Updated at 4 p.m.
The School District of Philadelphia’s charter schools office announced today that it is recommending that North Philadelphia’s Khepera Charter School’s charter be revoked, citing “academic underperformance” and “evident financial instability.”
The office has been actively monitoring Khepera since the fall of 2015 because of multiple organizational compliance and financial health concerns.
“I am deeply concerned by what appears to be a gross misuse of both the public trust and the trust of students, parents, and staff,” said School Reform Commission Chair Joyce Wilkerson. “Our focus is on ensuring the best possible outcome for the students, family, and staff of Khepera who find themselves in this difficult situation.”
According to a press release from the District, 450 students attend the K-8 school, located at 926 W. Sedgley Ave. During the last year, the school's significant financial trouble has included failure to pay its rent.
Khepera’s charter was last renewed for five years in June 2014, with 22 conditions attached. It would be up for renewal in 2019, but the charter schools office decided that intervention was needed before then, given the conditions at the school.
According to the District, Khepera also has significantly underperformed academically since the 2014-15 school year and declined further in 2015-16. In fact, Khepera received the lowest overall score of all charter schools citywide on the 2015-16 School Progress Reports. The school’s overall score was 6; the highest possible score is 100.
Last week, the Philadelphia Inquirer reported that the school’s landlord had filed a lawsuit in Common Pleas Court for $87,346 in past-due rent and fees.
That revelation came after Khepera laid off several members of its staff in March.
In the revocation recommendation, the District’s charter schools office said Khepera had failed to submit required documentation, including two financial audits, and had not fixed compliance issues relating to board governance and administration, financial controls, financial health, and employment practices.
Current and former staff, as well as parents, have complained to the charter office, the memo said.
Other violations the memo cited were that board members “reportedly secured paid positions” at the school outside regular hiring practices and that paid Khepera staff allegedly made improvements to board members’ homes. It also said that board members, against policy, received school-issued cell phones and laptops.
The school also deducted contributions to the state retirement system, PSERS, from employee paychecks, but has not submitted the payments to PSERS since February 2016. And it has not reported staff changes to PSERS, resulting in the improper calculation of employee and employer deductions. It failed to maintain health insurance for its employees, lapsing for the month of December 2016.
There were also shortcomings on the academic side, the memo said: The school did not make sure all staff members were "highly qualified" under Pennsylvania law or that 75 percent were properly certified for their teaching positions. Its English Learner policy does not provide adequate information on identifying students, instructional models, or exit criteria.
“Due to the significant academic underperformance, the seriousness of the substantiated claims against the Charter School and the evident financial instability of the Charter School, the CSO does not believe that further monitoring of the Charter School alone, without action by the SRC, is in the best interest of students, families, staff, and the public,” the revocation memo said.
Before the District's revocation decision, Khepera leaders told the staff in a memo that they were working to resolve the issues and that the school would continue to operate throughout its five-year agreement with the District, which ends in June 2019.
Candy Lerner, executive director of the Pennsylvania chapter of the American Federation of Teachers, said she was “not surprised” to learn that the school has been recommended for closure.
“We’ve been concerned for a long time,” particularly about financial issues, said Lerner, whose union represents teachers in the school. “It’s a shame for all those families of those students that are going to be displaced, and for our members, who will be looking for other jobs.
“I’m not sure they even saw this coming. They knew there were problems, and we’ve been working with them to figure out what’s going on. … Money has been an issue for the last couple of years.”
Among the financial concerns were late payments. Teachers also reported that deductions made from their paychecks for pensions weren’t turning up in their state pension accounts, Lerner said. Where those funds went remains unclear.
“We can only surmise what might have happened to that money, but we don’t know for a fact,” Lerner said. “It’s something that I had seen before – Germantown Settlement withheld the [pension] money and used it to do other things, and then made the payments.” Germantown Settlement was shut down in 2010, due in part to financial problems.
Lerner said small independent charters are particularly vulnerable to financial problems.
“I think the grassroots charter schools have had more trouble because they don’t necessarily do the things you need to do to keep money coming aside from your per-pupil expenditure,” she said. “They don’t usually hire grant-writers or find other sources.”
And although well-known charter advocate Walter Palmer was recently brought on as CEO to help with enrollment and board practices, Lerner said that founder and board president Richard Isaac has been the most consistent presence on the school’s leadership team.
“The board has changed all the time, but Richard Isaac has remained the head of that board,” said Lerner, who helped negotiate the school’s first union contract about 10 years ago.
The process for revoking a charter can be lengthy. The state’s Charter School Law sets out several steps for the process, including public hearings, time for public comment and an appeals process.
Although the District is moving to close Khepera, other charters have shut down on their own. Facing academic and financial crises, Walter Palmer Leadership Learning Partners Charter School closed in the middle of the 2014 school year.
Palmer took over as acting CEO of Khepera in December 2016.
Palmer and Isaac could not immediately be reached.
In addition to its financial woes. Khepera is facing a whistleblower lawsuit from a former employee who contends that his contract wasn’t renewed after he raised complaints about the actions of the school’s board of trustees.
According to the civil suit, which was filed in March, Mukasa Afrika worked at the school for 10 years and was promoted to chief administrative officer in July 2014. His contract was for a one-year term that could be renewed annually by the school’s trustees.
Afrika says that his contract was not renewed in June 2016 because he had complained to the School District’s charter office that “numerous board meetings were being held out of compliance with the Sunshine Act and expressed concern that the trustees were overreaching into the administration of the school and mismanaging the school's finances.”
This is a developing story. Please check back for updates.
Dale Mezzacappa, Bill Hangley Jr. and Avi Wolfman-Arent of NewsWorks contributed to this story.