PA Department of Education Halts Payments to Agora Cyber Charter School, Citing Fraud and Improper Use Funds

Apr 30, 2009, 16:58 ET from Pennsylvania Department of Education

Court action protects taxpayers while ensuring Agora students are not negatively impacted

HARRISBURG, Pa., April 30 /PRNewswire-USNewswire/ -- Pennsylvania Department of Education Secretary Gerald L. Zahorchak announced today that the Pennsylvania Department of Education has stopped making payments to the Agora Cyber Charter School because of ongoing concerns over misuse of taxpayer funds.

The department filed suit in the Commonwealth Court this week seeking to have an independent trustee or receiver appointed to oversee the operations of the cyber charter school in place of Agora's board of trustees.

"The Department of Education has a responsibility to ensure every child receives a quality education, as well as an obligation to be responsible stewards of the taxpayers' money," Education Secretary Gerald L. Zahorchak said. "The actions we have taken in recent days will ensure we are meeting both those commitments."

The court filing states that if the department continued making payments to Agora, those funds would be used to continue the "ongoing and pervasive unlawful and improper conduct" by Agora and likely would not be recoverable by the Department of Education.

The court filing further states that, until the concerns over Agora's management operations are resolved, payments normally made to Agora will be placed into an escrow account.

Secretary Zahorchak said the actions taken by the department will not impact the daily operations of Agora, which are managed by a separate educational entity, K-12 Pennsylvania, LLC.

"Agora's students will not be impacted by our decision in any detrimental way," the secretary said. "Moving forward, these students will continue to have the same curriculum and day-to-day education experience to which they have become accustomed."

The charter issued to Agora by the Department of Education in June 2005 set several requirements, including establishing a reserve fund, as well as prohibiting the use of an outside educational management organization. Agora officials violated the charter by contracting with the Cynwyd Group, LLC - an entity which, according to the complaint, was "disproportionately rewarded for little or no performance."

The department believes that the Cynwyd Group has been paid millions of dollars under this unlawful management agreement and, if PDE were to continue making payments, the Cynwyd Group would receive millions of additional public dollars for providing little or no services to Agora or its students. Agora's board of trustees also failed to place monies in a reserve fund. Those funds instead went to the Cynwyd Group.

The department's court complaint also alleges Agora's board of trustees violated its bylaws by failing to adopt appropriate policies and procedures. Official minutes of the board's meetings contain no indications that the board reviewed or approved Agora's annual budgets, school handbook, truancy policy, or school calendars.

Agora also violated the school laws by allowing the Cynwyd Group to maintain student records and certain financial documents outside the premises of Agora and violated the state's Sunshine Act by failing to publicize its meetings.

"Any violation of a charter is unacceptable, but the ongoing, flagrant violations by Agora officials warranted decisive action by the department," Secretary Zahorchak said. "We would not be acting in the best interests of students or taxpayers if we continued to fund Agora despite its multiple violations of the law."

Parents of Agora students who have questions about the school's ongoing operations are advised to contact Darren Reed of K12 Inc. at 610-254-8218 ext. 2222 or 703-939-7668.

    CONTACT: Michael Race
    (717) 783-9802

SOURCE Pennsylvania Department of Education