also sometimes means that if something is going off the rails, that nobody steps in to help.
CATHY WURZER: Thanks for the background on that. I appreciate that, Becky. I'm wondering, you're right. When it comes to charter schools, they are set up so staff and teachers and parents, they can try different things. This particular school was interesting in that could you explain the mission and what staff and teachers said about the school?
BECKY DERNBACH: Yeah, a lot of staff and families described it as a really vibrant place where the majority of students in the school were Black, and they described it as a place where they could really be themselves, where their culture was celebrated, where they didn't have to deal with racism at school. And they could really just thrive as Black children and create a space that was by them and for them. And it was a really special place for a lot of the families and the staff that went there.
And everyone at the meeting was just shocked and heartbroken that something like this could could happen and could come on so suddenly. And we're really grieving the community they built. And the school board meeting felt more like a wake. And people started sharing their remembrances of the school and gratitude through tears. And it was very emotional.
CATHY WURZER: What are parents planning to do next?
BECKY DERNBACH: Well, I think it's going to vary. Excel Academy, which is a charter school in Brooklyn Park, has said that it will take as many of the students as want to attend. And so they are partnering with the school to make the transition there as seamless as possible. Obviously, Brooklyn Park is not the same as North Minneapolis. So geographically, that might not be convenient for everybody. And I think that some parents I talked to are looking at Excel Academy. Some said that wasn't going to be workable for them. And so they were going to have to figure something else out.
But yeah, the last day of school is this Friday, January 12. And they have a pretty short window to figure it out. The school did provide a handout of other schools in the area. There is a school choice fair this Saturday. And so hopefully parents are able to connect with and understand what their options are and pick a school. But yeah, that's sort of what they're looking at now.
CATHY WURZER: So final question here, once kids find a different place to learn and get settled down, there's still, I would suppose, the debt. Does the school have to repay the debt at all? Or what happens with the finances? Do you know?
BECKY DERNBACH: I don't know right now. I'm trying to find that out. There's a lot that's unclear right now. This all happened pretty suddenly. And even the authorizer was saying they've never had to close a school with this much debt before. So it's not totally clear at this point what will happen. But I will certainly be trying to find out.
CATHY WURZER: I'm sure you will. You do a really good job. Becky, thanks for the time.
BECKY DERNBACH: Yeah, thank you.
CATHY WURZER: Becky Dernbach is an education reporter for Sahan Journal. You can find her story about this school at sahanjournal.com. We'll also have a link to it on our website. That is mprnews.org.
According to the Sahan Journal, that meant that by the end of last month, the school had received and spent more than its budget for the whole school year. The school is not only out of money. It's $700,000 in debt. Sahan Journal education reporter Becky Dernbach has been following all of this, and she's on the line to explain. Becky, thanks for joining us.
BECKY DERNBACH: Thanks for having me.
CATHY WURZER: Sounds as though the parents were caught offguard, but so is the charter school's board. Why wasn't the board informed as to the seriousness of this situation?
BECKY DERNBACH: Yeah, I think this really came as a surprise to everybody. And the board actually was made up entirely of new members for people who were seated just last month. So they hadn't even really had a chance to get caught up to where things were. And the head of school has been on family leave, caring for her husband. And the school was also without an accountant for more than a year. So there were just a lot of turnover and a lot of people who would normally know what was going on who were not available, or the accounting position was just unfilled.
CATHY WURZER: So, gosh, how did the school's financial problems become so large and unwieldy?
BECKY DERNBACH: Yeah, so the precipitating event that is causing the school to close is the overreporting of students to the Minnesota Department of Education. So the school's authorizer, which is the nonprofit that performs a monitoring and oversight role over charter schools, discovered just a few days ago, really, that the number had been overreported.
The Minnesota Department of Education was paying the school for 183 students, but they currently have 57. So that's three times more than they have. And so that's why they were overpaid, as you stated in your intro. But then on top of that, the school has no fiscal reserves, and they're more than $700,000 in debt, as you said. So that's sort of where they knew they were starting. They knew there was debt that needed to be addressed. But then that could have been a manageable problem, if not for the fact that they're totally out of money.
CATHY WURZER: Now, I remember when you were back, back in August, you were on the show, and you were talking about this school. And the school, as I recall, was being evicted from its former location. There was like a fight over repairs in the building or something like that. So did that play into any of this at all?
BECKY DERNBACH: I think that that really became a focus for a lot of the energy around the school. And the legal fight over the eviction really took a lot of time and energy. And in the meantime, the school board had just one member for most of last year. And this was the main issue that was taking their attention, was this issue with the eviction and the repairs.
And so then, in the meantime, there wasn't-- this fall, when they were trying to regroup, the authorizer was asking them for things, like, let's either find or create a budget for this school year. So there were just some very basic tasks that didn't get done or that they didn't have capacity to do. And I think they were really consumed by the eviction issue.
CATHY WURZER: There was only one school board member for much of the year? I don't believe that's legal, right?
BECKY DERNBACH: No, it's not. But yeah, they said they were having trouble retaining the school board. Charter schools need to have at least five board members. They said they were having trouble. Last summer, when I asked them about it, due to the legal and financial problems of the school, they were having trouble retaining board members. And like I said, this eviction fight was really taking a lot of energy and focus.
CATHY WURZER: I guess someone else would also ask, why didn't the Department of Education-- who's overseeing charter schools like this in the state of Minnesota?
BECKY DERNBACH: Yeah, so charter schools are overseen, there are a couple of a couple of layers to it. I mean, first of all, the school board is in charge of governance of the school. And obviously, that's challenging when you have only one member on the school board. And then the authorizer is in charge of monitoring the school for compliance issues, making sure that-- checking the financial performance and operational performance. And then the state of Minnesota, in turn, oversees the authorizer and occasionally intervenes if there are complaints of issues that they can weigh in on.
But charter schools are really designed to be autonomous and to let people create the school that they want to create. That's sort of the idea of charter schools. It's where schools are supposed to be able to experiment and do things their way. And that means that there are some laws and regulations that apply to public schools that don't apply to charter schools. And it also sometimes means that if something is going off the rails, that nobody steps in to help.
CATHY WURZER: Thanks for the background on that. I appreciate that, Becky. I'm wondering, you're right. When it comes to charter schools, they are set up so staff and teachers and parents, they can try different things. This particular school was interesting in that could you explain the mission and what staff and teachers said about the school?
BECKY DERNBACH: Yeah, a lot of staff and families described it as a really vibrant place where the majority of students in the school were Black, and they described it as a place where they could really be themselves, where their culture was celebrated, where they didn't have to deal with racism at school. And they could really just thrive as Black children and create a space that was by them and for them. And it was a really special place for a lot of the families and the staff that went there.
And everyone at the meeting was just shocked and heartbroken that something like this could could happen and could come on so suddenly. And we're really grieving the community they built. And the school board meeting felt more like a wake. And people started sharing their remembrances of the school and gratitude through tears. And it was very emotional.
CATHY WURZER: What are parents planning to do next?
BECKY DERNBACH: Well, I think it's going to vary. Excel Academy, which is a charter school in Brooklyn Park, has said that it will take as many of the students as want to attend. And so they are partnering with the school to make the transition there as seamless as possible. Obviously, Brooklyn Park is not the same as North Minneapolis. So geographically, that might not be convenient for everybody. And I think that some parents I talked to are looking at Excel Academy. Some said that wasn't going to be workable for them. And so they were going to have to figure something else out.
But yeah, the last day of school is this Friday, January 12. And they have a pretty short window to figure it out. The school did provide a handout of other schools in the area. There is a school choice fair this Saturday. And so hopefully parents are able to connect with and understand what their options are and pick a school. But yeah, that's sort of what they're looking at now.
CATHY WURZER: So final question here, once kids find a different place to learn and get settled down, there's still, I would suppose, the debt. Does the school have to repay the debt at all? Or what happens with the finances? Do you know?
BECKY DERNBACH: I don't know right now. I'm trying to find that out. There's a lot that's unclear right now. This all happened pretty suddenly. And even the authorizer was saying they've never had to close a school with this much debt before. So it's not totally clear at this point what will happen. But I will certainly be trying to find out.
CATHY WURZER: I'm sure you will. You do a really good job. Becky, thanks for the time.
BECKY DERNBACH: Yeah, thank you.
CATHY WURZER: Becky Dernbach is an education reporter for Sahan Journal. You can find her story about this school at sahanjournal.com. We'll also have a link to it on our website. That is mprnews.org.
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