Keystone Academy board president refuses to sign NHA contract

At its regular meeting Aug. 8, Keystone Charter Academy board president asked members of the board to pass a motion to allow board members access to their own money in the bank.
President Vesta Losen said no checks had been written since May 21 by National Heritage Academies, which runs the school, except for a scholarship fund check written in July. This was a great inconvenience, she said.
She said the PTO waited eight months for its money. The student who won the scholarship in May called recently to say she was heading off to college and wondered what happened to her scholarship money.
Losen said she went to the bank with board treasurer Charlene Derrick and put her name on the account as a signatory. Losen’s name has been on the account since the school started.
She said the money for the school comes from the State and goes to Bay Mills Community College, which charters Keystone, and Bay Mills takes its 3% cut and then the money goes to NHA and $35,000 of it is sent on to Chase Bank in Belleville for the Keystone board account.
“We had a treasurer with nothing to do for six years,” Losen said, noting there were no checks to sign. “Our paperwork says there is $35,000 we can spend … by the board with board signatories. We want a checkbook.”
“You won’t get a checkbook,” said NHA representative Andrew Roth. “This will cause a red flag for the audit.”
Losen said the board can have an audit of these funds and the board will pay for it.
“Our attorney thought we were doing this,” Losen said. “I didn’t know better and I’m sorry,” she said of not knowing about the wording in the contract with NHA that says they have access to their money in the bank. The contracts are not considered except every six or seven years when the school’s charter is reapproved.
Roth said that the lapse in communications with NHA came with the change of principals.
“This is the document I have to sign and it’s wrong,” Losen said holding up the contract with NHA. “Tonight we need to set aside some money … by resolution or motion …” that can be used for emergency purchases.
She said when her husband passed, flowers came from the board, but actually they came from board vice president Darren Hickonbottom, who used his own money to send the flowers, because money wasn’t otherwise available.
Then, recently, board secretary Connie Shull’s father died and Losen said she called the former NHA representative Jeff Henders and he didn’t return her call.
“I just went ahead and bought a plant and sent it. It was a nice plant,” Losen said, noting the board got a thank-you card.
Roth said he can order the flowers through NHA and all they have to do is call him.
Losen said she tried to call the previous NHA representative and Jeff wasn’t available. She suggested the board set aside $500 that would be available in increments of $50 or less for the 2019 year, and she and Hickonbottom can be reimbursed.
Roth said that was “doable,” but they needed to title it so it could be included in the budget.
Losen said it would be called “Life Events.”
“It’s our money, not NHA’s money,” she said. “It’s our money.”
The board voted to set aside $500 for the Life Event fund for the Keystone Board at up to $50 per event for the year 2019 and forward.
Board members absent were Connie Shull and Hickonbottom.
Losen said she would proceed with fighting with the NHA services agreement because it is too inconvenient and, “It’s just not right.” She said the board would OK the money for an extra audit.
Later in the meeting, Losen produced a prepared resolution that would allow the treasurer and another board member to sign a check after board approval to access money in the board’s account at Chase Bank.
“It will come up as a fail on your audit and then the NHA has a school operating with a red flag,” said Roth. “No way around it.”
“If we make the motion, they will have to address this,” Losen said of NHA.
Roth said there has to be controls on the public money and, “Someone could write a check and pay someone … It would be a misallocation of tax funds …This has to be a controlled process.”
“I’m willing to take it on and try it,” Losen said. “Let’s clarify it. I want to know if you’re with me,” she said to the board.
“I’d like to reimburse the PTO,” said treasurer Char Derrick, who was active with the PTO before becoming a board member. “They’ve waited eight months for payment.”
“There is going to be an audit red flag,” Roth insisted. “It’s an uncontrolled situation.”
“This is a lie,” Losen said of the NHA service contract she held up, that states the board has access to its money in the bank. She said she tried to address it with NHA and NHA has not gotten back to her.
“I want you to understand the repercussions,” Roth said. “You’re the only school in NHA to do this.”
Losen said she couldn’t understand that since they all have to sign the identical contract, but, “Maybe it’s laziness.”
“I’m treasurer. My name would be on it,” said treasurer Derrick. “It makes me queasy.”
“That’s why I put two names here,” Losen said.
“In theory, it would put these pages in your hands,” Roth said, holding up the financial report for the board fund.
“More work for us,” Losen said. “Maybe NHA would like to take that part out.”
Roth said they are right that they have not been getting reimbursement of board funds in a timely manner and that shouldn’t happen.
Keystone Principal Jorvonna Drain said she found she could submit requests for reimbursements to NHA. “I didn’t know. The timeliness was an error on my part, as well, and I apologize … We were in transition…”
“The response time was too long,” Roth agreed. “It’s a general NHA problem … But NHA is going to have a flagged audit.”
Treasurer Derrick repeated that because her name is on the resolution, “I’m queasy.”
Board member Patricia Kirkpatrick suggested they ask the questions of NHA and get the answers by next meeting before deciding on the resolution.
Roth said it would be a misallocation of funds for them to take money out of the bank directly.
“A $1,000 scholarship was awarded in May and she just got it last week,” Losen said.
“Once I realized my role, it was a week turnaround,” Principal Drain said.
“The NHA steps are there to control the funds,” Roth said.
“Why hasn’t somebody questioned this before now?” Losen asked.
A statement in the NHA service agreement reads: “All funds in the Board Spending Account are the property of the School and may be used by the School at the discretion of the Board.”
Kirkpatrick made a motion to table the resolution to have direct access to the checking account until the next meeting and seek information between NHA and the board’s legal counsel. It was seconded by Derrick and unanimously passed by the bare quorum present — three of the five members of the board.
Roth said the action was concerning amending the service agreement.
“When the bureaucracy becomes so cumbersome, it interferes with the operation of the school,” Kirkpatrick said.
Roth said the board could ask its auditor – Plante Moran — for an opinion.
In other business at the two hour and 16-minute meeting, the board:
• Tabled the swearing in of Darren Hickonbottom to serve an additional three-year term to expire June 2022, since he was absent. Also, the swearing in has to be notarized at the same time as the swear-in and no one present at the meeting was a notary;
• Restarted the meeting that had begun a few minutes before 6 p.m. There was no wall clock in the meeting room. Brittany Cook, representative of Bay Mills, who arrived on time but was late for the beginning of the meeting, said she would have to record a penalty if they started early. So, the meeting restarted at 6:02 p.m.;
• Tabled to the next meeting approval of the Teacher Evaluation and Employee Certification Warranty Resolution, which is due Sept. 28, until after the final list of teachers for the year is complete; and
• Tabled to the next meeting approval of the After-School Tutoring Program.