Aristotle Preparatory Academy-CFA takeover raises conflicts of interest questions

CHARLOTTE —Aristotle Preparatory Academy – A Challenge Foundation Academy received a Department of Public Instruction academic growth award last month for academic year 2016-17.  The Department of Public Instruction (DPI) recognized the work of former Aristotle director David Davis and his former teaching staff for raising the school’s grade from “F” to “D”. Davis had worked closely with the DPI and CFA curriculum specialist Cathy Kinter to bring the school into compliance and bring academic growth to the students.

In the Dec. 2016 Aristotle Preparatory Academy board minutes, the report says:

Cathy Kinter reported the she is seeing improvement with the students. She has worked with teachers to inventory their material and get items need for core knowledge. She has participated in in class coaching. She is working with teachers to create a curriculum
plan. She will be working at APA 4 days a week offering more development opportunities.

According to Davis, Aristotle was ~98% African-American with over 90% of its student body eligible for free or reduced price lunches. Many of the children entered the school over 2 grades behind in their education.

Aristotle Data:

  • Student Enrollment: 160
  • Teacher to Student Ratio: 1:20
  • Year Established: 2013

The former director also arranged for the move of the school to a new building.

“The kids were making academic progress, the parents were happy, and the staff’s hard work was appreciated. This is what charter schools should be doing in these demographics, ” said former director David Davis.

Ironically, the DPI award contradicts Challenge Foundation Academy Chief Executive Officer Tony Helton’s assessment of the school management. In May 2017 CFA-CEO Helton attended the Aristotle board meeting and in what Davis called a “fire and brimstone” speech stated that the school’s performance was so poor it would be closed unless Achievement for All Children (AAC) took over its management.

AAC is a new charter management company said to be founded by Tony Helton along with CFA Associate C. Philip Byers, Jr., Rob Bryan, and others. AAC was incorporated on Feb. 6, 2017.

The company is tied to wealthy Libertarian John Bryan who helped pass a state law allowing takeover of low-performing North Carolina schools.

Helton’s fundraiser for Lt. Governor Dan Forest

Achievement For All Children was among the groups who applied for state approval to run struggling schools that will be chosen for the Innovative School District. Achievement. Like Oregon resident John Bryan, who is a generous contributor to political campaigns and school-choice causes in North Carolina, Helton hosted a fundraiser this summer for Lt. Governor Dan Forest who sits on the State Board of Education.

Achievement For All Children was formed in February and registered by Tony Helton, the chief executive officer of TeamCFA, a charter network that Bryan founded. The board of directors for Achievement for All Children includes former Rep. Rob Bryan, a Republican from Mecklenburg County who introduced the bill creating the new district, and Darrell Allison, who heads the pro-school choice group Parents For Educational Freedom in North Carolina.

Rob Bryan, as the legislator who literally constructed the Innovative School District (then ASD) initiative will become the very recipient of a governmental contract he established.

Despite the fact AAC was a new corporation with no track record and the fact that CFA had a signed agreement with Aristotle and was responsible for the school’s performance as well, the board voted the school management to AAC. There is no recorded vote in the May 2017 minutes. Both Jason Cole, CFA board representative, and Michael Schumate’s (husband to Thomas Jefferson Classical Academy (TJCA) former finance director Edith Shumate) board membership, were already favorable to CFA, and that discussion and motion passed easily in a 1-2 punch. Edith Schumate had an unexpected and sudden resignation from TJCA.

Do the CFA Aristotle board members have a conflict of interest with the new Charter Management Organization, Achievement for All Children since Helton is the CEO of CFA and Aristotle has a contract with CFA? The CFA board representatives are paid for their board meetings.

CFA is headed by Oregonian John Bryan. Should an out-of-state organization have a vote on state tax dollars for education?

However the June 13, 2017 Aristotle board minutes reveal that the deal was already made with Achievement for All Children.

June-13-2017-board-meeting-minutes

However, according to policy CHTR-014, an amendment “employing or terminating a management company” requires State Board of Education (SBE) approval which had not been obtained.

Shortly after the Aristotle unapproved management change, Tony Helton of Achievement for All Children asked for the reapplying of all Aristotle’s teachers for next year.  When Davis spoke up on behalf of his teachers was, he reported Helton saying, “We’re going to do what we need to do.”

With the AAC management take over, the school director was no longer hired by the board of directors, but instead would be installed as director under Achievement for All Children management. When Helton told Davis he would have to reapply for his position, Davis declined and was subsequently replaced.

If CEO Helton could not make the school successful with his Challenge Foundation Academy, why would the board feel his new company AAC  would have more success?

That was not the only problem. Conflicts of interest questions should have been made since Aristotle Preparatory Academy already had a signed affiliation with the Challenge Foundation Academy which Helton heads. Helton stood to benefit by his poor assessment of Aristotle (of which the State DPI disagrees) by obtaining a new 3-year contract with Achievement for All Children.

The Aristotle board approved a takeover with only the state Charter School Advisory Board’s recommendation that it be sent for approval by the State Board of Education(SBE). Both Joe Maimone and Tony Helton served on the CSAB. Would that contract be valid without the State Board of Education approval?

In the May 8, 2017 Minutes of the North Carolina Charter School Advisory Board include the recommendation for AAC to assume the Aristotle charter management be made to the State Board of Education. The May 2017 minutes of the state Charter School Advisory Board show:

Dr. Townsend-Smith provided the CSAB with information on Aristotle Preparatory Academy’s amendment request to employ a Charter Management Organization (CMO).

The OCS provided the CSAB an overview of the CMO agreement for Aristotle Preparatory Academy. If approved,this agreement would shift the responsibility of the board handling the day-to-day operation to the CMO. When reviewing fees, Aristotle is interested in entering the CMO agreement withAAC.

The fee to be paid to AAC shall equal to a sum of five percent.

If the school performance  increases by a letter grade, then the fee would increase to ten percent. Additionally, Aristotle has
agreed to a three-year contract with the CMO.

 Mr. Walker made a motion to recommend that Aristotle Preparatory Academy’s amendment request be moved to the SBE for approval. Ms. Parlér seconded the motion.

The motion passed unanimously. Mr. Maimone and Mr. Helton recused.

 

The Charter School Advisory Board approval was only to move Aristotle Prepatory’s amendment request to the State Board of Education (SBOE) for approval. At the SBOE meeting in August, there was lively discussion regarding  AAC’s lack of tract record, structure and management of ACC, and the fact that no other bids were solicited. (See the August 2, 2017 minutes from the Office of Charter Schools presentation.)

In Oct. 2017, Tony Helton resigned from the Charter School Advisory Board.

August 2-1 7 Minutes

Presenter(s): Mr. Dave Machado (Director, Office of Charter Schools) and Dr. Deanna Townsend-Smith
(Assistant Director, Office of Charter Schools)
Description:
In 2013, the State Board of Education granted Aristotle Preparatory Academy a 10-year charter. The K-12
charter (currently K – 5) school located in Mecklenburg County is completing the third year of its charter term.
The Aristotle Preparatory Academy Board has requested that the State Board of Education allow it to enter into
a contract with a charter management company, Achievement for All Children (AAC), to assist with the
operation of the charter school. According to policy CHTR-014, an amendment “employing or terminating a
management company” requires State Board of Education (SBE) approval.
The AAC management company is newly formed and has not established a track record as yet in North
Carolina or elsewhere. A number of questions have arisen concerning the structure and governance of the
management company in addition to its capacity to serve the Aristotle Preparatory Academy Board in the
successful operation of the charter school.
On July 6, 2017, the SBE formed a 3-member committee to discuss and review the agreement between
Aristotle and AAC. The subcommittee met on Monday, July 31, 2017 at noon via conference call. After review
and discussion, the committee recommends approval of Aristotle Preparatory Academy’s request to contract
with AAC.

Discussion/Comments:
• EICS Committee Chair Rebecca Taylor recognized Mr. Dave Machado for this item.
• Ms. Taylor reminded the Board that this item was discussed last month and that Chairman Cobey
appointed a subcommittee of three SBE members to review the request from Aristotle Preparatory
Academy Charter School to partner with a newly created charter management company entitled
Achievement For All Children (AAC.) She noted that the subcommittee met this past Monday, consisting
of Mr. Collins, Ms. White and Ms. Taylor. Ms. Taylor also stated that both the school and the CMA were
permitted to provide additional documentation. Please refer to eboard attachments – subcommittee review.
During the subcommittee’s discussion, agency staff was available to respond to questions and concerns by
the subcommittee.
• Ms. Taylor stated at the end of discussion, the subcommittee voted to recommended Aristotle’s request for
the State Board of Education approval in an effort to balance the needs with the school, with the fact that
we intend to partner with a newly formed CMO.
• She added that the subcommittee further recommends that Aristotle report quarterly to the Office of
Charter Schools with respect to educational and financial matters consistent with the terms of the charter
agreement in a State Board of Education Oversight of Charter Schools, The Office of Charter Schools and
Financial and Business Services shall continue to monitor this school with the AAC as its management
company to verify the school’s progress towards successful achievement of its goals. OCS and Financial
and Business Services will have the discretion to require Aristotle Preparatory Academy to provide
particular documents supporting the school’s goals as needed. She added that it was only necessary that
the OCS report to the SBE if there are some concerns that arise.
• Ms. Taylor noted that this item will be voted on Thursday.
• Mr. Alcorn asked if Aristotle Preparatory Academy put this out to bid, or where there any other people that
were considered. He stated that he was uncomfortable from a business and ethical perspective and wonders
if this was crossing a line from that perspective. He added that unless you can convince me otherwise, he
will vote no. Ms. Taylor called on Mr. Machado to speak to whether it was put out to bid or not. Mr.
Education Building, Raleigh Wednesday, August 2, 2017 Board Room, 10:00 AM
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Machado replied that it was not put out to bid, and stated that there was a relationship with the Challenge
Foundation and since the proposal was made by a member of the Challenge Foundation, the Aristotle board
of directors they discussed and decided that was who they would choose.
Mr. Alcorn followed up and asked if there was any discussion about potential conflict of interest. Mr.
Machado replied yes, there was a lot of discussion. Mr. Machado added that the CSAB discussed that
situation extensively, as did the subcommittee and our legal department.
• Ms. Cornetto stated that the subcommittee of SBE members was created for the sole purpose of removing
the decision from CSAB on which Mr. Helton sits. She added that was why the subcommittee actually
convened Monday to re-review all of the documentation that the CSAB initially looked at. She stated that
we were trying to keep the CSAB away from any contact with this decision. Mr. Davis inquired about the
compensation clause and asked if five percent customary compensation. Ms. Cornetto replied from her
experiences, some companies actually take 95% of the income that comes to the charter school in order to
effectuate the operations. Five percent condition with an increase to ten percent if the academic
achievement was also outlined in the agreements.
• Ms. Taylor noted that this item will be voted on Thursday.

The State Board of Education approval for the AAC takeover of Aristotle management was in August 2017, over 2 months after Helton had already taken over the school and replaced the director. The current Aristotle board has two CFA members. Meanwhile, TeamCFA has opened a new charter school just 6 miles down the road from Aristotle.


We did not receive a response from CFA-CEO Tony Helton to our Request for Comment.