A Coconut Grove charter school’s tangled relationship with its founder and landlord has created “structural conflicts of interests” that could threaten the school’s nonprofit status, according to a critical audit by the Miami-Dade School District.
Auditors examining the cash-strapped Academy of Arts & Minds criticized the charter school for a series of no-bid contracts with companies tied to the school’s founder, attorney Manuel Alonso-Poch, according to a draft report obtained by The Miami Herald. Alonso-Poch is the “controlling force” at the school, auditors found, acting as the school’s landlord, financial manager, food provider, spokesman and occasional legal advisor.
Alonso-Poch’s real-estate company, which owns the school property and leases the building to the school, also wrongly received a school-related tax exemption on a portion of a parking lot that was not used by the school, the audit found. The Miami-Dade Property Appraiser is now demanding more than $182,000 in back taxes on the parking lot, records show.
Auditors also chided the school’s volunteer governing board as “subservient,” and said the board failed to adequately oversee the contracts between the school and Alonso-Poch’s companies. The board’s chairwoman, Ruth “Chuny” Montaner, is Alonso-Poch’s cousin, and board member Cecilia Holloman has worked with Alonso-Poch in the past.
Alonso-Poch, Montaner and Holloman could not be reached for comment Wednesday.
One person long listed as a member of the school’s board is Jorge Guerra-Castro, who lives in Peru. When contacted by The Herald last year, Guerra-Castro said he had no formal relationship with the school and didn’t know why he was listed on the board.
Also on the school’s board are Percy Aguila and Ignacio Ortiz-Petit, both of Miami.
While the audit recommends a series of reforms for the charter school — including rewriting the no-bid contracts — the school district cannot force Arts & Minds to take any action to fix the problems, said Helen Blanch, the school district’s assistant superintendent for school choice. Though Arts & Minds receives more than $3 million a year in public funds, the charter school is independently managed with little oversight from the school district.
“At the end of the day, they haven’t done anything illegal,” Blanch said. “School districts should have the authority to oversee things like business practices and governance structure.”
However, auditors warned that the school’s relationship with Alonso-Poch could run afoul of Internal Revenue Service rules prohibiting nonprofits from operating “for the benefit of private interests.” A charter-school operator must be a recognized nonprofit under Florida law.
Alonso-Poch started Arts & Minds in 2003 in a Coconut Grove building owned by one of his companies; the school pays almost $900,000 a year in rent. Experts hired by the school district described the lease as “irregular,” noting that the precise space for the school is undefined, and other tenants also leased space in the building, records show.
With his son, Alonso-Poch also runs a food-service company that receives more than $140,000 a year to provide lunches for school students, records show. But the company also appeared to run a restaurant on the property during non-school hours, the auditors found, and it maintained a license to sell beer and wine.
Last year, Alonso-Poch also created a management company to run the school for about $90,000 a year. This contract was never opened up to competitive bidding, auditors said — though a governing board member told parents at a meeting last fall that there was a bidding procedure.
Alonso-Poch’s son also manages insurance and benefits for the school’s employees, the audit found.
Though Arts & Minds has achieved academic success — the school received an A-rating from the state last year — it has also been mired in financial problems. Auditors said the school would have faced potential closure in each of the four past years were it not for $1.9 million the school received from Alonso-Poch in donations or forgiven rent.
The school district also temporarily withheld funds from Arts & Minds last year after finding that the school was not providing required services for special-needs students. And district officials also accused the school of charging illegal fees to students to attend many classes.
The audit was sparked by complaints from a group of parents who feared the school’s board was ignoring financial problems and surrendering too much control to Alonso-Poch, who is not a member of the school’s board. The parents also complained that the school did not have enough textbooks for the students, and the school did not have enough teachers for several weeks last year.
Though some of the complaining parents were pleased that the audit confirmed their worries, some said they were frustrated that the school district can’t take stronger action to change the climate at the school.
“So long as the board is allowed to stay, it will be business as usual at that school,” said Carlos Hernandez, whose daughter attended Arts & Minds before transferring last year. “The ones who will end up paying the price are the children and parents.”