Audit sharply critical of Perpich Center management

Updated: 4:32 p.m. | Posted: 11:37 a.m.

The state arts agency that runs schools in Golden Valley and Woodbury is in need of an overhaul, according to a pair of reports released Thursday by the Minnesota legislative auditor.

The long list of problems in the auditor's program evaluation include lax oversight from the Perpich Center for Arts Education board, low enrollment and test scores at the schools and low staff morale. A separate financial audit also found inadequate oversight and that the agency failed to correct problems identified in previous audits.

As part of the mismanagement, the financial audit found that the Center spent nearly $17,000 from the state's Arts and Cultural Heritage Fund on staff and activities not authorized for the funding. It recommends that the Center reimburse the state for that amount.

The Perpich Center was created in 1985 to offer arts outreach to school districts, and in 1989 its namesake two-year arts high school opened. In 2013 it also took over management of Crosswinds Arts and Science middle school. Complaints about management of that school surfaced last spring, and former arts high school employees have spoken out about a hostile work environment at their school.

The legislative audit confirmed some of those worries, noting that arts high school enrollment took a dive after 2011, from 306 students to 187 in 2016. The report says 78 percent of students come from the metro area, which runs counter to the school's statutory requirement that it "must plan for the enrollment of pupils on an equal basis from each congressional district".

Students also aren't doing well on state tests, and the report says the arts high school didn't even give the required 11th grade state math test in 2014.

The bleak picture continued with the Crosswinds school. Enrollment is lower than it's been since the Perpich Center took over management, and Crosswinds math and reading test scores are low and declining.

The financial audit also uncovered multiple problems. "Just about every area we looked at we found a variety of errors," said deputy legislative auditor Cecile Ferkul.

"If the Perpich Center were a business that would be so many red flags that it's time to close," said Rep. Randy Jessup, R-Shoreview. "Perhaps the appropriate next step would be to gracefully wind down these two schools."

The auditor didn't make specific recommendations for a path forward, but closure of the agency was one of the options offered. However, the report also noted that the Perpich Center could drop management of Crosswinds or drop both schools, potentially allowing them to continue as charter schools.

That route would present some challenges. The report said the arts high school spent $20,442 per student last year, compared to $11,527 per student at the average Minnesota school district in 2015. That means funding would likely take a hit if the high school were converted to a charter school.

"The high school has been a great asset for our state," said House education policy committee chair Sondra Erickson, R-Princeton.

Erickson said she might favor just taking Crosswinds out from under Perpich control.

"Perpich is salvageable but Crosswinds I'm very, very concerned ... I don't know if the Perpich board is capable of understanding what they must do to ensure that those students get the education we expect," she said.

Perpich Center staff and board members remained optimistic about the agency's future.

"We are happy to receive the feedback of the auditors and look forward to implementing many of recommended changes," newly-hired arts high school principal Ahava Silkey-Jones said. Silkey-Jones added she's seen positive staff morale since taking the position and that the school recently hired a new admissions coordinator to help boost enrollment.

Nine of the Perpich Center's 15 board members are also new as of July. "I think we have a really incredible team coming forth," said board member Julie Workman. "It seems to me that the adults have done a pretty good job of making a mess for the needs of the student. I believe that it can be corrected."

The audit said the board should start examining enrollment and test score trends, pay closer attention to budgets, and evaluate the executive director annually. A recent board report did recommend a director evaluation, but former executive director Sue Mackert retired earlier this month.

Mackert took over the agency in 2010. The agency is searching for her replacement.