State News

NC sues 14 months after audit finds school money mismanaged

Posted April 26, 2016

— North Carolina's attorney general is suing more than a year after state auditors said charter school officials mismanaged taxpayer money before shutting down suddenly.

Attorney General Roy Cooper's office filed a lawsuit Tuesday seeking triple damages and penalties against the closed Kinston Charter Academy and the individual assets of the school's former CEO and board chairwoman.

State auditors reported 14 months ago that questionable financial choices included school officials employing unqualified relatives and borrowing $230,000 at interest rates of up to 515 percent. Auditors found school officials collected more than $11,000 for unused vacation time and unspecified reimbursements when unpaid teacher salaries and other obligations topped $370,000. The school closed in 2013.

Cooper spokeswoman Noelle Talley says the complex case took time to assemble following a separate investigation by the Consumer Protection Division of the Attorney General's Office.

"This case is the first of its kind in North Carolina and could set a precedent for future cases," Talley said in an email. "It also makes it clear that current state law doesn’t adequately provide how North Carolina can fully recover taxpayer dollars from charter schools that fail or become insolvent."

The Attorney General's Office "has heard concerns about charter schools," but she declined to comment about any current investigations. She encouraged people to file a consumer complaint with the office if they believe a school is deceiving potential students, which is among the allegations made against Kinston Charter Academy.


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