Keystone Academy board studies NHA plan to refinance company

At the Aug. 12 meeting of the Keystone Academy board of directors, the group heard a lengthy presentation on the proposed refinancing of National Heritage Academies, a private company which runs the academy.
At the end of its Sept. 9 meeting, the board went into closed-door session with its attorney Candace Sorensen for attorney-client privileged information on the same subject.
On Aug. 12, Bob Owen, NHA Chief Financial Officer, attended the meeting virtually (plus three other NHA officials) to introduce the refinancing information and field questions about potential savings, the new non-profit building owner, board responsibilities, and financing rates.
During its Sept. 9 meeting, NHA representative Andrew Roth said Keystone Principal Jorvanna Drain will go to an investment class in late October or early November where planning for ESSER funds coming to Keystone will take place.
Roth said the first ESSER report will come out in the second half of September and each month thereafter the board will get an ESSER report.
Principal Drain said the funds could be used to hire more paraprofessionals, Keystone substitute teachers and make them able to hold more elaborate field trips to make a link for the kids with the outside world. She also said she would like to see phonics support in the upper grades if that is a proper use of the ESSER funds.
She referred to the $13.2 billion allotted for the Elementary and Secondary School Emergency Relief Fund, signed into law on March 2020 as part of the $30.75 billion Coronavirus Aid Relief and Economic Security (CARES) Act. ESSER II funds of $54.3 billion were signed into law in December 2020 and ESSER III added just under $123 billion. The funds go to states who then send it on to schools, including charter schools. There are many strings attached.
Keystone vice president Steve Harsant said about the ESSER funds, “It just would be nice to know what decisions have been made. A summary.”
Attorney Sorensen said there is a lot of grant money and it hasn’t bubbled up to the board yet and it should.
She said she is recommending to all the boards she represents that they hire a financial advisor, specializing in school finance, to watch the use of the ESSER funds.
Sorensen said usually you can’t use these funds to supplant something you have been using state funds for. The funds should not just go to profit but be used to supplement education.
She said Adam Holcomb is putting together a proposal that she could pass on to the board. He could be someone independent working for the board to watch the ESSER funds, she said.
She said the annual financial audits are not looking for moving the funds around.
Sorensen said in the future if the students are found not to be properly educated, someone may say, “How about all that money we spent?” and may look very closely on how the funds were used. Then the board could say, “We relied on our consultant,” Sorenson said, showing the board was serious about oversight.
Board vice president Steven Harsant said he would like to see the pro formas to find out the profit NHA is making on Keystone. Sorensen said she sent the pro formas she was able to get to all the board members. [Pro forma is a method of calculating financial results using certain projections or presumptions, according to Investopedia.] She said records show that NHA charges a 60% management fee and what is covered by this is unknown and they cannot calculate the affect the new agreement would have on the Keystone budget. She said, hopefully, she will get more information, which she would then pass on to the board.
“NHA said from the beginning, ‘We’ll never tell what our profit is,’” Sorensen said. She suggested they talk further about this in their closed session.
In other business at the Sept. 9 meeting, the board:
• Heard Drain report on the COVID learning loss revealed by tests used by Keystone, as requested by board members at their last meeting. She said 667 students have enrolled this school year, with capacity at 768. There are 41% of the students qualifying for free and reduced lunches. Everyone gets free breakfast and lunch paid for by the federal government, if they opt in, she said. Drain said there were almost 462 students at their Family Fun Night event;
• Learned three members – president Vesta Losen, vice-president Harsant, and secretary Pat Kirkpatrick – are going to the 2021 NHA Board Symposium on Oct. 26 at The Inn at St. John’s in Plymouth. Sessions are set on NHA Refinancing, ESSER Funds, Teacher Recruitment and Retention, and Excel-erate Program;
• Approved aimswebPlus as the school’s reading assessment system for another year. Michigan requires students in grades K to 3 to be assessed at progress in reading at least three times a year, the first conducted during the first 30 days of school;
• Ratified the 2021-22 Parent and Student Handbook, which Roth said had no substantial changes;
• Approved the Teacher Evaluation and Employee Certification Warranty resolution;
• Approved payment of $286 as its share of the Regional Co-Athletic Directors Stipends. There are two athletic directors and they get $2,000 each. The $4,000 is split among the 14 schools in the region that compete against each other;
• Heard Drain announce Keystone plans to do all of its sports this year, but they will see how COVID goes to finalize plans. Fall sports are volleyball for girls in seventh and eighth grades and soccer for boys in fifth through eighth grades. Band will be for those in sixth, seventh, and eighth grades; and
• Heard president Losen read a letter that as an individual she is sending to elected representatives in Washington, D.C. voicing concerns about a recent vote in the House of Representatives not to give charter schools federal funding. She encouraged other board members to send letters as well on the issue.