18 April 2019 Update
Aloha Kona Pacific Staff and Families,
Thank you all for your messages and phone calls. We very much appreciate your support and passion during this challenging time for our school.
The school’s response to the Notice of Prospect of Revocation is due on Monday, April 22, and we are working closely with the school’s attorneys to draft a response that will provide the best path forward for our school, so that Kona Pacific can continue to grow, thrive and serve the families of Kona. We will provide you with a copy of the response next week, which will include an indication of the willingness of the GB members to step down to allow for reconstitution.
The school feels it is important to ensure that the accusations in the NOPR were reviewed and refuted not only by the Governing Board and school staff, but also by a group of accounting professionals. Linked to this update is a letter from Carbonaro CPAs and Management Group, the firm of certified public accountants that has conducted an audit of the KPPCS financial records. Carbonaro CPAs is one of the most highly respected CPA firms in the state of Hawaii with an A+ rating from the Better Business Bureau. They conduct the audits of many charter schools in the state of Hawaii as well as other state agencies, nonprofit organizations, private schools, homeowner associations and for-profit businesses.
The letter firmly establishes that several of the financial concerns listed on the Hawaii State Public Charter School Commission’s Notice of the Prospect of Revocation (NOPR) are clearly erroneous and unsubstantiated.
Please review the letter here for the details.
Thank you for your patience as we continue to work with the commission staff and the school’s attorneys to address the various concerns of the commission and, hopefully, achieve a rescinding of the NOPR.
Wishing you all a peaceful and joyful holiday weekend,
12 April 2019 Update
Aloha KPPCS Staff and Families,
Mahalo for your continued patience as the school works towards the best options for ensuring Kona Pacific Public Charter School will be able to remain open and serve the students and their families.
There has been a lot of misinformation circulating in our small community that is causing a lot of confusion and damage – this type of misinformation is harmful to the school, including adults and children.
Emails have circulated stating that Hawaii State Charter School Commission (Commission) staff have confirmed that if all governing board members resign, the commissioners will take revocation of the school’s charter contact off the table. However, the school’s attorneys have advised that Commission staff may not speak on behalf of the commissioners with regard to matters they have yet to vote upon. Specifically, while Commission staff have referenced HRS Section 302D-17(2)(B), “except that the authorizer may replace the entire governing board if the alternative is the initiation of revocation of the charter school’s charter contract and the governing board opts instead for reconstitution,” it is the commissioners themselves who will be the ones making the decision whether to accept or reject this option. In short, there is no guarantee that if the entire board resigns the NOPR will be rescinded.
The board is continuing to work closely with the school’s attorneys, and is consulting with the Commission staff, in order to achieve the best possible outcome for KPPCS.
Secondly, we would like to provide some extremely important corrections and clarifications. There have been a number of emails and other communications regarding KPPCS’s ESSA report and some of the data contained in that report. The ESSA (Every Student Succeeds Act) report is a document compiled by the Hawaii Department of Education (DOE) that provides comprehensive data on school and student performance and accountability.
The board has identified at least two areas in which the data on KPPCS’s 2017-18 ESSA report is fundamentally incorrect and has injured the reputation of our school, our teachers, our staff, and the members of the Governing Board. The first is the PPE (per-pupil expenditures), which was reported as being $2,684, far below the PPE for any other school in Hawaii.
This incorrect figure was quoted in widely distributed emails, along with unfounded and defamatory accusations of financial improprieties by board and staff members.
When we promptly investigated this situation, we found that the reason for the low PPE figure in the ESSA was that the school’s administration submitted incorrect data, only reporting the fourth quarter of the year, rather than for the entire year as required. At the direction of the governing board, the school’s administration is now in the process of correcting that figure; the Director reports that the tentative corrected PPE figure is $7,354.
The other incorrect ESSA data point was regarding teacher qualifications, in which KPPCS was identified as having 92% inexperienced teachers, an obviously incorrect figure, as our excellent faculty has many years of experience.
We found that the school administration did not provide this information to the DOE when requested, which resulted in the erroneous figure. The board has also asked the Director to ensure that this figure is corrected, and is continuing to investigate whether there is additional incorrect information that has been provided to the Commission and the DOE.
The board is continuing to move forward with the important task of making plans for the next year. It is very important that while dealing with the tasks at hand, we also look to prepare for the future and ensuring a seamless and smooth transition to the 2019-20 school year. There is currently a hiring committee diligently working towards finding leadership for the next school year.
Thank you for your patience and your support. We will do our best to answer questions and get back to you in a timely manner, but you may not receive immediate responses, as our focus is ensuring KPPCS is here for staff and children, not only next year but for many years to come.
2 April 2019 Update
Aloha KPPCS Community,
We understand that there are many questions. The school is working under the advice of our Attorneys General every step of the way. The governing board has elected to begin the process of self-reconstitution, and the new members can be selected with the assistance of the charter school commission staff to ensure that both the commission and the community have full faith in the governance of the school.
The board has been advised that it is very important to exonerate the school from false allegations of wrongdoing that threaten to undermine the school’s future. While past staff and board members may not have always used best practices, it is essential that we thoroughly address and extinguish the allegations of illegal, unethical and contractual violations that are implied in the NOPR. If we fail to address these allegations, they will continue to cast a shadow on KPPCS.
We are compiling the documentation and evidence to refute the numerous erroneous claims against the school that were made in the commission’s NOPR. For example:
- There is no comingling of funds between the school and the nonprofit (Friends). Intercompany transactions that are properly accounted for, based on sound business purposes and properly reported and approved, are not comingled. There are two separate companies, bank accounts and financial statements. Clearly separated is not the same as comingled.
- There is no overpayment of lease rent. Lease rent recorded and expensed every year and noted in every audit is exactly what the lease terms require. When the lease rent is paid before the due date, and that due date is the start of a new fiscal year, the rent is credited to that new fiscal year. For example, if the rent for July 1 (the start of the new fiscal year) is paid in June, the payment posts in the year in which it was paid, but is credited to the fiscal year for which the rent was due. This is absolutely normal and acceptable accounting practice and does not constitute “overpayment.”
- Occasionally rent was paid early; these early rent payments were made to ensure the supporting non-profit could move forward with construction of buildings and programs the school requested. Prepaid rent is normal business practice.
- The school has often made business transactions with Friends, identified in our annual audits as a related party. These decisions have provided to be very beneficial for the school and the students. All such transactions are documented and audited every year with total transparency.
Because the NOPR contains numerous unjustified accusations and unsupported issues, we will continue working diligently to establish the facts, while also continuing to correct practices that the charter school commission would like to see changed.
We will continue to update the community as the situation progresses.
26 March 2019 Update
Aloha Kona Pacific Staff and Families,
In order to continue to keep the school moving toward correction and compliance with the Hawaii Public Charter School Commission, and having consulted with commission CEO Sione Thompson, the governing board has elected to immediately begin self-reconstitution. The current members wish to honor their commitment to the children and acknowledge that our number one priority is to ensure they can continue to receive the unique gift of a Waldorf inspired education. The school will accept applications for new members, ensuring that the new board members will constitute the majority. The current board is open to and welcomes the charter school commission’s assistance in selecting new members.
As current members leave the governing board, the new board members will appoint the replacement members. This process will be completed in phases, in order to ensure the continuity of the wide range of board responsibilities. During the transition, the new members will begin the work of getting up to speed on the charter contract as well as the school’s organizational documents, and the many rules and procedures the governing board must follow. The new majority will also drive the selection of the school’s new leader(s), the budget for 2019-20, and all forward-looking decisions for the next school year.
During the transition period, the current members will work with the new members to continue addressing the compliance issues, and “cleaning-up” anything the commission finds unsatisfactory, including a severing of the MOA with the school’s associated non-profit, Friends of Kona Pacific.
The board plans to have this process completed by June 30, 2019. By that date, all of the commission’s issues regarding the school’s relationship with Friends of KPPCS will be corrected and/or addressed with new policies to prevent future issues, and the school will have totally reconstituted the governing board in an orderly fashion allowing for continuity of responsibilities in a very conscientious process.
All Governing Board positions are unpaid, volunteer positions. Although unpaid there can be high-level satisfaction knowing you are serving a greater good, and doing a job that needs to be done for a community you care about. If you are interested in joining the governing board and assisting in the reconstitution process, please submit your resumé and a short statement about the skills, knowledge and experience your service will bring to the school. The board is working on scheduling an open town hall meeting. In the meantime, we ask the community to please find common ground in what is best for the children and use this time to set a positive example and support the school through the process.
The Governing Board of KPPCS