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Manatee Charter School Contract Terminated For ‘Gross Financial Mismanagement’

In a 95-page ruling, an administrative law judge Friday backed a decision by the Manatee County School Board to terminate a contract with a charter school that he said showed “gross financial mismanagement,” including failing to pay salaries and payroll taxes, getting cut off by food suppliers and facing a shutoff of water service.

Judge Robert Cohen rejected an appeal by Lincoln Memorial Academy, which began operating in the 2018-2019 school year as a charter school after conversion from a Manatee County-run middle school.

“LMA's (Lincoln Memorial Academy’s) financial mismanagement and the danger this mismanagement posed to the students' health, safety, and/or welfare rendered it unable to adequately provide the most basic services for its students, including food and water,” Cohen wrote. “The testimony and evidence presented by the School Board on this issue remains undisputed that LMA could not pay the invoices and debts identified below (in the ruling), as they came due. Further, LMA offered no evidence to rebut the severity of LMA's financial mismanagement and its inability to protect the health, safety and welfare of its students. Given LMA's inability to protect student health, safety, and welfare the School Board had substantial bases to immediately terminate the contract.”

The Manatee County School Board voted to terminate the charter school contract July 23. Charter schools are public schools but are typically run by private organizations that enter into contracts with school boards.

Among other things, Cohen wrote that the school had more than $1.5 million in outstanding financial liabilities as of Aug. 23, including nearly $374,000 owed to the Internal Revenue Service and almost $82,000 owed to the Florida Retirement System. Also, it owed $259,000 in unpaid salaries and $76,000 to Humana for employee health-insurance coverage.

Also, the ruling said the school did not pay $19,531 to teachers who had earned bonuses through the state’s “Best and Brightest” bonus program. In addition, it allowed insurance to lapse for student athletes, Cohen wrote.

“As a school within the school district, LMA was required to offer insurance to its student athletes,” the ruling said. “Maintenance of insurance for student athletes ensures that the student athletes are able to pay any necessary medical bills and, therefore, furthers the health, safety, and welfare of LMA's student athletes. As such, this failure to maintain coverage alone constitutes a danger to student health, safety, and/or welfare.”

In all, the judge wrote that the school received about $4 million in state, federal and local funds. But he wrote that food suppliers U.S. Foods, Inc. and Borden Dairy cut off food-related deliveries in May after not getting paid, which led to the school purchasing food at grocery stores. Also, Cohen said the school received water-shutoff notices in June and July.

But in a document filed this month, an attorney for Lincoln Memorial Academy said students benefited from the school during the 2018-2019 academic year and pinned blame on the Manatee County school district for such things as failing to provide proper monitoring and failing to give notice of potential contract breaches. The school argued that the immediate termination was not justified.

“The doors of Lincoln Memorial Academy opened on August 13th, 2018 and provided an extraordinary education experience for all involved,” the school’s attorney wrote. “Students benefited from an extended school day that infused grade level themes, character and social skills development, as well as leadership education and athletic development.”

But Cohen wrote that the Lincoln Memorial Academy board “failed to act in the interest of the health, safety, and/or welfare of LMA's students by failing to address the gross financial mismanagement of LMA in their capacity as the responsible fiscal agents.”