Audit: North Carolina charter school falsified records to get $400,000 in state funding

RALEIGH, NC (WNCN) — A report from the North Carolina State Auditor’s Office found that a state charter school falsified student enrollment records and embezzled thousands of dollars.

The State Auditor’s Office said it received six allegations through its Bridges Academy hotline. The allegations ranged from concerns about tax reporting to his use of state funds and registration reporting. In the early stages of their investigation, the school’s board of trustees made the decision to permanently close the charter school and preschool.

“On June 30, 2021, Bridges Academy relinquished its charter in response to ‘financial irregularities’ and what the Board determined to be insurmountable financial challenges,” the auditor’s report states.

Bridges Academy was founded in 1996. It expanded by opening a preschool in 2020. Located on State Road, the school averaged 166 students per year. The school has accepted students from Surry, Wilkes, Yadkin Alleghany counties, as well as Elkin City.

Results

The state audit report found that the school:

  • Falsifying student enrollment records to obtain $404,971 in state funding to which he was not entitled. The report revealed that the school had inflated enrollment by around 40%, or 72 students.
  • Bridges Academy misappropriated $78,576 of charter school funding to improperly support a preschool. The report found that charter school funds were not tracked separately from preschool.
  • Bridges Academy failed to prepare and submit required 1,099 tax forms in 2019 and 2020, resulting in underreported compensation of $489,534.

Recommendations

Along with these findings, the Office of the State Auditor made the following recommendations:

  • DPI should seek reimbursement of $404,971 from Bridges Academy, or the escrow, for state funds received as a result of falsified student enrollment records.
  • The CIO should consider reviewing Bridges Academy’s enrollment history and determine if the school has received falsified student funding in previous years.
  • The DPI is expected to seek reimbursement of $78,576 from Bridges Academy, or the receiver, for public charter school funds that were used to support the preschool.
  • 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, instructor, and support staff).