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Magnolia charter troubles having an impact beyond LA Unified

Jamie Alter Lynton | July 18, 2014

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Magnolia-Charter-schools-2New troubles for the non-profit charter school network, Magnolia Public Schools (MPS), are beginning to raise concerns beyond LA Unified, where the sudden closure of two schools for fiscal mismanagement expanded yesterday into what could be a larger investigation.

In a letter outlining a recent fiscal audit that led to the closure of the two LA Unified schools, Magnolia Science Academy-6 and Magnolia Science Academy-7, district officials detailed a number of irregularities and called the parent organization itself “insolvent.”

At least one other county has noticed.

“We will pay attention to this – we wouldn’t want to find out that our school would have to close because other schools are in trouble,” said Don Bolce, director of special projects at the Santa Clara County Office of Education, which renewed a charter petition last year for a Magnolia school located on the outskirts of Cupertino after reviewing concerns about the school’s finances.

“We recognize that with a charter school that is part of a charter management organization, a problem at one school could impact other schools – if there is a problem, it endangers the system,” he told LA School Report.

Messages seeking comment from Mehmet Argin, the MPS chief executive, were not immediately returned.

MPS currently operates 11 schools across California: eight in LAUSD, plus three others, including one in Santa Ana that has been of concern to school and county officials in Orange County despite winning approval for $18 million in facilities bond money.

Magnolia has also closed — and attempted to open — numerous other schools in various districts in recent years. (See list below).

For MPS, the problems in LA Unified are just the latest in a series of issues that have plagued the nonprofit in recent years. It has faced numerous audits of its schools as well as accusations of an association with a Turkish group called the Gulen movement, an Islamist-based group involved in education in countries around the world that has been accused of creating a cult-like environment in its schools.

An examination by LA School Report of public documents reveals a history of concern by officials around California who have repeatedly flagged financial issues.  Here is a rundown of some of the activity that MPS taken in recent years:

District Charter – San Diego Unified School District 

  • SD Magnolia Science Academy 2
    Closed 2010: MPS had won a charter petition to open the school in 2009, but after a year’s delay, it opened with only eight students enrolled. It was closed by the district mid-semester in 2010.
  • Magnolia Next Generation Charter
    Denied 2014: MPS submitted a charter petition numerous times to the school district to open Next Generation. In denying the charter this year, the district said the organization was “demonstrably unlikely to successfully implement the program set forth in the petition because the petitioners have presented an unrealistic operational plan for the proposed charter with respect to facilities and enrollment.”
  • Magnolia Science Academy – San Diego open since 2005
    Renewal petition slated for 2015: The district sent warnings to MPS in both 2011 and 2012 after finding it had a negative ending fund balance and an inadequate reserve.

Countywide Charter – Santa Clara County Board of Education

  • Magnolia Science Academy — Santa Clara
    Renewal approved 2013: Reservations stemming from its financial footing were flagged in a staff report that cited concerns with the school’s “negative fund balances, negative cash flow, poor fiscal accounting procedures, and internal control weaknesses.” Since then, according to Bolce, the county monitored its progress, and the school made the necessary adjustments. “Our biggest concerns were that we saw some operational concerns, the thing that was driving it for us – we had concerns about the school’s solvency…that was because the state was deferring payment.”

Statewide Benefit Charter

  • Pacific Technology School-Orangevale  (Near Sacramento)
    Closed 2013: This school strugged with enrollment and financial issues, and was flagged by the state as being in “Poor Financial Condition.” According to a memo issued by Secretary of Education, Tom Torlakson last year, the school had  a “negative fund balance trend is an indicator that demonstrates poor fiscal management practices and if unabated may result in financial insolvency or (California Dept. of Education/State Board of Education) action.” The school was closed in June 2013.
  • Santa Ana Pacific Charter/Magnolia Santa Ana (190 students 6-12)
    Renewed April 2014: Operating for five years as a “statewide benefit charter,” authorized by the California Department of Education, this school was forced to seek a new authorizer when its sister school in Orangevale closed. (The state requires an operator to have two schools under a statewide benefit charter). Last year, the state put it on a list of schools in “Poor Financial Condition,” and when the operator sought authorization from the Santa Ana Unified School District, the district denied the petition, citing fiscal concerns. The appeal was denied by the Orange County Department of Education in February of this year. On appeal, the Advisory Commission on Charter Schools State Board of Education voted in favor of awarding a the charter despite a staff report citing financial concerns.The school is on track to receive $18 million dollars in bond money for a new facility.

Previous Posts: JUST IN: LAUSD expands probe into Magnolia charter schools‘Fiscal mismanagement’ cited in closing 2 Magnolia chartersTwo LAUSD charter schools face closure after fiscal audit

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