What happens to a Michigan charter school when it cannot resolve a cavernous budget gap within five years?If the school in question is the Bay City Academy, it gets a do-over. The financially hobbled charter school, founded by convicted tax cheat Steven Ingersoll, recently posted an enhanced deficit elimination plan on its “Transparency Reporting” page.
As you can see in the comparison chart below, taken from two approved plans, actual revenue fell woefully short of the Bay City Academy's rosy projections.
In addition, the actual deficit for the most recent period, the 2016-17 school year, grew by nearly $50,000.
The projected deficit for 2018-19 year, pegged by the Bay City Academy at $870,331 in its November 2016 plan, has now ballooned to $1,209,951.
And the bullshit doesn't stop there.
The Bay City Academy's earlier deficit elimination plan was based on the following student population growth targets:
2016/17: 427
2017/18: 450
2018/19: 480
2019/20: 506
This year's iteration reveals the following student population targets:
2016/17:
2017/18:
2018/19:
2019/20:
However, the enrollment crash did not stop Brian Lynch from stuffing his pockets with taxpayer case, paying himself nearly $90,000 a year (in salary and benefits) to act as the school's superintendent, while pulling in another $278,371 paid to his Mitten Educational Management. Lynch and his business partner, accountant Michael Randel, run Mitten.
According to official Michigan Student Data System reporting for the Fall 2017 General Collection (student count), the Bay City Academy registered a population of 322 students. That total includes Bay City's Farragut campus and Mancelona's North Central Academy.
Enrollment at the Bay City Academy peaked at 523 students in the fall of 2012, when its founder Steven Ingersoll first opened its doors.
The only doors Ingersoll now hears are made of metal bars.
Let’s take a look back on how this rat f**k began, and where it should end.
According to the Bay City Academy's 2014/2015 financial report, the charter school incurred a significant operating deficit in 2015, resulting in a cash flow shortage.
As of June 30, 2015, the Academy's current liabilities exceeded its current assets by $1,374,477, pretty steep for an operation with $3,980,670 in total revenues.
In addition to calling out Steven Ingersoll's longtime pattern of paying his Smart Schools Management expenditures without providing a whiff of documentation, the report placed blame for much of the financial fiasco squarely at the feet of the school's board of directors.
Under Michigan state law, the board has the ultimate oversight responsibility for the school district's operations.
Stating that the finding was a result of observation and inquiry with the Academy's administration, the auditors determined the deficit was result of an over-reliance on Smart Schools Management for financial oversight.
As a result, there was “a lack of appropriate administrative oversight by the Board of Directors over the Academy's finances during the year. The effect of this condition resulted in actual expenditures exceeding budgeted amounts, and a year-end deficit fund balance.”
Taxpayers — you know what?
Never mind.
Do what you gotta do, because you’re never going to stop being mad about this…and rightly so.