CONCORD, NH — State education officials are navigating through unchartered territory after one of New Hampshire’s charter schools fell out of compliance with financial reporting — with nearly $154,000 in unsupported federal grant reimbursements found, leading to the school surrendering its charter.
Capital City Public Charter School surrendered its charter on Friday to the state board of education to avoid a revocation hearing slated for Tuesday. As part of the hearing, the board accused the school of failing to provide financial reporting for expenses for two years — and discovered what appear to misappropriate funds. Those of those funds include accusations of personal use of federal grant dollars, loan repayments that were not documented, and tens of thousands of dollars of money to the school’s founder, Stephanie Alicea of Boscawen, over and above what she was salaried to receive.
The school, according to the New Hampshire Department of Education, has received around $758,000 in federal and state grants since its founding in 2018 by Alicea, a local educator. She created the school, according to prior press reports, to offer public service learning to middle school students in the capital region. The school was in operation for the 2018-2019 and 2019-2020 school years but closed last summer.
Midway through 2019, the state education department started issuing warnings to the school identifying “concerns relative to the federal grant management compliance” of the federal Expanding Opportunity Through Quality Charter Schools Program grant, $223,000 of the school’s funding. During its operation, the school also applied for a public school infrastructure grant but that request was rejected.
Alicea, the board said, had appeared at meetings at various times and not just concerning financial matters. In August 2019, the board requested a review of the school’s first year including learning objectives, fundraising, accountability information, achievement gaps, and whether IEPs were being provided to students.
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“The board found that the report was incomplete due to the lack of information provided by CCCS and directed the school to provide a supplemental report at a subsequent meeting,” a report stated.
The school came back three months later and offered a report but it was found to be incomplete by the board. At the time, the school told the board an auditor was hired to assist with delinquent financial reports.
The state checked in with the school periodically until receiving a draft financial report for the federal funds in May 2020 and later, informed the school there were still issues with specific “standard financial reporting obligations and the significant potential problems” in the draft report. It was at this time that the department brought the federal government in.
“Based on Capital City’s failure to provide statutorily required financial reporting to the department, even after numerous extensions, and based on other indices of financial irregularities, including information in the then-draft audit report of the federal charter school start-up grant, department staff reported the situation to the U.S. Department of Education’s Office of the Inspector General on May 6, 2020,” the department said in a statement to Patch.
A plan was set up to give the school time to address the financial information. The federal government’s audit also found what state officials were seeing — specifically, $153,837.98 in “excess/unsupported grant reimbursements.”
In September 2020, the state requested repayment from the school of the unsupported grant reimbursements and, as part of an agreement to delay a hearing about the matter, the school put up $25,000 in funds toward the repayment.
A red flag by the state was the school making a request for more money in October 2020 via the Public School Infrastructure Fund, a nearly $29 million fund created in 2017 to assist public schools, including charters, to bring fiber-optic connectivity as well as security upgrades to schools. Capital City Public Charter School applied for money from the fund but when the state requested supporting documentation, there were many issues found, officials said.
“The documents provided to the department by CCCS in response to this request and in follow-up requests did not clearly support the request and had a number of other material deficiencies, including but not limited to the following: some invoices were not related to the work identified in the application, some invoices were marked as overdue, not paid, or in collections, and some invoices did not match requested amounts,” a report stated.
In December 2020, a hearing was held and the school was again requested to pay back the money it had already received.
“As of the present date, CCCS has not repaid the funds pursuant to the order, other than the funds provided pursuant to the escrow arrangement prior to the hearing,” the state said in a report.
On Dec. 22, 2020, an attorney for the school informed the state that it did not have funds to pay the nearly $129,000 in funds.
In a statement, Alicea said she was “not at liberty to share all information” about the case.
“After further consultation and due to the inability to fulfill the DOE’s requests of CCCS, CCCS has, as of Feb 5, 2021, knowingly chosen a surrender the Charter rather than have a revocation hearing,” she said. “We will not reopen.”
Alicea came up with the idea for the school in 2017 after her son began kneeling during the National Anthem at Merrimack Valley High School football games ala Colin Kaepernick, to protest police brutality. He was targeted for the acts by some members of the school community and she petitioned to have SAU 46 pay for him to get a private school education. Later, Alicea sent her son to the Tilton School, a private preparatory school, and became a school choice advocate.
Alicea said there were “amazing service experiences” the students had in the school and community including collecting towels for the comfort dogs of Hero Pups, two visits from Liberty, the Concord Police Department’s comfort dog, ponchos given to both Concord firefighters and Boscawen police at the beginning of the pandemic, and other activities. Successfully rezoning a portion of the Steeplegate Mall, too, into a school zone, collecting Toys for Tots, and the creation of a video of the students singing John Lennon songs were also highlights, she said.
“It has been an honor to have served so many wonderful, grateful and kind families and students as educators and in a safe, out of the box school,” she said.
The education department is still waiting for audit information from the school concerning how it spent nearly $535,000 in New Hampshire adequacy aid.