Silver State Charter School is being shut down at the end of this school year.
The school’s charter was revoked by the State Public Charter School Authority at a Monday hearing after an audit revealed what was described as extensive fiscal mismanagement.
The formal Notice of Closure was issued Oct. 26 and the school given 30 days to cure the deficiencies identified by auditors. According to a letter to the authority board from director Patrick Gavin, the school failed to fix the problems.
“The audit has revealed a pattern of fiscal mismanagement by current and past staff and members of this charter school’s governing body,” the October notice stated.
Specifically, the auditor charged the school violated state law by investing $3,125,000 of public money in a high-risk derivatives contract with Bank of America. Derivatives contracts are not insured by the Federal Deposit Insurance Corporation (FDIC), making such investments a violation of state law.
In addition, auditors reported problems with the school’s financial record keeping.
Gavin said school officials were called before the board last month. He said they asked for and received more time to get their house in order.
School officials pointed out that no money was missing and said they had hired an accountant to clean up their books. They also brought on new board members and paid Bank of America $20,000 to get out of the derivatives contract.
The hearing resumed Monday but Gavin reported: “Based on the materials submitted by the school, the school has not remedied the deficiencies identified in the Notice of Closure.
“Consequently, staff recommends the revocation of the written charter of Silver State Charter School,” his report to the board states.
Board members agreed, voting the school failed to fix the problems raised by auditors and the failure warranted closure.
Silver State also has come under fire from the state Department of Education for a perennially low graduation rate and other problems.
“There are some fine people who have joined that board in recent months,” said Gavin. “But the operational history was so problematic for so long. It’s very hard to turn around an organization in the timeline we needed.”
Calls for comment to Silver State were not returned. Gavin said his staff is meeting with school officials next week to talk about how to go about the closure.
The Board of Examiners in June approved a contract with Deloitte Consulting to audit the school after Gavin told members there were “significant discrepancies” in the school’s financial records.
