Audit cites charter school that operates in Hamilton for major misspending, conflict of interest

A new state audit of the Richard Allen charter schools that operates a Hamilton facility includes multiple findings of illegally spent money in 2016-17 and allegations of ethics violations and conflicts of interest that have triggered an ongoing special investigation.

The audit comes 15 months after the Journal-News published an investigation into lack of oversight at Richard Allen, which operated four schools in 2016-17 and now has buildings on Shuler Avenue in Hamilton and in Dayton.

INVESTIGATION: Oversight lacking at Richard Allen schools

At the time, the state attorney general’s office did not know that Michelle Thomas — whom the state sued, alleging $2.2 million in misspending — was still running the schools.

Thomas is still the Richard Allen superintendent, and school leadership “strongly objected” to the state auditor’s findings in their official response.

The documents released Tuesday by Auditor of State Keith Faber’s office cover the 2016-17 school year, as multiple years of Richard Allen audits have been delayed.

The audit’s findings include:

• The school overpaid its former management company (the Institute of Management and Resources, which was also run by Thomas) by $852,618 in 2016-17 — $139,277 for Richard Allen Academy, $613,870 for Richard Allen II, $15,686 for Richard Allen III in Hamilton and $83,785 for Richard Allen Prep.

FEBRUARY: Bank buys Richard Allen school property on Salem

A “finding for recovery” seeking repayment of those funds was issued against IMR, which filed for bankruptcy protection more than two years ago, and against former treasurer Brian Adams and eight school board members: Alphonse Allen, Michael Brown, Gerald Cooper, Laquetta Cortner, Wanda Mills, Lonnie Norwood, Rhonda Ragland and Kelli Vaughn.

• The school also overpaid those eight board members by $1,110 to $1,375 each for attending meetings. The state filed findings for recovery against those eight and Adams for a total of $10,725 on that charge.

• Thomas improperly served as the superintendent of Richard Allen schools while serving as director of IMR, the school’s management company.

As the Journal-News reported last year, the audit shows IMR leased a 2015 Maserati car for Thomas, while claiming that Thomas made the lease payments. But elsewhere in the audit, the state makes clear that IMR “failed to provide a detailed accounting” of the services it provided to the school, bringing into question how its management fees were spent.

“Dr. Thomas may have violated (Ohio law) because her acceptance of the compensation and benefits from IMR may have impaired her ability to objectively and independently exercise judgment in matters concerning IMR in her role as the superintendent for the Richard Allen Schools,” the audit says.

2018 STORY: Richard Allen schools seek new sponsor to stay open

• On March 9, 2016, IMR transferred ownership of the Richard Allen school properties in the 600 block of Salem Avenue to Cash Money Properties at no cost, with Thomas signing the quitclaim deed. Cash Money Properties is owned by Adams, the former school treasurer. The school then leased the properties back from Cash Money Properties.

“The Auditor of State’s Special Investigation Unit is conducting an investigation of Brian Adams’ conduct related to this series of transactions,” the audit says. “As of the date of this report, the investigation is ongoing.”

School responses

The audits include the schools’ “official responses” to some of the findings.

Richard Allen officials argue Thomas’ continuing positions as superintendent and director of the management company are not a conflict under Ohio law. After IMR filed for bankruptcy, Thomas has continued running the schools out of the same building under the newly created Educational Management and Development Group.

The auditor’s office says that position is not in accordance with Ohio law.

2015 STORY: Appeals court upholds findings against Richard Allen

School officials argue in the audit that the $139,277 overpayment to IMR was forgiven as part of a school agreement to terminate IMR’s contract. But the auditor’s office says no documents have been presented showing any formal school board action to forgive the debt.

On the overpayment of school board members, the school argues that its board meetings were actually four separate board meetings, as there were four Richard Allen schools at the time. The state argues that’s not true, adding that the meeting minutes for each school “were identical in content, with only the header of each school name changed.”

About the Author