State auditor finds numerous issues at now-closed rural charter school

State Auditor Beth Wood

RALEIGH — A recent report by the N.C. State Auditor calls into question financial mismanagement and cites falsification of enrollment records at Bridges Academy, a charter school in Wilkes County. 

The report from Auditor Beth Wood’s office says their investigation into Bridges Academy after receiving six allegations through its tip hotline. 

Key findings of the audit include Bridges Academy falsifying student enrollment records to obtain $404,971 in state funding for which it was not entitled and misuse of $78,576 of charter school funding to support a preschool.  

“The charter school funding provided by DPI was intended for the education of kindergarten through eighth grade students,” according to the audit report. “However, at least $78,576 of the funding was used for the operation of the preschool to close the gap between the revenues and expenses.” 

The school also failed to prepare and submit required tax forms in 2019 and 2020 resulting in underreported compensation of $489,534. 

The audit suggests that the N.C. Department of Public Instruction (DPI) should seek to recover the funds and suggest that DPI should review the enrollment history of Bridges Academy to see if the school received any funding previous years related to falsified student enrollment. 

DPI’s enrollment guidelines say that any inaccurate student data reporting is considered to be falsifying of student information. Anyone falsifying student information shall be guilty of a Class 1 misdemeanor, according to state law. 

Wood’s report also suggested that “Bridges Academy, or the Receiver, should seek the assistance of a Certified Public Accountant to prepare and file the required 1099 tax forms for contractors (director, instructional, and support staff).” 

State Auditor Beth Wood is turning her office’s findings over to the Internal Revenue Service, the North Carolina Department of Revenue, and the local district attorney’s office.  

The school has also been the subject of a State Bureau of Investigations (SBI) inquiry. According to a spokeswoman for the SBI, an investigation into the schools’ fraudulent attempt to access state funding began back in March of 2021. 

According to the audit, during the 2020-21 school year, Bridges Academy’s operations director and finance officer “colluded to submit inflated student enrollment records” by adding 72 students to their headcount when they were not actually enrolled.  

Additionally, both officers for the school admitted this was not the first time they inflated enrollment numbers. The pair had apparently been doing so for the past eight years, with the operations director stating it began “… somewhere around 2013 or 2014.” The two officers had used grades K-2 for cover because there are no required state tests in those grades which could have exposed the discrepancies.  

The two officers also blocked access to the school reporting system which would have exposed the enrollment issues. 

“According to the Finance Officer, in late 2020, a newly-hired principal requested access to PowerSchool. The Director and Finance Officer denied this request,” the audit states. “The principal continuously expressed concerns to the Director and Finance Officer over the limited access to PowerSchool. Despite the Principal’s requests and concerns, access to PowerSchool remained limited to only the Finance Officer.” 

The audit also notes that the finance officer said “[the Director] didn’t want her [the principal] to have access and I’ll be honest, I didn’t want her to have access to it [PowerSchool] until it was cleaned up.” 

The Bridges Educational Foundation, Inc., had also opened a preschool in 2020. 

Bridges Academy, one of the state’s oldest charter schools dating back to 1997, agreed to close its doors on June 30, 2021. The school announced on June 4, 2021, that it would surrender its charter to state officials. The Charter Schools Advisory Board accepted that surrender on June 7, 2021. 

In the June 4 letter, the board of the school cited irregularities found by an outside consulting team’s review. 

“In April, the Board engaged an outside consulting team on an interim basis to assist the Board in enhancing and rebuilding our leadership team,” the Bridges Academy Board wrote. “This decision was made after leadership and administrative changes within Bridges Academy. During the consultant’s initial review process, irregularities within the school’s operations were discovered. Soon after this discovery, the State Auditor separately initiated an investigative audit of the school.” 

About A.P. Dillon 1134 Articles
A.P. Dillon is a North State Journal reporter located near Raleigh, North Carolina. Find her on Twitter: @APDillon_