Thursday, May 23, 2002

Sabis audit stymied by missing documents

School given 90 days to produce the records

By Jennifer Mrozowski,
The Cincinnati Enquirer

        Ohio's state auditor said Wednesday a 2-year-old Mount Auburn charter school can't be audited because the school board hasn't produced the required documentation to complete the financial audit.

        The board of Sabis International School said it is having trouble obtaining the financial documents from the for-profit management company hired to run the school.

        It's highly unusual for a school to be considered unauditable, according to Kim Norris, spokeswoman for the auditor's office.

        Every public school in Ohio, including the state's charter schools, is audited annually.

        According to a letter dated May 22 and sent to the board and management company, the elementary school has 90 days to produce the documentation. If not, the state attorney general will issue a subpoena for the school board and its management company to appear in the auditor's office to explain the failure to provide the reports.

        If necessary, the attorney general could file suit to have the parties produce the documents.

Public money

        The 650-student school is operated by Cincinnati Education Management LLC, a subsidiary of Minnesota-based Sabis Educational Systems Inc. The school board terminated its contract with the company last year, in part because it could not obtain financial information from the company. The contract runs through the end of the school year. “Knowing the management team of Sabis, (the letter) will be responded to appropriately,” said attorney Michael Hawkins of Cincinnati-based Dinsmore and Shohl. Mr. Hawkins represents the management company.

        “We commend the state auditor,” said Charles Wallner, spokesman for the board. “If the management company fails to (produce the documentation), we're going to ask for help and support to get the records. This company has not been trustworthy with public money.”

Lawsuits filed

        The school's board in April sued the Ohio Department of Education and attorney general. It claimed the state, which funds the school, failed to properly account for school revenues and assist the school as required by state law.

        The management company sued the board this month for breach of contract and breach of fiduciary duty.


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