District's financial link to (YRS) charter school questioned Tracy Unified By Alex Gronke Record Staff Writer Published Wednesday, May 28, 2003 TRACY -- Tracy Unified School District's relationship to Discovery Charter School is so tangled that financial deals between the two were sealed without documentation, and thousands of dollars could pass from the district to the school with one party regarding it as a loan, the other as a gift, according to an incomplete independent audit. The recommendations Tracy Unified trustees reviewed Tuesday night arrived several months overdue and too late to be of use this school year. The continuing audit is the first of the district's sole charter school. A Sacramento accounting firm performed the audit of Discovery's finances during the 2001-02 school year. Speaking before the meeting, Trustee Bill Swenson, the Tracy school board's liaison to the charter school, said the school district should have demanded a formal memorandum of understanding clearly outlining the financial link between the two entities before the charter school opened almost two years ago. "As one of seven board members, I was lax in not requiring written documentation of these things," Swenson said. State law requires an annual financial audit by an independent accounting firm of all charter schools. At Tuesday's meeting, Virginia Stewart, Discovery Charter School's principal, presented trustees with about 20 recommendations from the firm that prepared the audit. Chief among them was the need for a memorandum of understanding between Tracy Unified and the charter school. Representatives from both sides are crafting a memorandum of understanding. Stewart said the new arrangement will place the responsibility for overseeing the school's roughly $1.5 million financial operation with the charter school. During Discovery's first two years of operation, Tracy Unified's business services department handled the charter school's finances, performing such tasks as paying salaries and purchasing equipment. Over time, school officials lost track of what money was Tracy Unified's and what money belonged to the charter school, Stewart said. Unraveling the school's largely undocumented financial history partially accounted for the audit's long delay. "I'm disappointed that our business department didn't provide the necessary documents sooner so that this whole thing could have been done sooner," Swenson said. Stewart said the audit also shows that Discovery is about $365,000 in the hole, although she said she expects a loan from the state and money generated by taking on new students will put the school in the black by next year. Founded by Keith Larick, a former Tracy Unified superintendent, Discovery Charter School has had a rocky first two years in almost every respect save academics. Last fall the school weathered a cash-flow crisis in which it came within 24 hours of losing electrical service. The school also has drawn fire from the teachers union, which opposes the school because its teachers are nonunion. However, Discovery Charter School outperformed every school in the district on state-mandated student-assessment tests. Casey Goodall, Tracy Unified assistant superintendent for business, said that because this was the school district's first charter school, he doesn't know if the informal relationship between Tracy Unified and the charter school is typical. * To reach reporter Alex Gronke, phone 833-1142 or e-mail agronke@recordnet.com |
| Tracy Parents against MTYRS and YRS |