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Birmingham’s Legacy Prep Charter School misspent or did not accurately track $311,517 in spending, over the course of two years, a state audit recently found. Some of that money was from public funds.

The audit, performed at special request of the Alabama State Department of Education, marked the first time the Alabama Department of Examiners of Public Accounts was asked to conduct an audit of a charter school.

“Compliance monitoring led us to know there were issues,” State Superintendent Eric Mackey said, referring to the regular monitoring cycle of schools and districts. “It was serious enough that it got elevated,” he added, and resulted in the department asking for the special audit.

Many of the audit’s findings were related to the school’s lack of proper record-keeping; others were related to the school’s governance and compliance with the school’s charter contract, according to documents reviewed by AL.com.

The school’s CEO and founder, Jonta Morris, who resigned in 2021, was initially asked to repay $311,000, some of which was initially spent on TopGolf, airfare, gift cards and Life Touch Massage.

Chief Examiner Rachel Riddle said Morris eventually provided documentation and did not have to repay any amount. Ultimately, no one will repay any amount, she said.

“Our audit could not find one person that was culpable or should owe back the $311,000,” Riddle said, because of “the lack of organization and adequate documentation.”

“It’s all about record keeping,” Riddle added. “That would have solved so much of this.”

Among the findings:

• $12,929 of state education funds spent on services and items not allowed,
• $298,588 spent on services and items where it was unclear where the funds came from and if the purpose was allowed under state law,
• Failure to properly track money received from grants and how that money is used,
• Failure to follow the state bid law or use the state’s approved list of vendors,
• Failure to implement internal controls to ensure proper use of credit cards,
• Failure to ensure 20% of the governing board at all times was composed of parents of currently enrolled students,
• Failure to keep proper records, including minutes of board meetings and personnel records,
• Failure to properly document employee bonuses and stipends, and
• Failure to properly receipt and deposit money collected on behalf of the school.

Riddle said auditors did not find any evidence of criminal activity but forwarded the audit to the Attorney General’s office as a matter of routine. The Department of Examiners routinely audits public school districts, but this is the first public charter school audit they have performed.

Morris’ attorney, William White, said because Morris resigned in September 2021, a month before the audit began, she had difficulty finding the documentation the auditors requested.

“Ms. Morris worked closely with the Examiner’s Office over several months to access her former work email and locate documentation to support these expenses, including invoices, receipts, and private grant letters,” White wrote in an email to AL.com. “As a result of this effort, the entire amount in question was relieved.”

Current Head of School Reneta Johnson told AL.com they took the findings seriously and have worked to improve operations in the areas pointed out as needing improvement.

“I am pleased to share that the audit findings highlighted in the examiner’s report have already been corrected and, in most cases, were implemented before the commencement of the audit,” Johnson wrote in an email to AL.com.

Johnson said the school has updated financial policies on the bid process, the use of credit cards and proper receipting of funds among other actions.

The school hired an experienced full-time chief financial officer, too, an action that Riddle said should improve all aspects of financial actions and record-keeping.

Mackey said he felt good about how school officials handled the findings and is satisfied financial issues have been properly handled. “The problem got cleared up,” he said.

Legacy Prep operates under the oversight of the Alabama Public Charter School Commission, a ten-member board appointed by the state board of education from a slate of nominees from key elected officials, including Gov. Kay Ivey.

Charter schools post annual reports, and are supposed to have regular quality review by outside contractors to catch potential issues. A May 2021 quality review report by an outside contractor did not indicate any financial concerns.

In response to a records request from AL.com, the Alabama State Department of Education provided Legacy Prep’s monitoring report for the 2019-20 school year showing their financial procedures were not in compliance with state law, but that school officials had indicated they were working to “clean up” problems.

Legacy Prep, which opened with 150 kindergarten through second graders at the start of the 2019-20 school year, enrolled 350 children in kindergarten through fourth grade last year. This year, the school added fifth grade.

The school approved a $5.3 million budget for the current school year, of which $3 million comes from state education funds. The budget for the years covered by the audit – FY20 and FY21 – were $2.2 million and $3.1 million, respectively.