Gloucester Community Arts Charter School

This is a Massachusetts State Auditor performance audit of the Gloucester Community Arts Charter School covering July 1, 2010 through January 9, 2013, the day the school stopped operating.

“This report details the audit objectives, scope, methodology, findings, and recommendations for the audit period, July 1, 2010 through January 9, 2013 (the date the school ceased operations).”

Auditors looked at whether the school had proper controls over money and management, followed applicable rules, and how the state education department oversaw it.

“Our audit objectives were to (1) determine whether GCACS had instituted adequate internal controls over its financial and management activities and was complying with applicable laws, rules, regulations, and charter provisions and (2) obtain information regarding the oversight of GCACS performed by the state’s Department of Elementary and Secondary Education (DESE).”

The school’s sudden shutdown disrupted students and families and forced nearby public school districts to take students back quickly.

“This adversely affected GCACS’s students and their families and local school districts that had to deal with the unexpected need to relocate these students.”

For an ordinary citizen, this report shows why strong oversight of publicly funded charter schools matters: when a school fails, students, families, local districts, and public money are all affected.

“To minimize the risk of such problems in the future, DESE should ensure that charter schools are financially viable; follow best business practices; adhere to procurement practices expected of government entities as recommended by OIG; and comply with all applicable laws, rules, and regulations, including restrictions on incurring debt beyond the charter period.”

The school had repeated problems with governance, finances, records, procurement, enrollment estimates, staffing costs, and compliance, and those problems were not fixed in time.

“GCACS did not adequately address numerous deficiencies related to procurement, accounting, internal control, recordkeeping, management, education, governance, and compliance with the state’s Open Meeting Law (Chapter 30A, Sections 18 – 25, of the General Laws) that had been identified in external reviews conducted by the Commonwealth’s Office of the Inspector General (OIG), the Attorney General’s Office, a private certified public accounting firm, DESE’s Charter School Office, and a private charter-school management consultant.”

Because the school no longer existed, the auditor recommended preserving records and finishing financial closeout work; the Gloucester Public School District was later named to hold the records.

“The Gloucester Public School District has been designated the trustee responsible for future maintenance of GCACS’s records, and all records have been turned over to the district’s Director of Finance and Operations.”

This was not an isolated concern: the auditor said Massachusetts had seen multiple charter school closures, and the report used this case to warn that stronger oversight is needed to reduce future failures.

“GCACS was just one of 19 Massachusetts charter schools that closed between 1994 and June 2013, many with adverse consequences for students and the Commonwealth.”

“Insolvent” means the school did not have enough financial resources to cover its obligations and keep operating.

“As a result, GCACS was unable to continue operating and the school closed on January 9, 2013, forcing Gloucester and other local public school districts to absorb transferring students on an emergency basis.”