Options PCS in Dire Finanical Straits

Receiver Releases Findings

Options Public Charter School (Options PCS) will have deficit of approximately $1.6 million for FYI 2013-2014, according to the findings of a report by court-appointed Receiver Josh Kern. In the report, submitted to DC Superior Court Judge Craig Iscoe on Oct. 21, Kern revealed plans to initiate a staff “rightsizing” process designed to save $800,000. The school moved forward with this reduction in force on Nov. 1.

The hole in the Options PCS's budget is primarily driven by a drop in enrollment that resulted in a loss of $720,000 in revenue. However, an elaborate outsourcing scheme allegedly authored by the school's former managers is also said to have played a part in its fiscal debacle. The three former managers have been sued by the DC Attorney General for funneling approximately $954,000 to their own education management companies. These fiscal improprieties, the report states, led to the rescission of a major co-location grant and a reduction in Medicaid reimbursements.

In addition to financial challenges, Options PCS faces an immediate leadership deficit, Kern reported. With the removal of the prior management, the school has lost the ability to run its finances and operations. While Kern assembles a new team and solicits contractors, the law firm of Hogan Lovells is handling the schools role in the burgeoning litigation resulting from alleged prior mismanagement.

Here is a copy of the Receiver's Report.

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