Fledgling Doral College got a $400,000 windfall two years ago that helped the small start-up open its doors. The “grant” came from Doral Academy Charter High, a publicly funded school run by the same company.
The deal helped Doral College stay in the black and furthered a joint effort with the charter school to establish an in-house dual-enrollment program. But the transaction also caught the eye of Miami-Dade school district auditors, who have spent the last year questioning why and how a school funded by the state could hand hundreds of thousands of public dollars to an unaccredited, private college.
“The authority and legality of said expense is also not clear to us,” investigators wrote in an audit presented Tuesday.
Auditors say both the grant and a problematic lease they scrutinized are evidence of a larger issue created when the independent governing boards tasked with overseeing charters share close ties with the companies paid to run the public schools, often for a profit. In the Doral case, several board members of the school and college serve in various other capacities for charter school giant Academica, which manages both schools.
Academica president Fernando Zulueta declined to comment Tuesday when approached by a reporter.
But in a biting response to the audit, an attorney representing the school said the grant was a legitimate transaction between partners in education, which existed under the same company when the charter school first set aside the $400,000 for the college. The district’s critical audit, attorney Eleni Pantaridis argued, omitted crucial facts and was the flawed work of a biased investigator who “does not support the charter school system.”
“They’re picking and choosing the facts that benefit them and ignoring the facts that don’t,” she said Tuesday during a hearing.
Auditors, under the supervision of investigator Jon Goodman, began scrutinizing the deals about a year ago after a review of Doral Academy Charter High’s financial statements uncovered the grant and a lease agreement that auditors also investigated.
They said the lease allowed the school’s landlord to terminate the contract early and leave the school on the hook for $4.5 million in improvements to its facility, which is owned by Academica stockholders.
In the case of the grant, auditors were unsure of its legality — though they have shown no proof that it is illegal — and pointed out that Doral College is unaccredited and unable to provide dual-enrollment courses under Florida law. They also said the transaction, which essentially forgave a previous $400,000 loan, was approved by the chairs of the college and high school without going before the full Doral Academy Charter High board during a public meeting, as required.
Investigators also put together a flow chart, showing what they said was the intertwined relationships among the high school, Doral College and Academica, which manages 54 Miami-Dade charter schools and brought in $9.5 million in management fees during the 2011-12 school year.
The chart shows that some high school board members work as principals for other Academica-run schools and serve on the boards of other Academica-affiliated institutions. For instance, Luis Fusté, chairman of Doral College, is also the vice chairman of Doral Academy.
But Fusté said in a statement that his dual roles were easily explained: “The college program was originally under the same umbrella as Doral Academy High School and was created to provide seamless college access to its high school students.”
Investigators also included the Doral College president, state Sen. Anitere Flores, on their chart.
Flores, a Miami lawmaker, said she hadn’t yet read the audit and couldn’t comment on the $400,000 grant, though she noted Doral College is not the entity being audited.
Pantaridis, the school’s attorney, said in her response that “the composition of Doral’s board is completely consistent with all state and district requirements and in no way violate any Florida statutes or the charter school contract between Miami-Dade County Public Schools and Doral Inc. None of Doral’s board members have any financial interest in Academica, the landlord or any other entity that does business with Doral.”
She also said the landlord of Doral Academy Charter High has waived its early termination clause in its lease, and the scrutinized grant had been previously approved by the high school’s board as a loan in annual budgets — issues criticized by auditors as “after-the-fact” actions.
She also said auditors failed to note that the college had already paid back $200,000 to the high school.
“Auditors appear to have simply targeted the two transactions as part of a fishing expedition,” she said.
On Tuesday, Pantaridis successfully argued that the district’s audit committee should delay a hearing on the issue before sending the audit to Miami-Dade School Board members, some of whom attended the hearing. She said auditors gave her only two business days to review their final audit before Tuesday’s hearing.
Chief Auditor Jose Montes de Oca, however, said he has no political motivation and more meetings won’t produce a softer audit.
“The findings won’t change,” he said.