Debt, drop in enrollment bring Hearns Charter School to end
LITTLEROCK — State, district and charter school officials continue to sort through financial records of the defunct Henry Hearns Charter School of Academic Excellence, some of which show how precarious the school’s budget situation was at the end.
The school, which opened in 2000 with fanfare and high aims, ushered in the Antelope Valley’s first major encounter with the charter school movement. Charter schools operate independently from traditional school districts, though under their auspices, and obtain state funding for their operations.
The Hearns school, which operated under the auspices of the Antelope Valley Union High School District, came with the name and reputation of its founder attached, along with his aspirations. Hearns is known throughout the Valley as the leader of one of the region’s largest congregations, Littlerock Missionary Baptist Church. He has served as Lancaster’s vice mayor since 1992 after serving a year’s rotation as mayor in 1991.
The Hearns school opened in 2000, planning on an attendance of more than 200 students from families that needed academic opportunity — and hope.
Students and parents would sign contracts with the school, and more than education would be served in the curriculum.
At the time, Hearns said students also would learn to “be respectful to their elders, leaders and teachers by greeting their elders with ‘Yes, sir; no, sir; yes, ma’am; no ma’am.’ ”
Ultimately, there never were enough students to take those lessons to head or heart. Record-keeping — a state requirement — suffered from the start.
Plenty of loose ends remain.
According to records from the state Department of Education, the Hearns Charter would have owed the state $146,982 in the 2005-06 school year.
Since that amount exceeds what it would have received in state aid, based on the 33 students enrolled in March, no money would have reached the school’s accounts until the books balanced.
The overpayment stems from a precipitous drop in enrollment, about 50% from year to year, and from a lingering claim against the school for $134,065 by the state.
The school could not verify attendance records for 45 students in its first year of operation, and the state said money allocated for those students must be paid back. That charge, which remained through the charter’s final days, accounts for part of the debt to the state.
Hearns, known for his powerful oratory from the pulpit, did all he could to try to save the foundering charter.
At a July 13 high school district board meeting, Hearns said he had $54,000 from a fund-raiser in February and subsequent private donations.
The startling announcement raised fresh questions about the school’s funding support.
While the Hearns charter has an account with the Los Angeles County Office of Education, which acts as a bank for schools, the $54,000 was maintained in a separate account. Hearns told the board he didn’t mean to mislead anyone by putting the money aside.
“To be honest, I really did not want the state to have their hands wrapped around all the money we’ve got until your board gave an indication what you’d decide,” Hearns told the trustees.
Now, two weeks after trustees ordered the school closed, no one knows exactly what will become of that $54,000, or any other funds Hearns may have set aside.
“They’re on record as having identified the $54,000,” said Ken Scott, chief financial officer on assignment for the high school district.
“It’s an evolving process. It would be my understanding that if they collected the funds, those should at some point become public funds.”
High school district Superintendent David Vierra said he could not give a clear answer on who has rights to the money, since it was raised privately from community resources.
“Where that is and what account, we don’t know,” he said. “As to where that goes, rightfully, that’s a question that I think will have to be researched.”
State officials also were uncertain about the appropriate disposition of the money Hearns said was raised by school supporters. At some point, like any creditor, the state wants its money.
“They were destined to owe us money at the end of the year just because the (enrollment) data was dropping,” said Cindy Chan, an administrator in the state education department’s charter school division.
The total adjustment, including the drop in enrollment and the prior deduction, “probably would have wiped them out,” she said.
Normally, the state education department would withhold payments to the school. But the Hearns school is closed, and IT won’t get any more money from the state.
“At this point, we’ll be billing for the money,” Chan said.
The $54,000 Hearns spoke of July 13 is another matter. Like the high school district, state officials could not give a clear answer on who has jurisdiction over money in a separate account that flowed from fund-raising.
A shocking decision
The rejection of an extension for the charter shocked Hearns. In the two weeks since the school lost its charter, he has been rethinking the meeting.
“I asked myself, ‘If I was sitting on the board with the Antelope Valley Union High School District and was faced with a similar set-up, what would I do?’ ”
Hearns’ answer, not surprisingly, is different from the conclusion reached by the high school district. He expected a 4-1 vote in his favor.
“These are people I believe are my political friends,” he said. “They were honest in their decision, but they were not willing to take a chance, and that’s what we needed.”
Hearns worked for three years to establish his school before the high school district finally accepted the charter.
The First Missionary Baptist Church and adjoining school fell within the boundaries of the Keppel Union School District, which serves kindergarten through eighth-grade students from Littlerock, Pearblossom and a portion of Lake Los Angeles. Keppel trustees rejected Hearns Charter four times in three years, citing concerns over academics and the school’s ties to the church.
Hearns turned to the high School district, which granted the charter on a 4-1 vote. No member of that school board is still serving.
The dissenting trustee, Cheryl Lundgren, said at the time she had questions about the charter’s finances.
“I think there could be some serious cash-flow problems in getting the school off the ground,” Lundgren said in April 2000.
It turns out that Lundgren’s view was prescient.
Cash flow problems arrived early. The charter school’s first administration did not keep adequate records, especially regarding attendance. It was a mistake that eventually doomed the venture.
In 2002, Gloria Swift became the charter school’s second principal, succeeding Patricia Rhodes, who helped found the school. According to Hearns, he and Rhodes had different opinions about the direction of the school.
Swift took over July 1, 2002.
“By 4:30 p.m. on July 1, I realized there was a problem,” she recalled in a recent interview with the Valley Press. “While I was clearing (Rhodes’) desk, I found all these unpaid bills. By July 2, I had confirmed we had a problem.
“On July 5, I opened my checkbook and started paying thousands of dollars in bills.”
Swift said she has never been reimbursed. “That was the beginning of the end,” she added.
Swift had never worked at a charter school before, and she had never been a principal. Her credentials were as a teacher.
Hearns told the Valley Press he had no recollection of Swift’s paying bills out of her own account. At the request of the newspaper, Swift provided copies of two personal checks, one written to Pacific Bell for 1,431.66, the other to AT&T for $323.38. Both were dated July 15, 2002.
Told of the checks, Hearns said: “I’m not saying she didn’t. I’m just saying I didn’t know anything about it.”
Swift arranged audits of the school’s first two years, and for annual reviews after that.
“I hung in there because I thought I could make things work,” she said.
The audits took almost two years, a result of disorganized finances and missing records.
During Swift’s tenure, the Hearns charter was “basically running on reduced costs,” the former principal said. When she started, the school had $7,777 in its county account. Several other accounts were overdrawn, she said.
Swift quit as principal in February of this year, but he stayed on to help with the transition of her successor, Willie Thomas, a veteran administrator retired from the Palmdale School District.
Thomas originally was brought in as a consultant, but said his job “evolved.”
Swift’s departure preceded the school’s attempt to have a charter extension approved by the Antelope Valley Union High School District. The high school board concluded that unless the money and accounting problems could be resolved, the school’s charter could not be extended.
Swift’s departure didn’t figure in the outcome with the board, Thomas said.
He added: “This charter renewal was not about her. It was not about me. It was about the process and the procedure, and making sure those things took place.”
Swift said Thomas never appreciated the gravity of the school’s funding problem. Thomas, in appearing before the high school board July 13, had no records or business plan to give the board, she said
“I guess he (Thomas) thought there was money there and I wasn’t telling him. There was nothing else for me to cut,” Swift said.
She added Thomas “needs to understand that you can’t come into a situation and think you know everything.”
Interviewed by the Valley Press, Thomas said he was unaware of the $146,982 shortfall. He did not dispute the numbers.
“The decision to not recharter, and our decision not to challenge, have been good solid educational decisions, and good finance decisions,” he said. “Everybody did their job.” The high school board “did a good job in terms of their fiduciary duty.”
Thomas is a candidate for the high school district board that denied Hearns’ charter’s renewal. He says the two matters are unrelated. “I had been looking at that for a while. It’s very hard for a man in my background and expertise to just be retired,” he said.
Future plans
Whatever becomes of his charter school, Hearns has his eye on starting a private or Christian school.
First Missionary Baptist Church of Littlerock owns the school property and everything in it, according to Hearns and Thomas.
It remains to be seen how Hearns will finance the venture. He declined to state whether he would use the $54,000 he claims to have for a new school, or if it will go toward the charter school’s remaining debts.
“If it turns out some money can be used for that, we’ll do that,” he said. “I will comply to whatever is right and reasonable. I’m going to wait and see what’s going to come from the state and from the district.”
Like anyone who runs a school, Hearns took his own lessons from the process.
“I still have that desire to help kids who can’t help themselves,” he said.
“When I do what is right, I have God’s favor,” Hearns said. “To do what is right, is to do what is right by law.”
Tags: avuhsd, charter schools, education