[Ed. Note: The following was sent by me via email on July 18, 2024 to the chair of the DC council, Phil Mendelson, and DC’s deputy mayor for education, Paul Kihn. AFAIK, no DC media outlet has covered the fiscal distress and possible closure of Eagle Academy. That stands in contrast to the fiscal distress and possible closure of Eagle’s Nevada branch, which has been fulsomely covered in the press there since spring. Thus far, I have received no response to this email, on which I also copied members of the DC charter board.]

Dear Chairman Mendelson and Deputy Mayor Kihn,

As a DC resident and education analyst, I am writing now because your actions now can prevent further damage to families and DC taxpayers by Eagle Academy charter school and, potentially, by other DC charter schools.

As you may know, the charter board voted on July 10 to cite Eagle for fiscal mismanagement and to put it on a corrective fiscal action plan (see more here: https://dcpcsb.org/special-board-meeting-july-2024).

But most of Eagle’s fiscal problems–right now affecting some of the most vulnerable students in DC–could have been avoided with better and more diligent oversight:

–Eagle Academy had YEARS of fiscal red flags that were never dealt with adequately (or at all) by the DC charter board—and despite issuing a notice of fiscal concern in January 2024, the charter board did nothing to make the public (including families at the school) aware.

–The board of Eagle Academy has been almost completely ineffective in its fiscal oversight of the LEA.

–Families at Eagle were apparently not told until early JUNE 2024 that there were any problems at the school, despite the departure of Eagle’s CEO in May; knowledge of fiscal problems in October 2023 by Eagle’s board; and the intervention of the DC charter board in January 2024.

–Eagle is now looking for another LEA to partner with and an entity to sublet its underutilized Ward 8 leased building owned by DC—even as DCPS can help Eagle families and has a swing space crisis that Eagle’s DC-owned building could alleviate.

Solutions to these problems have always been in your power—which is why I urge you now to act to help Eagle families and DC taxpayers immediately by way of the solutions outlined below.

1. PROBLEM: Eagle Academy had YEARS of fiscal red flags that were never dealt with adequately (or at all) by the DC charter board—and despite issuing a notice of fiscal concern in January 2024, the charter board did nothing to make the public (including families at the school) aware.

At the 6 minute, 50 second mark of the July 10 charter board meeting video, the charter board’s chief operating officer, Will Henderson, noted that the charter board’s concern with Eagle’s financial distress reached a “new high point” on June 28, 2024, when Eagle had only 6 days of cash on hand.

But as shown by the charter board’s own accounting since 2016, Eagle has routinely had low levels of cash on hand, often in violation of the charter board’s own recommendations:

–November 2018 FAR (financial analysis report): 3.2 days of cash on hand in 2016 and 4.8 days of cash on hand in 2017 (https://www.livebinders.com/media/get/MTc5ODUwNjc=)

–November 2019 FAR: 7 days of cash on hand (https://dcpcsb.egnyte.com/dl/qDfQOo8sSC/)

–January 27, 2020 (in the charter board’s report on Eagle’s application to have a new campus): 13 days of cash on hand (https://www.livebinders.com/media/get/MjAwNDg1NzY=)

–November 2020 FAR: 13 days of cash on hand (https://dcpcsb.egnyte.com/dl/biu7bUGJby)

–November 2021 FAR: 40 days of cash on hand (https://dcpcsb.egnyte.com/dl/XwUqqyAsEa/DCPCSB_FAR_Report_FY20_Final.pdf_)

–November 2022 FAR: 69 days of cash on hand (https://dcpcsb.egnyte.com/dl/Tm1JvmtBeN/FY_2021_Financial_Analysis_Report_(FAR).pdf_)

–November 2023 FAR: 12 days of cash on hand (https://dcpcsb.egnyte.com/dl/9rv9ElIrHO/FY_2022_Financial_Analysis_Report.pdf_)

There were many more troubling fiscal signs:

One of the most obvious (and ignored) signs was the outsize pay of Eagle’s long-time (and recently resigned) CEO, Joe Smith. Smith was paid annually more than either the mayor or the DCPS chancellor at a school that always had fewer than 1000 kids.

Other obvious–and entirely ignored—fiscal issues with Eagle include the self-dealing of loans by Eagle staff members to the school; nonpayment of contractors by the school; Eagle’s violations of the law in building a new building; and Eagle’s outsize travel and marketing budgets.

(Using public documents, I and other DC residents outlined these fiscal issues: see here https://drive.google.com/file/d/1viMsSpe3YvzaWDQwK51j9g9-Z2omqc3l/view?usp=sharing and here https://drive.google.com/file/d/1u9Zm8eLcDERNLt0ePOxXuYffDniPf4u3/view?usp=sharing

In 2019 DC’s previous AG received the information linked above and never meaningfully followed up, while both Mayor Bowser and Mr. Mendelson were also informed of serious issues around Eagle without any follow-up. This spreadsheet contains a timeline of these and other problematic issues up to the present.)

In January 2023, charter board staff said in the 20-year review of Eagle that the LEA had no fiscal mismanagement. On the basis of that review, the charter board voted to continue Eagle’s charter.

A year later, on January 22, 2024, the charter board issued an “out of compliance” notice to Eagle for its finances. The charter board has not made this notice publicly available as of this email. The first I learned about it was at that July 10, 2024 charter board meeting. [Ed. Note: This notice of concern appears to still not be available on the charter board website as of this blog post; on July 14, I asked the charter board about making it publicly available and have received no update.]

Also at that July 10, 2024 charter board meeting, Eagle’s current head of school said that the school’s budget began to “shift” in October 2023, such that the school had its first round of staff cuts in December 2023.

Importantly, NONE of the charter board’s current fiscal concern around Eagle was publicly revealed until that July 10, 2024 charter board meeting—and was never mentioned in the 26 minutes that the DC council questioned the charter board executive director at the April 5, 2024 council budget oversight hearing.

From December 2023 on, the only notice of concern I found on the charter board website regarding Eagle was about the school violating the charter board’s mystery caller initiative. (This violation was discussed at two April 2024 charter board meetings (see here and here), while the charter board voted to lift that notice of concern at its June 2024 board meeting.)

ALL of this means that the charter board has ensured DC taxpayers have been uninformed about Eagle’s recent financial distress while the charter board has ignored years of troubling fiscal issues at the school. 

You should also be aware that there are possible legal issues arising from this lack of oversight:

In SY23-24, Eagle began operating a charter school in Clark County, Nevada, with Joe Smith as CEO. In March 2024, the Nevada charter authority registered its concern about $800,000 of taxpayer funds that Eagle apparently owes the state and that the school has said it cannot pay back. On June 21, 2024, the Nevada charter authority voted unanimously to terminate Eagle’s contract pending a ”cure” for that fiscal issue in 30 days.

(You can see the video discussion of Eagle by the Nevada board on 6/21/24 starting at the 2 hour 12 minute mark of the video here. Materials for that meeting are here. News stories I found about this are here and here.)

Given that Eagle represented itself in its Nevada application as an experienced and successful charter operation because of the good rating the charter board gave its DC branch under CEO Joe Smith, I have asked our attorney general to investigate what DC’s legal liability is for the failure of Eagle’s Nevada branch.

Finally, you should be aware that the charter board’s executive director made clear on July 10 (at the 1 hour 31 minute mark of the charter board meeting video) that even if the charter board determines that Eagle has committed a criminal act, the charter board will not report the LEA to the DC attorney general until after conducting its own investigation.

This statement appears to be prioritizing the charter board and Eagle over the families at that school and the DC taxpayers underwriting it.

SOLUTION:

–Hire an independent auditor to review the charter board’s fiscal oversight of DC charter schools, including examining how the fiscal information reported in the FAR is used by the charter board and reviewing and implementing best practices for DC charter fiscal oversight.

–Institute multiple measures of charter fiscal health at multiple stages in each fiscal year, to be adopted immediately by the charter board.

–Institute a cap on charter CEO pay so no CEO receives more than 10% higher than the average of all DC charter CEO pay. (See here for a visualization.) Ensure that pay for all administrators at each charter LEA constitutes no more than 10% of each LEA’s annual revenues and that pay for all executives (a subset of administrators) at each LEA is no more than 1% of annual revenues at each LEA.

–Make the charter board reveal all fiscal concern notices prominently on its website not more than a week after the notices are issued. Mandate that the charter board ensures each charter LEA with fiscal concern notices distributes the notices to families at the LEAs within a week of the notices being issued by the charter board.

–Ensure the charter board immediately informs the DC attorney general about all possible criminal acts by DC charter schools as soon as they are known.

–Ensure the charter board lists dates and agendas for all its board meetings at least a week ahead of time. The information currently on the webpage about the charter board’s 7/10/24 meeting was NOT there the week before that meeting—only the date of the meeting was listed, while the meeting itself was marked as “special” without any information to denote what was being discussed. This disenfranchised Eagle families as well as the general public.

2. PROBLEM: The board of Eagle Academy has been almost completely ineffective in its fiscal oversight of the LEA.

The July 10, 2024 DC charter board meeting made clear that a major problem at Eagle was that the (former) CEO, Joe Smith, was also the school’s CFO. Eagle’s finances were apparently discussed only between the CEO and the school’s former accounting firm.

Not surprisingly, the current head of school noted at the July 10 meeting (at the 1 hour 11 minute mark) that school finances were never discussed publicly. At the 1 hour 20 minute mark, Eagle’s board treasurer, Ms. Briscoe, noted that she had no knowledge of the school’s finances except as presented to her by CEO Joe Smith—even though Briscoe was appointed as board treasurer in April 2023.

Possibly as a result, there were a number of financial red flags that the school’s board never appeared to take action to resolve, including the self-dealing of loans by staff members to the school; nonpayment of contractors; and outsize travel and marketing budgets (as outlined above in linked documents).

In apparent agreement with Eagle’s DC board, CEO Joe Smith left Eagle sometime in May 2024.

SOLUTION:

–Make it illegal for any charter CEO and/or COO to also be the LEA’s CFO.

–Make the charter board look for and report both to DC taxpayers as well as the IRS any loans from charter staff or board members to charter schools. Ensure the charter board issues an affirmative statement annually that each LEA has no such loans or, if not, that the loans have been reported to the IRS by the charter board.

–Delineate explicitly a sworn fiscal responsibility of LEA board members for individual charter LEAs.

–Make legally explicit the fiscal responsibility of charter school staff to intervene, help, and otherwise bring to public attention fiscal problems at their LEAs.

–Ensure that all administrative officers at each LEA resign by signing a legal statement that they have not taken any DC taxpayer funds that they were not owed. The charter board should then keep on file all such documents for at least 7 years, as a way to pursue legal action if needed to recover taxpayer funds.

3. PROBLEM: Families at Eagle were apparently not told until early JUNE 2024 that there were any problems at the school, despite the departure of Eagle’s CEO in May; knowledge of fiscal problems in October 2023 by Eagle’s board; and the intervention of the DC charter board in January 2024.

On June 13, at the public comment portion of a meeting of Eagle Academy’s board in DC, I asked for the date when CEO Joe Smith resigned at Eagle’s DC branch; what was his salary when he resigned; and whether board members could share what they said to families about him leaving before the end of the school year. The chair of the board replied that those were good questions–but would not promise to answer them.

At the July 10, 2024 charter board meeting, the current head of the school said that families were informed in early June 2024 about the school’s fiscal distress.

I hope you can see that all of this is intensely disrespectful:

All Eagle families had entered the lottery to gain seats at the school. By telling them this news after the lottery was over, the school effectively took away the agency of those families. Many of the students who attend Eagle are at risk—so this disenfranchisement means that some of DC’s most vulnerable students are being treated as secondary to the needs of an LEA!

At the few recent board meetings of Eagle I have attended, there were no members of the public besides me nor were there parents besides the one who was also a board member. This is not entirely surprising: Eagle’s DC board meetings have been very poorly advertised, when advertised at all, in some cases violating the open meetings act.

SOLUTION:

–Mandate the charter board ensure that charter LEAs, like DCPS, convey to their families budgets in a timely manner, including any necessary staff changes and any fiscal concerns. That would include informing families within 1 week of any and all notices of fiscal concern issued to the school/LEA by the charter board.

–Mandate that if any notice of fiscal concern or a fiscal issue involving layoffs of staff occurs at a charter school in the lottery period from December 1 through May 1, the charter board must notify My School DC. Mandate that My School DC post a notice about this on its lottery website next to information posted on My School DC about that school.

–Ensure the DC charter board makes all charter LEAs have regularly scheduled, and well-publicized, board meetings attended by both families as well as staff. It is NOT enough to simply say the board meetings are listed somewhere on the internet.

–Ensure the charter board lists dates and agendas for all its board meetings at least a week ahead of time. The information on the charter board website about the charter board’s 7/10/24 meeting was NOT there the prior week; only the date of the meeting was listed, while the meeting itself was marked as “special” without any information to denote what was being discussed.

4. PROBLEM: Eagle is now looking for another LEA to partner with and an entity to sublet its underutilized Ward 8 leased building owned by DC—even as DCPS can help Eagle families and has a swing space crisis that Eagle’s DC-owned building could alleviate.

For years, Eagle has leased the former DCPS school McGogney from DC rent-free in exchange for renovation credits.

In SY23-24, Eagle had 269 students at McGogney, which has at least 70,000 square feet and thus space for about 600 students.

At the July 10, 2024 charter board meeting, the head of Eagle’s board noted (at the 29 minute mark) that the LEA is pursuing a merger with another LEA as a way of providing a stable future for the school. The charter board’s financial corrective action plan calls for Eagle to identify an entity to sublet unused space in McGogney.

As DCPS finds itself in a swing space crisis, particularly EOTR, it behooves both of you to examine how DC-owned buildings like McGogney can be deployed to assist the mandatory (not optional) schools that DC is obliged to run. The current iteration of the master facilities plan (MFP) has no record of utilizations of DC-owned and leased school buildings. Yet my analysis of just four of these leased buildings shows that an additional 1500 students could easily be accommodated. It is thus reasonable to assume that many more students could be accommodated in the remaining 27 DC-owned former DCPS school buildings leased to charters.

It also behooves both of you to examine how DC can step up and offer Eagle families stability that has been denied them through the poor oversight and communication outlined here.

SOLUTION:

–Provide immediate relief and stability to Eagle families by ensuring DCPS takes over operations of the school at McGogney.

–Use part of the McGogney building as much-needed swing space for W8 DCPS renovations.

–Immediately update the MFP to include utilizations of DC-owned school buildings leased to charters and ensure DCPS uses this information to assist with identifying swing space.

As the solutions above outline, YOU have the agency and power right now to ensure the interests of DC taxpayers and families are prioritized in all of this. 

Ward 8 resident Tina Batchelor has highlighted exactly what is at stake:

“If we continue to allow private entities to destabilize the local public schools for profit, while hiding under the cover of being “nonprofits,” then the foundation of our neighborhoods and commitment for safer spaces in DC is unattainable. It’s this inability to hold such organizations accountable that gives rise to those that want to dismantle Home Rule and the DC government structure altogether. Is what Eagle has done true for all charter schools? No; but the concentration of charters in the lower income wards/neighborhoods, which ultimately garners additional federal funding per student, is not a mere coincidence. It’s a money grab.”

Please apprise me of what you will do to provide much better oversight and help going forward. Thank you.

Valerie Jablow, DC resident since 1991