BEYOND THE BOOKS: A $5 million question at American Preparatory Academy

American Preparatory Academy is Utah’s largest charter school provider with four campuses and an estimated 2018-2019 enrollment of 5,048 students. (Photo: KUTV)

(KUTV) — American Preparatory Academy is Utah’s largest charter school provider with four campuses and an estimated 2018-2019 enrollment of 5,048 students.

Because it’s the largest, reporters with KUTV2’s Beyond the Books decided to dig into the school’s finances using Utah’s government transparency app, Transparent.Utah.Gov, which posts information the revenue and spending of public agencies.

What we found there was a breakdown of the school’s 2017 budget of $32.8 million dollars.

One particularly large line item jumped out: a $4.6 million expenditure to American Preparatory Schools, Inc.

We decided to follow that money.

What we learned is that the registered agent of the for-profit, private American Preparatory Schools (APS) corporation, Carolyn Sharette, is also a founder of the charter schools and is the executive director of its executive board.

Also on the board is her sister, Laura Campbell. Sharette and Campbell founded American Preparatory Academy in 2001 with their brother, Howard Headlee, a former head of the State Charter School Board and current president and CEO of the Utah Bankers Association.

Sharette turned down our requests for interviews and wouldn’t talk with us when we showed up for the charter school’s October board meeting.

We tried to get our questions answered other ways.

On October 9, Beyond the Books reporters requested a line-item breakdown of how the $4.6 million is spent by the private corporation, APS.

That same day, we got a call from Phil Collins, who is listed as the chief financial officer of the charter schools’ executive board.

He said that he could share the contract between the charter schools and APS, as well as the Request for Proposal (RFP) put out by the school for management services. But he couldn’t provide an item-by-item accounting for the services the company provides.

We weren’t able to see the names of any employees of APS or any salary information. Those are requirements a traditional school district has to disclose – and does disclose – on the same government transparency website and in response to public records requests.

On the most recent public tax documents filed by the charter schools, which are registered as non-profits, Sharette and Collins each report working a 40-hour week. But neither of them reported any compensation from the schools, according to the documents.

Collins is also listed as a director of Charter Properties II, one of three non-profit corporations started by Sharette’s brother, Headlee.

These three nonprofits own the schools’ property and buildings and lease them back to the schools for about half a million dollars a year, records show.

Headlee and Sharette say that their schools make the same annual reports required of other public schools in the state of Utah, including an annual financial audit report, and are accountable to the State Charter School Board.

But over the years, some lawmakers have been troubled by the ways in which private charter school management companies function like public entities, without having to disclose how they spend public funds.

Sen. Lyle Hillyard, chair of the legislature’s Public Education Appropriations Subcommittee, introduced a bill in 2016 that would hold companies like Sharette’s more accountable. He said:

When you’re dealing with a public entity, you owe an obligation to them and to the taxpayers so that they know how the money’s being spent.

But the bill was watered down after vocal opposition by charter school lobbyists and other proponents. The version that finally wound up on the governor’s desk made no real difference in transparency at all, Hillyard said.

Hillyard told KUT2’s Beyond the Books that the fight over his proposed bill was such a headache, he’d probably never introduce one like it again.

APS eventually sent a public relations representative, Dave Owens, to answer more of our questions.

Those questions and answers are included in the attached PDF you can view in its entirety by clicking below.

Editor's note: A TV promotion for this story Wednesday night used the word "owner" when referring to the private school. KUTV wants to clarify, there is no owner of the school.



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