kidcs summary revocation documents redacted_1

8/6/2019 KIDCS Summary Revocation Documents REDACTED_1

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THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK / ALBANY, NY 12234

SENIOR DEPUTY COMMISSIONER FOR P-12 EDUCATION

May 4, 2011

Julio CottoExecutive DirectorKingsbridge Innovative Design Charter School295 West 231st StreetBronx, NY 10463

Members of the Board of Trustees - Kingsbridge Innovative Design Charter School(as listed on page 3 of this letter)

Dear Sirs and Madams:

Thank you for the material that you s ubmitted to the New York State Edu cationDepartment in response to the remedial ac tion plan which was included in the March 24,2011 Probation Order and Notice of Int ent to Seek Summary Revocation (Order andNotice) for Kingsbridge Innov ative Des ign C harter School (School). Howev er, theDepartment continues to have very serious concerns about the fiscal conditions andleadership of the School as outlined in the Order and Notice.

Pursuant to the timeline provided in the Order and Notice, you were notifiedyesterday that, after reviewing the material that was provided in response to the remedialaction plan, the Department has decided to c ontinue to pursue summary revocation of theSchools charter and certificate of incorporation pursuant to Education Law 2855(3). Thegrounds for the Departments decision are set forth in the attached doc uments (NYSEducation Department Recommendation for Summary Charter Revocation for KingsbridgeInnovative Design Charter School (May 3, 2011) and Attachments A-E) . Pursuant to theOrder, the School remains on probation until May 17, 2011.

The Dep artment will present its recomme ndation for revocation before a Pane lconsisting of at least three members of the Board of Regents, as set forth in 3.17 (a)(3) ofthe Rules of the Boar d of Regents. The pr esentation shall take place on M ay 16, 2011 at11:40 a.m. 12:40 p.m. at the State Education Departm ent, 89 Washington Ave nue,Albany, New York. The Panels recommendation on revocation will then be presented tothe full Board of Regents for final determinati on at the scheduled meeti ng of the Full Boardof Regents on May 17, 2011.

As stated in the Order and Notice, the School has the opportunity to submit a writtenresponse which pres ents the Schools position. The response may include supportingaffidavits, exhibits and other documentary ev idence (including any evidence that theproblems at issue hav e been cor rected), and ma y include legal arguments (3.17(a)(2) of


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the Rules of the Board of Regents). Please s ubmit any written response in onesubmission, no later than 5:00 p. m. on May 9, 2011, to the New York State EducationDepartments Office of Counsel, Education Building, Room 112EB, Albany, New York12234 and by email to: [email protected]. The subject line should read: KingsbridgeInnovative Design Charter School. This May 4, 2011 letter and its attachments, together

with the Schools written response, if any, will be provided to the Panel of Regents prior tothe May 16, 2011 presentation.

By May 9, 2011, the School must also inform the Department, in writing, if it requeststhe opportunity for oral argumen t before the Panel, pursuant to 3.17(a)(3) of the Rules ofthe Board of Regents. The School may designate one or more representative(s) to provideoral argument, and the School will have 25 minutes to present its posit ion. A failure tosubmit a ti mely request for oral argument will result in the Board of Regents decidingwhether to revoke the Schools charter ba sed only on any written submissions and theDepartments presentation to the Panel.

The date and time of the oral argument and/or consider ation of the revocationapplication by the Board of Regents are subject to change wi thout further Order of theCommissioner, and the School wil l be provided with written not ice by the Department ofany such changes.

The School has the option of voluntarily seeking an order from the Board of Regentsrevoking the Schools charter and certificate of incorporation, and dissolving the corporationpursuant to Education Law 219(3). For more information concerning the voluntaryrevocation process please contact Cliff Chuang, Director of the Charter School Office at(518) 474-1762.

Sincerely,

John B. King, Jr.

Attachments
mailto:[email protected]:[email protected]


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Page 3

Kingsbridge Innovative Design Charter School

295 West 231 StreetBronx, New York 10463

(917) 858-1191

[email protected]

Mr. Julio Cotto, Executive Director

Mr. John Torres, Board Chairperson

Mr. Troiyle Sanon

Ms. Nelly Evans

Ms. Molly Lopez

Ms. Nancy Rivera

Mr. Ed Montolio

Mr. Hector H. Lopez

Mr. Jorge Chang

Ms. Dinamary Arvelo

Mr. Christian O. Guerrero

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NYS Education Department Recommendation for Summary Charter Revocation forKingsbridge Innovative Design Charter School (May 3, 2011)

Background Information

Education Law 2855(1) provides that the Board of Regents may revoke acharter schools charter for grounds that include the following:

(b) Serious violations of law; or

(c) Material and substantial violation of the charter, including fiscal management.

Education Law 2855(3) provides that the Board of Regents may place a charterschool falling within the ab ove two provis ions on pr obationary status to allow theimplementation of a remedial action plan. The failure of a charter school to comply with

the terms and conditions of a remedial action plan may result in summary revocation ofthe schools charter. Section 3.16(a) of t he Rules of the Board of Regents delegates tothe Commissioner of Education the authority to plac e a schoo l on probationary statusand to develop and impose a remedial action plan pursuant to Education Law 2855(3).

The Kingsbridge Innovative Design Char ter School (School) was authorized bythe Board of Regents on January 12, 2010. The School was sc heduled to open inSeptember 2010 in New York City's Community School District 10 in the Bronx. Th eschools current enrollment is approximately 143 students in Kindergarten and Grade 1.

During the fall and winter of 2010- 11, the Stat e Educ ation Department(Department) had ongoing communications with the School ( letters, emails, phoneconversations) regarding issues, complaint s and concerns that were brought to theDepartments attention by a member of the Schools Board of Trustees, members of theSchools staff and parents of students at the School. On March 9, 2011, Departmentstaff conducted a site visit to the School to assess the fiscal and educational soundnessof the School, collect data pertaining to t he formal information requests sent by theDepartment to the Sc hool on January 14, 2011 and February 17, 2011 (Attachment A),and to meet with the Trustees, school staff, t eachers, parents, and external consultantsworking with the Schools leadership. Th e site vis it included interviews with thes estakeholders, document review, classroom obs ervations, and attendance at a regularlyscheduled meeting of the Schools Board of Trustees. A repor t of this site visit isattached (Attachment B).

On March 24, 2011 the Commissioner pl aced the School on pr obationary statusand imposed a remedial action plan. (Attachm ent C). The Proba tion Order and Noticeof Intent to Seek Summary Revocation of the Schools charter (Order and Notice)provides background information on complaints and concerns that were brought to theattention of the Department, t he interaction that the Depar tment had with the School onthese and other matters during the fall an d winter of 2010 and spring of 2011, and

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includes examples of violatio ns of law and violations of the charter, including fis calmismanagement, that ultimately lead to the School being placed on probationary status.The School was required to provide spec ific written information ev idencing theimplementation of the remedial action plan no later than 5:00 p.m. on Friday, April 29,2011.

The School provided documents in a seri es of email communications with theDepartment as a response to the Remedial Action Plan. The documents arrived in apiecemeal fashion in dozens of emails th roughout the course of the weekend. TheSchool did not prepare a comprehensiv e or fo cused reply to the Probation Order, andDepartment staff matched information submitted by the School to items in the ProbationOrder to the best of their abi lity. The School identified so me documents as respondingto specific requirements of the R emedial Ac tion Plan, however some information wasprovided without any indic ation of whic h of the specific requirements they wereconnected to. A com plete set of the emai ls and doc uments submitted by the Sc hooland considered by the Departm ent in preparing the May 3, 2011 letter and this memo

will be provided to the Regents Panel prio r to the oral argument. The Departmentreviewed and cons idered all do cuments provided by the Sc hool in response to theremedial action plan, including those re ceived after the April 29, 2011 deadline butbefore 9:00 p.m. Monday, May 2, 2011. A su mmary of the Schools response and theDepartments assessment of w hether or not each of the remedial plan requirement swas sufficiently addressed is attached (Attachment D).

In addition, on April 26, 2011, the Departm ent conducted a public meeting at theSchool to afford parents, staf f and all other interested parti es to provide c omments andinformation relevant to the School. The notice of that public meeting is attached(Attachment E). Though no official count of attendance was taken, the multipurposeroom at the School was fille d, with appro ximately 100 to 150 community members inattendance. Approximately 45 people m ade verbal public comm ents (limited to 2minutes each) during the meeting. A range of individuals, including parents, current andformer teachers and staff, current and form er board members, and other communitymembers spoke.

Reasons for the Departments Recommendation for Summary Revocation

The Departments recommendation to t he Board of Regents to revoke theSchools charter is based on th e Schools insufficient and lim ited response to the threecategories of violations identified in the March 24, 2011 Order and Notice; Managementand Financial Controls, School Governance, and Educational Program.

Fiscal Management and Controls

The March 24, 2011 Order and Notice prov ides several examples of violations of5.1 of the Schools charter which provides t hat, (t)he Charter School shall at all timesmaintain appropriate managem ent and financial controls. In response to the

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requirements of the Remedial Ac tion Plan included in the March 24, 2011 Order andNotice, the School provided s everal doc uments related to financial sy stems andcontrols. Attachment D outlines the Departments assessment of the sufficiency of theSchools response in this category.

Despite the Schools submission of ma terials in response to the probationaryRemedial Action Plan fiscal it ems, the Department continues to have s erious concernsabout the fiscal stabilit y and management of the school. T hough there are a number ofissues, the three areas of greatest concern are described below.

1. The School has not provided evidence that demonstrates sufficient cashflow to sustain operations in May and June 2011. Despite the Schoolsconsistent struggle with cash flow during its first year of operat ion, the School didnot submit any information related to proj ected cash-flow for the months of Mayand June 2011 by the 5:00 p. m. on Friday, April 29, 2011 deadline. Department

staff had to explicitly request this info rmation after the 5:00 p.m. April 29, 2011deadline through phone calls to the schools board chair and treasurer. The firstversion submitted on Friday ev ening, provided little to no detail about ho w theSchool would maintain sufficient cash-f low to continue operations through theend of the current academic year. After a second request, a revised version wassubmitted on the evening of Sunday, May 1, 2011. The two versions submittedvaried widely in pres enting how the Sc hool would s ustain operations for theremainder of the school year. The seco nd, more detailed ver sion noted theSchools reliance on a $200,000 bridge financing lone to sustain operationsthrough mid-May 2011. As of 9:00 p.m. on Monday, May 2, 2011, the School hadnot presented evidence that it has secured the br idge financ ing required tosustain operations through the end of this school year.

2. The School does not present adequate plans for financial accounting andcontrols.The School presents insufficient and contradictory organizational plansfor financial management and control. In par ticular, the organizational structurescurrently in place and/or proposed are not consistent with the approved charter, aproposed revision, or the financ ial policies and procedures recently approved bythe Schools board. Given the number of challenges the School has alr eadyfaced in terms of clarity about reporting structure at the st aff level and to theSchools board, the Departm ent is gravely concerned about the lack of clarity,specificity, and consistency in the proposed organizational and control structuresgoing forward.

3. The School has not presented sufficient evidence of fiscal solvencythrough the remainder of the five-year charter term.The Schools five-yearbudget does not present a cl ear picture for solvenc y. The Departments initialanalysis yielded several concer ns, includ ing revenue assumptions, particularlythose related to special educ ation, that are either inaccurate or unsupported,

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facilities costs and instructional costs that appear to be significantly reduced fromwhat was projected in the original charter budget with little explanation, and lac kof clarity about amortization costs. Based o n these factors, it is unclear whe theror not the Schools budget, as present ed, is solvent. Specifically, theassumptions about special education revenue and lack of clarity about

amortization costs could have s evere cash-flow impacts on th e schools Year 2operations.

More detail about the insufficiency of the Sc hools response c oncerning the Schoolsfiscal management and controls is included in Attachment D.

School Governance

Section 2.12 of the Schools charter and Education Law 2853(1)(f) state that theBoard of Trustees of a charter school, s hall have final authority for policy andoperational decisions of t he school. The Department continues to have serious

concerns about the governance and operational oversight of the School.

The Schools governing board has experienced significant turnover and instabilityover the c ourse of the charter term. In all, only one of the seven initial founding boardmembers, the board c hair, remains on the boar d of trustees. The Schoo l has also hadinstability in instructional leadership since the charter was approved in January 2010.

The Schools governing board and instructional leadership have made a series ofunfortunate operational and financial decis ions that have risked the health and viabilityof the Schools chart er. During the summer of 2010, the Schools leadership madedecisions r elated to f acilities and student transportation that resu lted in signific antexpenditures and delayed sc hool opening. Leadership c ontinued to make fiscaldecisions, outlined in the Site Visit Repo rt and Probation Order, which resulted inrestricted cash flow, dependence on short-term bridge loans, unpaid c ommitments toemployees and contractors and inappropriate fisca l controls. Over the last six weeks,the Schools leadership has also terminat ed employm ent of appr oximately half of theprofessional staff in the building and limited benefits for employees.

The Schools governing boar d has expended a significant amount of time andenergy this year patching toget her short-term financial fixes for cash flow problems.During interactions with the Departmen t, the Schools governing boar d has notdemonstrated an understanding t hat the Schools charter ma y be in jeopardy ofrevocation; an understanding of their role in dec isionmaking or leadership of the currentstate of the schools financia l and operational sit uation; or the need for strengthenedgovernance or instructional le adership. Much ener gy has been expended on divertingblame to former and current staff, rather t han strategically planni ng for improvement.At no time has the c urrent School leadersh ip proposed a modified or re-structuredleadership or governance struct ure, including, but not limit ed to, the removal of currentleadership or transfer of leadership to another set of indi viduals. At no time has School

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leadership shown initiative in reaching out for coaching or support for boarddevelopment or instructional leadership development.

The narrow focus on crisis management of the fiscal situation has left the currentschool leadership unable to fully comprehend the m agnitude of the issues at play.

School stakeholders have expressed (via bot h written comment as well as throughverbal comment provided during the Apr il 26, 2011 public meeting conducted by theDepartment at the School) their dissati sfaction with School leadership a ndadministrative decisionmaking.

Educational Program

The March 24, 2011 Order and Notice pr ovides s everal exam ples of how theSchool is not operating in an educationally s ound manner and is in violation of 2.1 ofthe charter agreement which provides that, (t)he Charter School shall implement theeducational programs set forth in the Application

As outlined in Attachment D, the School has not sufficiently addressed theviolations related to its educational program. Specifically, while the school has provideda description of the key elements of charte r design to be in place for September 2,2011, no evidence of plans for how thes e elements will be im plemented have beenprovided. In addition, while the School ha s now submitted a charter revisio n requestthat describes four charter revisions that the School would like to implement (reducingthe daily schedule, reducing the total number of instru ctional days, changing theSchools organizational structure, and cha nging the average number of students perclass in or der to accommodate a Collaborati ve Team Teaching class per grade), therevision request does not provide sufficient information about the requested revisions orinformation on how the Schools educational program will be impacted and/ or modifiedto accommodate the requested revisions. The School was also asked to provide, (t)hemethodology used in conducing the search for a new instructional leader and chief fiscalofficer and the criteri a applied to selection, including the job description, (Order andNotice, Page 4, Number 12). No job descriptions were provided and the information thatwas provided by the School is insufficient to determine the lines of accountability for keyaspects of school operations.

Finally, though a number of parents have ex pressed their satisfaction with theeducational program provided by the School (via both wr itten comment as well asthrough verbal comment provided during th e April 26, 2011 public meeting conductedby the Department at the School), a number of parents and teachers have raisedconcerns about both the adequacy of bas ic instruction and management of theeducational program at the sch ool. In particular, several parents and teachers (bothcurrent and former) commented on the severe disruption to the education programcaused by the abrupt and sudden dism issal of five teachers and four other staffmembers on Thursday , March 31, 2011. In two of six c lassrooms, both teachers weredismissed, and parents and teachers both spoke of how difficult it was at this late stagein the school year to adjust to new teachers and students.

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More detail about the insufficiency of the Schools response concerning the

Schools educational program is included in Attachment D.

Conclusion

The Department does not make this re commendation for summary revocation ofthe Schools charter lightly. We understand the significance of revoking the charter of aschool that has students in attendance. Many of the parents who have contacted theDepartment or who at tended the April 26, 2011 pub lic meeting have spoken eloqu entlyand emotionally about the School, the option it provides to the children in the communityand the dedication of the t eachers and staff to their students. The Departmentsrecommendation for summary revocation is based upon our sign ificant concern that thefiscal, gov ernance a nd progra mmatic instabilitie s will u ltimately result in the Scho olbecoming insolvent and incapable of operating during the course of a school year whichwould disrupt the education of the students in attendance at that time and would h ave

serious repercussions for the st aff of the School as well. Closing a school at the end ofa school y ear is disruptive and difficult for a school community; closing a school in themiddle of a school year could be devastating.

Ultimately, it is the res ponsibility of the Department, as the administrative arm ofthe Schools authorizer, the B oard of Regents, to assess t he capacity of the School tooperate in a fiscally and educ ationally sound and responsib le manner. Our assessmentin this case is that the School has not demonstrated sufficient capac ity to operate in afiscally and educational sound and responsibl e manner or to overcome the seriousviolations of law, m aterial and substa ntial violations of its charter and fiscalmismanagement. Therefore we hav e determined that it is in the best interests of thestudents and school community that the charter be revoked.

We note that in the event that the Board of Regents may ultimately decide torevoke the Schools c harter, the Department has been in contact with the NYCDOE toensure that all student s at the School will receive appr opriate educational placement sfor the 2011-12 school year. NYCDOE has assured the Department that placementswill be found for all of the students.

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Attachment A


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ASSISTANT COMMISSIONER

OFFICE OF INNOVATIVE SCHOOL MODELS

ROOM 475 EBA

Tel. 518/474-4817

Fax 518/474-7558

January 14, 2011

John TorresChairman, Board of TrusteesKingsbridge Innovative Design Charter School268 Van Cortlandt Park AvenueYonkers, New York 10705

Dear Mr. Torres:

During this fall and winter, staf f from the New York State E ducation Department (NYSED)Office of Innovative School Mo dels has been in contact with Kingsbridge InnovativeDesign Charter School (KIDCS or the School) by vi siting the school, through e-mailcorrespondence, and by telephone conversations. As they do with all schools authorizedby the Board of Regents, staff have partner ed with KI DCS to as sess the educational andorganizational operations of th e school; and to ev aluate the extent to which the s choolcompleted the procedures required for successful school launch.

Over the course of the last 36 hours, a number of significant issues have been brought tothe attention of NYSED staf f whic h require further inve stigation. Perhaps most

distressingly, many of these issues were not raised by KIDCS Board of Trustees, but byoutside concerned parties. Some of these issues call into question the fiscal health andfinancial viability of the school.

This letter constitutes an official warning that the Kingsbridge Innovative Design Char terSchools charter may be in j eopardy due to concerns r egarding governance, educationa lsoundness and fiscal soundness.

The New York State Education Department (NYSED) requests that responses to theinquiries made below be addressed no later than Monday, January 24, 2011. Failure torespond in a comprehensive and timely fashi on may result in probationar y action being

imposed, which may ultimately result in revocation of the schools charter.

1. KIDCS is currently operating without an approved Board of Trustees. During aconversation with NYSED staff on December 29, you indicated that the School hadidentified and appoint ed severa l new trustees to the board. At that time, staffadvised you that t he School was required to seek approval from NYSED prior toappointing trustees to the board. Further, staff requested that you provide completeresumes, prospective board member ques tionnaires, signed statements of


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assurances from each of these prospec tive trustees, and the minutes of themeetings of the Board of Trustees at which these proposed appointment s were

discussed. To date, only partial pros pective board pac kages have been submittedto NYSED. Please s ubmit a complete package for each applicant. Please bereminded that the appointment of trustees is contingent upon approval from NYSED.

2. The school is currently operating w ithout a formal instructional leader. An e-mail received by NYSED on January 13, 2011, i ndicates that the instructional leaderof the School, Ms. Francesca Weis, is no longer serving as pr incipal, effectiveJanuary 4, 2011. NYSED was not officially notified of this action prior to itsexecution, nor was timely notic e provided thereafter. In addition the school hasprovided conflicting information to NYSED concerning the selection of Mr. Fiorentinoas either t he new instruct ional leader or as a consultant. Please cla rify the

relationship between Mr. Fiorentino and the school by providing a signed copy of thecontract for services. Who is providing supervision to KIDCS staff during this time oftransition?

3. School employees and families of children enrolled in the school have issuedmultiple complaints against th e school and Board of Trustees. Many of thesecomplaints are currently outstanding and unre solved. Please pr ovide an update onthe status of the Boar d of Trustees investigation and r esolution of complaints datingfrom November 7, 2010, and November 10, 2010.

4. Please provide copies of all minutes tak en at meetings of t he Board of Trusteessince the awarding of the charter. A request for this doc umentation was made

during the conversation with staff on December 29, 2010.

5. Please provide copies of all financial statements (inc luding quarterly financia lreports) provided to the Board of Trustees since the awarding of the charter.

6. Please provide a listing of all non-NYSED revenues received by the School since theawarding of the charter.

7. Please provide a listing of all contracts for services cu rrently in place for KIDCS.The list should inc lude the name of the entity, the negotia ted services, the terms ofservices, total contract value, and method of selection. In instances where trusteesapproval was required, please provide copies of trustee resolutions approving such

contracts.

8. Please provide an itemized li st of expenditures (electroni c files) dating from Augus t2010 to date.

Final and complete responses to this inquiry must be received no later than Monday,January 24, 2011. Please send the responses to J amal L. Young, Regio nal Associate,Office of Innovative School Models, Charte r School Office, Ne w York State Education


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Department, 55 Hansen Place, Brooklyn, Ne w York 11217. Mr. Young may be reached at(718) 722-2731 or via e-mail [email protected].

Questions concerning this inquiry should also be directed to Mr. Young.

Sincerely,

Sally Bachofer

c: John B. King, Jr.Erin OGrady-ParentMarc SternbergLeslie TemplemanJamal Young


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OFFICE OF INNOVATIVE SCHOOL MODELS

ROOM 471 EBA

Tel. 518/474-1762

Fax 518/474-3209

February 17, 2011

John TorresChairman, Board of TrusteesKingsbridge Innovative Design Charter School268 Van Cortlandt Park AvenueYonkers, New York 10705

Dear Mr. Torres:

Thank you for the material that y ou provided to Jamal You ng in response t o the January

14, 2011, letter to you from Sally Bachofer , Assistant Commissioner of the Office ofInnovative School Models at the State Education Department.

The purpose of this letter is to request some additional doc umentation pertaining toKingsbridge Innovative Design Charter Schools cu rrent financial situation. Specifically , weare requesting the following documentation:

Month to month cash flow proj ections, indicating ac tual revenues and expenses as ofJanuary 31, 2011, and project ed revenues and expenses until the end of the currentfiscal year (June 30, 2011).

Current FY 2011 budget approved by the schools governing board.

Any projected budget/fiscal information review ed or discussed by the schools board forbeyond June 30, 2011.

Please for ward this documentation to Jamal L. Young, Regional Associate, Offic e ofInnovative School Models, Char ter School Office, New York State Education Department,55 Hansen Place, Brooklyn, New York 11217. Mr. Young may be reached at (718) 722-2731 or via e-mail at [email protected] Please provide t his material to Mr. Youngno later than Thursday, February 24, 2011.

Questions concerning this request should also be directed to Mr. Young.

Sincerely,

Leslie E. TemplemanAssistant Counsel

c: Sally BachoferCliff Chuang

Jamal Young


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Attachment B


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NewYorkStateEducationDepartmentCharterSchoolOfficeKingsbridgeInnovativeDesignCharterSchool

Year1SiteVisitReportName of Charter School: Kingsbridge Innovative Design Charter School

Date of Site-Visit: March 9, 2011 Date of Report: May 3, 2011

Members of Site-

Visit Team:

Jamal L. Young, Associate, NYSED Charter School OfficeCliff Chuang, Director, NYSED Charter School OfficeKalimah Geter, Associate, NYSED Charter School Office

The primary purpose for site visits conducted by the New York State Education Department (SED) tocharter schools authorized by the Board of Regents is to gather and document evidence about the schoolsperformance, implementation of the educational and organizational program outlined in its charter, andcompliance with laws and regulations. On March 9, 2011, an SED team visited the KingsbridgeInnovative Design Charter School, located at 295 West 231st Street, serving approximately 145 studentsin grades K and 1. The school is in its first year of operation. During this visit, the team interviewed boardtrustees, school administrators, faculty, consultants working with the school, and parents. Members of the

team also conducted observations in five of the six main classrooms (one classroom was on a field trip),and attended a regularly scheduled board meeting in the evening of the day of the visit.

Three guiding questions serve as a lens to direct the review:

Is the school faithful to the terms of its charter? Is the school educationally sound? Is the school fiscally sound and organizationally viable?

Observational findings from this site visit are presented in each of these areas below.

1. IS THE SCHOOL FAITHFUL TO THE TERMS OF ITS CHARTER?

MISSION OF THE SCHOOL

Mission The school is faithful to the mission, vision, and educational philosophy defined inthe current charter.

Findings

The School has as its mission to empower its students, families, faculty, and community tobecome creative, collaborative, socially responsible leaders to meet the challenges of the 21stcentury for a sustainable and equitable future.

In interviews conducted throughout the day, members of the school community (trustees,administrators, faculty, and parents) reported KIDCS faced several challenges in implementing

the mission and educational philosophy.o Trustees and parents stated the social constructivism and sustainable efficiency

philosophies were implemented unevenly due to several factors including financialconstraints, board policy, and administrative action (modified staffing model, adjusteddaily schedule, use of assessments and instructional materials, etc.).

o Trustees and administrators delineated, during interviews, the manner in which the largervision for the school (providing second language instruction, a distributed leadership


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model between and instructional and operations leader, and democratic leadershipstructures for parents and teachers) became circumscribed.

o In discussions with the SED team, KIDCS faculty conveyed limited clarity on the variouseducational philosophies, which ranged from arts infused integrated thematicinstruction to structure for each person (intended to offer differentiated instructionacross domains, skills and content) (KIDCS Charter, pg. 48). Several acknowledgedthat they were unaware of the schools mission when they were hired.

ORGANIZATIONAL STRUCTURE

Leadership/

governance

The board of trustees implements the governance and leadership structure as definedin the current charter.

Findings

The board of trustees has failed to implement the governance and leadership structure as definedin the approved charter.

In the original charter, the school proposed a board of trustees comprised of seven members,operating in a committee structure. The school proposed a building leadership structure of anexecutive director and principal, in which the principal reported to the Executive Director (page748 of charter). Effective January 4, 2011, the KIDCS board of trustees removed theinstructional leader. SED was notified of the change on January 13. On January 24, a consultantbegan an engagement with the school to provide instructional leadership. SED informed theschool that the consultant could not supervise instructional staff. At the time of the visit, theconsultant reported that instructional leadership for the faculty was provided throughcollaboration between a master teacher and the schools social worker. This had been the coreresponsibility of the school principal position (page 749 of charter). These modifications to the

instructional program were not approved by the Charter School Office and the Board of Regents. As of the time of the visit, a board of trustees of six members governed the school. The bylaws

require a minimum of five trustees. Interviews conducted at that time indicated the School wasoperating outside of its approved committee structure. Based on ongoing communications withthe board chair, a review of board minutes, and correspondence with KIDCS, governancedecisions were made either by the full board or by the board chair and Executive Director.Trustees who chaired the Hiring, Curriculum and Professional Development (HCPD) Committeeand the Finance, Facilities and Operations (FFO) Committee resigned in October and January,respectively. At the time of the meeting, the Board had actively solicited replacements for thesevacancies. Five candidates for the board were presented for consideration at the meeting onMarch 9.

In all, only one of the 7 initial founding board members, the board chair, remains on the board oftrustees. Based on letters of resignation forwarded to SED, three departing trustees expresseddissatisfaction with board leadership, particularly in relation to the failure to provide sufficienttransparency and disclosure of school operations and fiscal management.

As of the time of the visit, the KIDCS board had not re-established the committee structureoutlined in the charter and the organizations bylaws. A review of the monthly meeting minutesindicates that considerable discussion has been directed to the resolution of the facility and long-term financing needs of the school. Discussions on the academic performance of students is not


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reflected in the minutes of meetings conducted in October or December.Nor was academicperformance discussed at the meeting attended by NYSED staff on March 9.

The School has had instability in instructional leadership since the charter was approved by theboard of Regents in January 2010. The initial co-applicant and first proposed instructional leaderwas not hired prior to the opening of the school. In the months following charter approval by the

Regents (February April 2010), the schools HCPD committee opted to open a formal searchprocess and offered the position of principal to another candidate. This candidate wassubsequently removed from the position in January 2011. The principal is no longer an ex oficiomember of the board of trustees.

At a board meeting in April 2010, the new principal candidate was hired at a rate thatsignificantly exceeded the budget. The salary of the Executive Director was raised to equalizetheir compensation, and to reflect their collaborative roles are co-leaders of the school. Thecharter projected only a modest surplus of $1,145 in Year 1, prior to this modification. SED wasnot formally notified of these actions by the trustees. No approval was issued by SED.

KIDCS continues to face significant operational, instructional, and fiscal challenges, each ofwhich threaten its ability to fulfill the schools mission, vision and educational program.

EDUCATIONAL PROGRAM

Academic program The school implements an academic program, including pedagogical approach,curriculum, assessment, and other unique elements of the educational philosophydefined in the current charter.

Student services The school provides services for all students, including but not limited to those withspecial education, English Language Learner needs and those eligible for thefederal free- and reduced-price lunch program, as defined in the current charter.

Enrollment The schools student recruitment and enrollment process is faithful to that intendedin the charter and as defined by statute and regulation.

Findings

The school design is based on the philosophy of social constructivism. KIDCS seeks to establisha learning environment in which knowledge is constructed, or built, around the prior knowledgeof students and their interaction with the world around them. Cornerstones of this approachinclude cooperative learning, design-based learning, inquiry-based teaching, and project/problem-based learning. Several teachers reported that they were unaware of the schools uniqueeducational philosophy when they were hired, and reported receiving limited and fragmentedprofessional development. Teachers also noted that until very recently, they received littledirection from school leadership in how to implement the education program as outlined in the

charter. The site visit team observed limited evidence of these practices during classroomobservations. Throughout the visit, most students were observed in large classroom settingsreceiving direct instruction. Differentiated instruction was observed in only one classroom, whereone of the two teachers sat with a small group of students facilitating a guided reading session.The remaining students in the room seemed to be engaged in independent activities, as the secondteacher rotated the room to keep students on task and to assist where necessary.

Board members, administrators, teachers and parents noted that KIDCS provides a strong basisfor students to learn about the surrounding environment through lessons provided by a certified


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4

park ranger. The lessons of the park ranger have been complemented by multi-disciplinaryinstruction on the uses and impact of wood in the daily lives of the KIDCS community. Inaddition, KIDCS provides a handwork class, based on the Waldorf education model, whichsupports project-based learning by students.

The educational program has diverged from the program proposed in the charter. KIDCSpresently operates without an instructional leader. The School proposed a lead teacher-assistantteacher model, which was eliminated in favor of a co-teaching approach enlisting two leadteachers.

The original charter application proposes that the school will be assessment driven. Teachers,however, lacked rich assessment data of student performance due to delays in obtaining andissuing Fountas and Pinnell assessments earlier in the year. On the day of the visit, KIDCSadministrators reported that new assessment data was being analyzed in anticipation of reportingstudent academic achievement results to the board of trustees.

The original charter application planned for 185 days of instruction. It is unclear whether KIDCSwill be able to meet this requirement given that instruction did not begin until September 13,2011 due to delays in construction and code compliance at 295 West 231st Street. A resolutionwas passed at the March 9 board meeting to ensure the school provided a minimum of 180

instructional days due to the unusual amount of inclement weather this school year. School leadership acknowledged that the school is not providing world language instruction as

proposed in the original charter application.


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2. IS THE SCHOOL EDUCATIONALLY SOUND?

STATE MANDATED ASSESSMENT

NYS testing

program

Students at the school demonstrate Proficiency, or progress toward meetingproficiency targets on state standards, as measured by the NYS Testing Programassessments in all subject areas and at all grade levels tested for accountability

purposes.

Accountability

goals The school meets, or shows progress toward meeting, NYS Testing Program goals.

AYP The school makes Adequate Yearly Progress (AYP) in the aggregate and for allstatistically significant sub-groups. The school is not identified for accountability

purposes (not designated as in Needs Improvement, Corrective Action, orRestructuring).

Findings: Not applicable to KIDCS. The school is in its first year of operation, serving students in

Kindergarten and Grade 1. The students are not tested in the New York State Testing Programand the school will not receive an AYP determination.

OTHER ACHIEVEMENT, IMPROVEMENT, AND ASSESSMENT MEASURES

Accountability

goalsThe school meets, or shows progress toward meeting external assessment goals.

Internal

measures of

student

achievement

Students demonstrate progress on internal measurements linked with the schoolspromotion or exit standards.

Accountability

goals

The school meets, or shows progress toward meeting internal assessment goals.

Findings:

At the time of the visit, nopreliminary data on student achievement was available. KIDCS staffreported that data analysis on recently obtained scores was ongoing, and that a report to thetrustees was forthcoming.

CURRICULUM

Implementationof the

curriculum

The schools curriculum, as implemented in the classroom, consistently addresses theskills and concepts that all students must know and be able to do to meet NYSLearning Standards, and supports opportunities for all students to master theseskills and concepts.

Program

evaluation

The school has systems and structures in place to review, regularly andsystematically, the quality and effectiveness of the academic program.

5


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6

TEACHING AND LEARNING

Instruction School-wide instructional practice is aligned with the school design and student

learning objectives; is consistent and effective; and, conveys clear expectationsto students.

Effective Teaching There is evidence of rigor, relevance, pacing, alignment of curriculum to statestandards, and student engagement.

Assessment and

instructional

decision-making

Teachers and school leaders use qualitative and quantitative evidence to inform andguide instructional planning and practice.

Findings:

According to the Executive Director, KIDCS has done extensive work to realign instruction withthe charter. Under its revised approach, KIDCS begins the day with a morning meeting focusedon a core virtue. On the day of the visit, the core virtue was compassion.

Administrators, teachers, and parents described that students receive instruction around anintegrated core of subjects punctuated by thematic units. KIDCS schedules 90-minute blocks inliteracy, math and science each day. An example of thematic units and core integration is theKIDCS instruction on wood and its uses in society. Parents and teachers described that studentswork with pieces of wood, observe wood in its natural state in parks, identify wood in variousprocessed states as paper, as blocks within classrooms, and in the construction of buildings.

KIDCS original charter application called forCore Knowledge instruction in social studies,Saxon Math in mathematics, supplemented by Singapore Math, andFull Option Science System(FOSS) in science. The charter application noted that Saxon math would be used to guideinstruction, and that Singapore Math would provide breadth and depth and mental mathstrategies. At the time of the visit, KIDCS had not structured, planned or delivered instruction

using any of these curricula. Interviews with the schools instructional consultant revealed thatKIDCS also failed to establish classroom libraries, textbooks, guided reading materials, balancedliteracy materials, and instructional resources for word study. Teachers reported that materials forthe FOSS Science were received in November, but only for kindergarten students. Kits for firstgraders arrived just prior to the site visit. KIDCS staff reported recently receiving materials forinstruction in Singapore math. Saxon Math, according to KIDCS administrators, will not beintroduced to the curriculum until an unspecified time in the future. Teachers stated that guidedreading materials were received four school days prior to the site visit.

Fountas & Pinnell assessments, according to the consultant, were issued late. DIBELSassessments had not yet been given.

KIDCS provided limited evidence of an effective co-teaching model. At the time of the visit,

classrooms were taught by two co-lead teachers, instead of one lead teacher and one assistantteacher, as proposed in the charter application. It was unclear in some classrooms what roles eachteacher was intended to serve, and teachers noted that it was left up to them to decide whether aco-teaching or lead-assistant model was employed in classrooms. At the time of the visit, effortswere underway to provide teachers with coherent professional development and opportunities forcritical reflection to improve teaching.

The school does not employ instructional coaches, as outlined in the charter application.


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Teachers stated that they held the responsibility of purchasing instructional materials and studentliterature. In addition, teachers sought donations for instructional materials and student literature,in the absence of the school supplying classrooms with vital instructional materials.

SCHOOL LEADERSHIP

Effective

LeadershipThe school leader has the experience and skills needed to implement successfully

the schools charter.

Leadership

DevelopmentSchool leaders receive appropriate and timely professional development. Mentoring

or coaching programs are in place and effective.

SchoolLeadership Team

The school is utilizing its School Leadership Team to implement schoolimprovement.

Instructional

leadershipSchool leaders provide teachers with feedback and guidance that leads to improved

instructional practice and student achievement.

Findings:

School leadership of KIDCS has demonstrated limited capacity to deliver effectively the programproposed in the charter application. Specifically, the board has sought the external assistance of aconsultant to provide instructional guidance for staff. According to two former trustees (includingthe board treasurer), school leadership team has failed to produce timely and accurate financialinformation for consideration by the board of trustees. Three board members cited this failing ascontributing to their resignations. Further, the operations team has failed to managesystematically the bookkeeping, payroll, and benefits systems for staff.

KIDCS has established limited structures for soliciting feedback and issuing guidance leading toimproved instructional practice. According to board members, the vice chair of the boardconducted a programmatic audit of gaps between the school program and the programs proposedin the charter application; however, teachers were not interviewed as part of this audit. At thetime of the visit, KIDCS had not established individualized learning plans, as outlined in the

proposed charter application. Professional development was in the formative stages at the time of the visit. According to the

instructional team, curriculum alignment had been the priority in the weeks preceding the sitevisit. The team claims the alignment work has been extensive and includes each subject.However, the instructional leadership team also noted that staff had not received professionaldevelopment with respect to the philosophy of social constructivism and the establishment of alearning environment in which knowledge is constructed, or built, around the prior knowledge ofstudents and their interaction with the world around them. Teachers have not receivedprofessional development on cooperative learning, design-based learning, inquiry-based teaching,or project/problem-based learning.

SCHOOL CLIMATE

Environment is

conducive to

learning

The classroom and school environment is orderly, supports the goal of studentunderstanding and mastery of skills, and is consistent with the schools mission.Supervision is sufficient, respectful, and consistent.

Collaboration Administrators, teachers and staff communicate openly, positively and effectively.Professional learning communities are in place and affect improvement efforts.

Findings:


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8

At the time of the visit, the site visit team observed that engagement and discipline were recurringchallenges for several teachers. Students in several classes consistently demonstrated inattentionto lessons and engaged in distracting behaviors with other students. In two classrooms observed,students were observed roaming the rooms idle without direction provided from teachers. Moststudents seemed to be noisily engaged in their own chosen independent activities and manystudents were engaged in horseplay, using pencils as swords and play fighting, without re-

direction from teachers. Teachers identified the external instructional consultant as their current instructional leader. At

the time of the visit, the instructional leadership team (consultant, master teacher, social worker)noted that evaluations were forthcoming, though communications to staff about this process hadnot yet occurred. Several members of the schools faculty have recently organized to establish aunion to represent their interests. Some teachers noted that the process of organizing has led to alack of collaboration and communication among faculty and between certain faculty membersand the administration. Additionally, based on a review of written complaints previouslysubmitted to SED, along with interviews with both staff and administrators, it was unclear to thesite visit team to what extent staff at the school were aware of the operational challenges facingschool.

PARENT AND COMMUNITY INVOLVEMENT

Parent

involvementStrategies are being implemented to increase the involvement and contributions of

parents.

External/community

partners

Strategies are being implemented to increase the involvement and contributions ofcommunity partners.

Findings:

During interviews conducted on site, parents expressed strong support of the school. Theseparents, however, expressed limited knowledge of the manner in which the school had failed toimplement the instructional and fiscal plans outlined in the original charter application. It was

unclear to the site visit team the means by which parents were selected to participate in interviewswith SED staff. Parents affirmed the quality and commitment of the teachers. Some parents noted significant

academic improvement with their children. Parents were pleased with the handwork class, thepark ranger, and the holistic study of wood. Further, parents believed that the school offered arigorous educational opportunity for their child. Parents did not express significant concerns overthe changes in instructional leadership over the course of the year. Parents cited the CommunityCouncil as a mechanism for involvement in the governance of the school.

PROGRAM PLANNING AND EVALUATION

Organizational

needs

The school has realistic plans for program improvement, possible future expansion,

and adequate facilities based on evaluation and analysis of data, if applicable.Academic pr ogram

needs

The school evaluates the impact of its academic programs on student achievementand modifies its programs to ensure improvement.

Teacher

evaluations

Teacher evaluations linked to student performance have been put into place. Thesystem and data used must be consistent with State APPR system.)

Findings:


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9

KIDCS provided the site visit team with limited evidence that they had planned to meetorganizational needs or academic needs. At the time of the visit, preliminary achievement datawas still forthcoming; teachers had received limited professional development on the charter; and,the school failed to provide instruction using the curriculum outlined in the charter.

KIDCS sought to enter into a lease agreement with the firm Corlaton Realty beginning in 2010-2011 for a 23,000 sq. foot facility at 3120 Corlear Avenue. This space, as initially proposed in thecharter, was sufficient for the proposed school growth plan through Year 3. The board chair hascontinued to work with this developer and brought a term sheet before the board at the March2011 meeting proposing a new agreement for 2011-2012. The new agreement with CorlatonRealty proposed a modified financing agreement that would alleviate some fiscal strain onKIDCS. Corlaton Realty pledged to provide significant financing assistance to relocate theschool. According to the terms of the new agreement, KIDCS would borrow $609,000 at 6percent interest, payable at the end of the charter term in 2015. The School would also pay rent of$30 per square foot on a triple net lease for one year. Rent would increase to $33 per square footin 2012.

At the time of the visit, KIDCS had a plan to evaluate the academic performance of students.Staff indicated they were confident that the results would affirm the merits of the KIDCS

approach. Preliminary data had not yet been presented to the board of trustees at the time of thesite visit. Formal administrator and teacher evaluations have not been developed. The method for

evaluating teachers was to include classroom observations by the consultant, school socialworker, master teacher, and executive director.


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3. IS THE SCHOOL FISCALLY SOUND AND ORGANIZATIONALLY

VIABLE?

FINANCIAL MANAGEMENT

Solvency and

stability

The school develops budgets that are realistic and in support of student academicachievement.

The school demonstrates a history of positive net assets, adequate cash flow tosustain operations and support the academic program, and consistently operateswithin budget.

The school develops a budget that can be sustained by its enrollment.

Fiscal oversight The Board of Trustees and school leadership implement effective structures andsystems to enable responsible fiscal oversight of the school.

The Board of Trustees has an external company complete a yearly audit.The Board of Trustees demonstrates long-term fiscal oversight through appropriate

planning processes.Internal controls The school implements an effective system of internal controls over revenues,

expenses, and fixed assets, and exercises good business practices.

Findings:

KIDCS has provided the State Education Department limited evidence of fiscal soundness. Overthe past several months, KIDCS has experienced a number of cash flow issues, which are furtherdescribed in the Probation Order sent to the school on March 25, 2011. In addition, the board oftrustees and operations staff failed to provide consistent projections of cash flow through the endof the current fiscal year. The external consultants hired by the school a few days prior to the sitevisit were in the process of systematically reconstructing the schools books from the start ofschool operations in spring 2010 forward.

According to minutes of the trustees, from April through July 2010 new teachers were hiredaccording to job descriptions and pay rates exceeding the provisions of the charter. Whereas thecharter called for a lead teacher-assistant teacher model, the board shifted course and hired twolead teachers to establish a more costly collaborative teaching model in each of their sixclassrooms. Neither reviews of the minutes nor interviews with staff provided evidence offinancial contingency planning by the trustees to mitigate the impact of these new expenses.According to board minutes, a fall fundraiser planned at New York University was cancelled bythe Executive Director due to poor preparation and insufficient funds to pay for a freelance eventplanner at a cost of $80K. At the time of the visit, six KIDCS classrooms were staffed with twolead teachers in each room.

School budgets have not developed in a manner that was realistic and reflective of all revenues

and expenditures. In particular, KIDCS (at the suggestion of former board member EduardoLaguerre) contracted with the Blue Nail Construction Corp. The fee to remodel and equip the 295West 231st Street location was $800,000. This unanticipated fee significantly influenced thecapacity of the school to make timely payments for payroll and benefits throughout the year.

Rather, KIDCS trustees report that the decision to open the school in September 2010 was drivenby considerations of families impacted, staff hired, and the prohibitive difficulty of opening aftertaking a planning year.

10

Payroll taxes paid by the school are 282% higher than projected in the Year One charter budget.


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11

The School purchased a bus at a total cost (interest + principal) of $100,000 on a 60-month term,coinciding with the term of the charter. The monthly payments on this obligation are $1,575.

At the time of the visit, KIDCS fiscal oversight by the trustees was minimal. Based on ananalysis of resumes and questionnaires, the board of trustees, collectively, possessed littleexpertise and insufficient access to information for sound collaborative planning or decision-making.

The School has consistently faced difficulties with respect to sound fiscal management. Internalcontrols are not in place to ensure the sound management of revenues, expenses and fixed assets.

The board has aggressively sought a variety of financing solutions from developers, banks,foundations, and other sources. In particular, the Fund for the City of New York has providedthree separate loans to KIDCS to stabilize cash flows.

PARENT AND STUDENT SATISFACTION

Family satisfaction Through the use of parent and student (where appropriate)surveys, the schooldemonstrates that families are satisfied with the schools program

Student retention The school can document the numbers and reasons for student attrition.

Findings:

The site visit team did not review data related to these indicators.

LEADERSHIP AND GOVERNANCE

Board

Accountability

The Board of Trustee is responsible to the school community it serves.

Decision making

and

communication

The school has a clear understanding of decision-making and communication thatresult in a common sense of purpose for all school constituencies.

Roles andresponsibilities

The school defines and delineates clear roles and responsibilities among board andstaff.

Board oversight The Board of Trustees regularly and systematically assesses the performance ofschool administrators against school-wide goals and makes effective and timelyuse of the evaluations.

The Board of Trustees operates with a clear set of goals for the school, and hasdeveloped a set of tools for understanding progress toward meeting those goals.

Board development Board members receive appropriate and timely professional development.

Personnel The Board of Trustees employs leaders who demonstrate effective leadership of theschools programs.

The schools leadership establishes an appropriate professional climate, resulting in

a purposeful learning environment, reasonable rates of retention for effectiveschool leadership, staff, and teachers, and manageable levels of overall staffturnover.

Findings:

KIDCS provided limited evidence of board accountability. The board began Year 1 with threecommittees (Facilities, Finance and Operations; Hiring, Curriculum, and ProfessionalDevelopment; and Communications, Development and Grant Writing). The chairs of each of the


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12

committees resigned. Two were critical of board leadership and school staff for their disclosureof information.

The roles and responsibilities of board members are not clearly defined. At the time of the visit,the trustees did not have a secretary or treasurer, nor had committee chairs been replaced.

Board members have alleged in complaints to SED that KIDCS may have violated the Open

Meetings Law of New York State by improperly entering into Executive Session and by makingbinding decisions during those sessions, which should have been discussed before the public. Acomplaint by a board member, dated November 10, further alleges the board failed to adhere toits own procedures in appointing members; administering discipline to the instructional leader;and, in issuing policy to staff.

Two former board members allege a lack of financial transparency in the operations of the school.Both resignations were submitted in January 2011. At the time of the visit, KIDCS was operatingwithout a treasurer, without a CFO, and without a functioning Finance, Facilities and Operations(FFO) committee.

COMPLIANCE

Safety The school establishes and maintains a physically safe environment for students andstaff.

The school establishes a healthy environment ensuring civil rights for all.

Facilities The school provides facilities that meet applicable state and federal requirements,are suited to its programs, and are sufficient to serve diverse student needs.

Staff qualifications Staff employed by the school meets all applicable state and federal qualificationsand standards.

Implementation of

Strategies to

recruit, place, andretain qualified

staff

Activities are funded to recruit, place, and/or retain highly qualified staff.

Findings:

The site visit team did not make determinations in these areas during this site visit.


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Attachment C


29/47

~ i\\t~~ it~ of t~:e~ t...~'b1.1:cn on ~ t It t.e a[ i'leftr ~~ -D-l-ltIN THEMATTER PROBATION RDERANDNOTICE F INTENT OSEEKSUMMARY EVOCATION

of

KINGSBRIDGENNOVATIVEESIGN HARTERCHOOL

EducationLaw 2855provides hat he Board of Regentsmayplace a charterschoolon probationarystatus o allow he implementation f a remedialaction plan for, amongother reasons, erious violationsof lawand/ormaterialand substantial iolationsof the school'scharter, ncluding iscal mismanagement.Section3.16of the Rules of the Boardof Regentsdelegates his authority o the Commissioner f Education.Pursuant o that authority, find that the Kingsbridge nnovativeDesign Charter School ("School")should be placedon probationuntil at least May 17, 2011, n accordancewith the terms and conditions et orthin this decision, or serious violations of law and ~bterial and substantialviolations of the School's charter,

including iscal mismanagement. ~iIn addition, his ProbationOrder and Notice of Intent o Seek SummaryRevocationof the School'schartershall serve as the notice o the School'sBoar~ of Trustees equiredby 2855of the EducationLawand3.17(a)(1) f the Rules of the Boardof Regents. 1

BACKGROUNDThe Kingsbridge nnovativeDesignCharterf chool ("School")was authorizedby he Board of Regentson January 12, 2010. The Schoolwas scheduled o open n September2010 at 3120 CorlearAvenue n NewYork City's CommunitySchool District10 n the Bron. The Schoolproposeda dual eadershipmodel n which

the co-applicantswould be responsibleor operation~1nd instruction,espectively.

During he summer and fall of 2010, staff from the Office of InnovativeSchool Models n the StateEducationDepartment "Department"),ad several ri~etingSand conversationswith the ExecutiveDirectorandChair of the Board of Trusteesof the School as the School prepared o open for instructionon September7,2010. Issues related to the acquisition of approp ate facilities or the school, completing renovations ofacilities,obtaining he necessary ertificatesof occupancyor the facilities,and leasingor purchasing uses otransport students,amongotherswere discussedduring his ime. In fact, he school was not able to open orinstructionon September7, 2010 as plannedbecaype he necessarycertificationsor the facility had not yetbeen obtained. The School ultimately pened or ins~ructionn September17,2010 at 295 West 231st Street,Bronx.NY. ii


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During he fall of 2010, he Department egan receivingcomplaints rom a member of the School'sBoard of Trustees,membersof the School'sstaff,and parentsof studentsat the Schoolconcerning varietyofissues hat included,but were not imited o, allegedviolationsof Board of Trusteesprocedures,apsed benefitcontracts or School staff, nappropriate andlingof contributions o staff 401 K) accountsand allegations hatthe Schoolwould n01: e able o makepayroll.

In November2010,a Department taff membervisited he school o gather nformationpertaining othe ongoing iscal and operational ssuesdescribedabove as well as to evaluate he educational oundnessofthe School. Departrnent taff met with the principaland several eachers. Ongoing inancial problemsweredescribed during these meetings hat included an inability o purchase nstructionalmaterials necessary oimplement he instructional rogramdescribed n the Charter. Department taff made several requestsof theSchool during he fall of 2010and earlywinter of 2010-11 or information oncerning he status of employees'benefits contracts, he ability of the School o make payroll,and the status of hiring an instructional eader,amongother ssues.

On January 14, 2011, he AssistantCommissioner f the Office of InnovativeSchool Models n theDepartment ent a letter to the Chairmanof the School'sBoard of Trustees "Trustees"). The letter outlinedseveral concerns about he School based on the communications etween he School and the Department,visits to the Schooland informationand complaints eceived by the Departmentrom third parties. The letteroutlined responsesand information hat the Department equired he School o provide o the DepartmentbyJanuary 24, 2011. The response eceived rom the School was incompleteand raised additionalconcernsabout he fiscal and educational oundnessof he School.

On February 17, 2011, the Departmentsent another letter to the Trustees requestingadditionalinformation oncerning he School's iscal condition. That additional nformationwas required o be provided othe Departmentby February24, 2011. The requested nformationwas not provided o the Departmentby hedeadline of February 24, 2011. On February25, 2011,an email was sent to the Trustees ndicating hat noinformationhad been received by the Department,hat Department taff was planning o visit the school onMarch 9, 2011,and that he requested nformationmustbe provided o the Department o later han 8:00 a.m.on February28, 2011. Again, he response eceived rom the Trusteeswas incomplete nd continued o raiseadditional oncernsabout he fiscal and educational oundnessof the School.

On March 9, 2011, Department taff conducteda site visit to the School o assess the fiscal andeducational oundnessof the school,collectdata pertaining o the formal nformation equestsof January 14,2011 and February 17, 2011, and to meet with the Trustees,school staff, teachers, parents,and externalconsultantsworking Nith he school's eadership. The site visit included nterviewswith these stakeholders,document eview,classroomobservations, nd attendanceat a regularlyscheduledmeeting of the School'sBoard of Trustees.

VIOLATIONS1. Section 5.1 of the School's charter agreement with the Board of Regents provides that, "(t)heCharter School shall at all times maintain appropriate managementand financial controls."

The Department's eview ndicates hat here are a lack of basic inancialsystemsand controls at theSchooland seriousdeficiencies n the documentation f expenditures. This situation s fiscallyunsoundand amaterialand substantial iolation of the School'scharter. A school's inancialsoundness s fundamental o itsability to operate an educational program. To maintain his soundness, inancial policies, practices andproceduresmust be implementedand followed o ensure success. Examplesof fiscal unsoundness,iscalmismanagementnd that he School s in violationof this provisionof the charter ncludes:

2


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The School does not have a fiscal system in place that includes an appropriate system ofbookkeeping nd inancial ecordsmanagement.The School s fiscallyunstable.The School ncurred significant, nbudgeted xpenses o secure andbuild-out hl3school'scurrent emporary acility at 295 West 231st Street,Bronx,NY, withoutobtainingfinancing o ensure adequatecash flow for ongoing operations,which are heavily dependentuponshort-term oan support from third parties borrowed against uture per-pupil tuition revenue. TheSchoolhas ailed o make consistent nd p(operpaymentsof payroll axes, nsurance, nd benefits orstaff. In January2011,directpayrolldeposits or several staffmemberswere reversedby he School'spayroll agent due to insufficient unds. The School has routinely ncurredsubstantial ees for latepaymentsand/or ailure o maintainsufficient unds o cover payments.To date,aft,er everalspecific equestsby he Department,he Schoolhas been unable o provide heDepartmentwith a sound iscal plan that ncludesprojectionson how build-outcosts or the school'scurrent acilitywill be coveredunder current iscal projections.The School has not establishedan escrowaccount or dissolutionas required by 8.5 of the charteragreement.The School has not obtained tax-exemptstatus from the IRS, as required by 2853(1 (a) of theEducationLawand 5.11 of the charter agreement, ecauseof its delay n submitting he applicationto the IRS.2. Section 2.12 01' he charter and Section 2853(1)(f)of the Education Law state that the Board ofTrustees of the! charter school "shall have final authority for policy and operational decisions ofthe school."

There have been several resignations rom the Board of Trusteessince the summer of 2010, causingconcern to the Departmentabout the instabilityon the Board and the impact that had on the effectivemanagement nd operationof the School. In October 2010, he memberof the Board of Trusteeswho hadcontacted he Depalimentwith complaints about alleged violations of the Board of Trustees procedures,resigned rom the Board. In January 2011, a memberof the School's Board of Trustees esigned rom theBoard,and in his resignation mail o the BoardChaircited concerns hat he, as a memberof the Board,hadbeen given misinformation nd was excluded rom decisionsabout budgetmatters. Appointmentso fill somevacancieson the Bo,ardof Trusteeshave been made n violation of 2.12 of the charter agreementwhichrequires he submissionof informationabouta prospectiveBoardmember o the Department nd approvalbythe Department rior to the Board memberbeing seated. In March 2011 another member of the Board ofTrustees nformed hl~Chair of the Board hat he would not be seekingan additional erm on the Board.3. Section 2.4 of 'the charter agreement provides that, "(t)he Charter School shall implement theeducational prograrns set forth in the Application "

Examples hat the School s not operating p an educationally ound mannerand in violation of thisprovisionof the Charter nclude: jThe School has been operatingwithoutan instructionaleadersince January 4, 2011 when heschool'~i econdprincipalwas ired. At that ime, he school ransitionedeadershipand oversightof the alcademic rogram o an externalconsultant.This high urnover threeacademic eaders nthe school's irst five monthsof operations) aises concernsabout he Board of Trustees'abilityto effecjlivelyead he school.The School does not employ nstructional oaches and classroomsare not staffed using theteachingmodeldescribed n the Application.Curriculum nd nstructionalmaterialsas described n the Applicationhave not been purchased.

3


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1. Docume~talY vidence hat the School s currenton ALL payroll-related xpenses, ncluding salary,benefits, nsurance,axes,and 401(K)contributions romised o employees;2. A month-~o-mont~ash-flowstatement hrough he end of FY 2012 that indicatespositive cash-flow,and specific detailsabout!!! loans (shortor long term), draw-down, nd payoffs hat occur during histime period;3. A balanced five-year budget for remainder of the charter term, including a detailed table ofassumption~;nd line-item budgetnarrative o clarifyall revenues nd expenses,with specific detailson personnlel, ontracts, that are related to implementationof the key elements of the chartereducationaldesign,as well as build-out osts;4. Documentary videnceof securedand executed oan agreements r other arrangemento payoffbuildout costs for Year 1 and Year 2 and through completion, he debt service payments of which aresustainablewithin he School'soperatingbudget;5. A schedule for elocationof the School o 3120CorlearAvenue, nclusiveof outstanding tems or thebuild out and a narrativeexplainingpotentialchallenges;6. A copy of interim and final bookkeeping eports o the Board of Trustees as prepared by the firm ofRios and McGarrigle, LC.;7. Actual balanlce heet and income statementas of March 31, 2011 and projectedbalance sheet andincomestatE~mentt June 30, 2011 and June 30, 2012;8. A managemlentnd staffingplan o ensureadherence o fiscal policiesand procedures doptedby heBoard of '-rustees, including bookkeeping, iscal records management, procurement, payrollmanagement,inancial eporting o the Boardof Trustees, nd he adequate eparationof duties;9. A signed ull audit engagementetter or FY11;10. Documentary vidence hat plans are in place or all key elementsof charterdesign o be in place orSept1, 2011, ncluding urriculardesign, taffingdesign,schedule,nstructionalmodel;11. Formal charter revision requestssubmitted o the Board of Regentsseeking approval o modify hedaily schedLlle nd school calendarand any other materialor non-material evisions o the School'scharter;12. The methodology sed n conducting he search or a new nstructionaleader and chief iscal officer,and criteriaapplied o selection,ncluding he ob description;13. A list indicatingwhetheror not currentstudents ntend o return o the School n Fall 2011, by gradeand CSD of residence;14. A list of students ndicating ull enrollment ?25) or the 2011-12school-year,ncludingany waitlistedstudents,by gradeand CSD of residence;15. Documentary vidence hat!!! parents of studentsat the Schoolhave been nformedof this remedialaction plan and the probationstatus of the School n two formats:written communication ent home

4


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(on or beforeMarch30, 2011)and at leastone parentmeetingheld at the schoolon or beforeApril 15,2011 (with at least one week's notice provided). The School should make arrangementso providetranslations o parents and/or guardians or whom a language other than English is the primarymethodof communication; nd16. A plan or establishing nd undingan escrowaccount or dissolution.

INTENTTO SEEK SUMMARYREVOCATIONThe success or failure of the School rests ultimatelywith its Board of Trustees. It is the Board's

policies, oversight of their implementation, nd leadership hat will set the course for the remainderof theSchool's harter erm.The period provided or implementinghe remedialaction plan shall also constitute he School's30-

day period under 3.17(2)of the Rules of the Board of Regents o remedy he problemsassociatedwith theproposed evocation" f the Schoolhas ailed o implement ny of the above requirementso the Department'ssatisfactionby April 29, 2011, he Departmentwill pursue summary evocationof the School'scharter by theBoard of Regentspulrsuanto 2855(3)of the EducationLaw at the May 16-17,2011 meetingof the Board ofRegents, ffectiveJune 30, 2011. After reviewof materials ubmittedby he School, he Departmentwill notifythe School of its decision egarding he intent o continue o pursue evocationof the School'sCharter by May3, 2011.

Pursuant o 3.17(a)(2) f the Rulesof the Boardof Regents,he Schoolhas he opportunityo submita written response o this notice of intent o revoke,which presents he School'sposition. The responsemayinclude supporting affidavits, exhibits and other documentaryevidence (including any evidence that theproblems at issue have been corrected),and may present egal argument. Any written response hat theSchool maychoose o submit must be receivedby the Department o later han 5:00 p.m. on May 6, 2011, atthe Office of Counsel,Education Building,Room 148EB,Albany, New York 12234. By the same time theSchool must also inform the Department,n writing, f it plans to request he opportunity or oral argumentpursuant o 3.17(a)(3) f the Rulesof the Boardof Regents. A failure o submita timely esponsewill result nthe Board of Regentsdecidingwhether o revoke he School's harter withoutbenefitof input rom he School.

Any oral argument hat he School may chose o requestshall take place on May 16 or 17, 2011 atthe State EducationDepartment, lbany,NewYork. The dates of the oral argument nd/orconsideration f therevocation application by the Board of Regents are subject to change without further Order of theCommissioner, nd he Schoolwill be providedwith writtennotice by he Department f anychanges.

The School has the option of voluntarily eeking an order form the Board of Regents revoking heSchool'scharter and certificate of incorporation, nd dissolving he corporation pursuant o Education Law219(3}. I!


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Attachment D


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THE STATE EDUCATION DEPARTMENT / THE UNIVERSITY OF THE STATE OF NEW YORK

CHARTER SCHOOL OFFICEROOM 471 EBA, 89 WASHINGTON AVENUE, ALBANY NY, 12234Tel. 518/474-1762; Fax 518/474-3209; [email protected]

Page 1 of 10

May 3, 2011 Summary of Kingsbridge Innovation Design Charter Schools

Implementation of the Remedial Action Plan set forth in the March 24, 2011 Probation Order andNotice of Intent to Seek Summary Revocation of the Schools Charter,

due to NYSED by 5:00 p.m. on April 29, 2011

Note: All items were submitted via electronic mail to and reviewed by NYSED Charter School Officestaff members Cliff Chuang and/or Jamal Young.

1. Documentary evidence that the School is current on ALL payroll-related expenses, includingsalary, benefits, insurance, taxes, and 401(K) contributions promised to employees;

Over the course of the day on Friday, April 29, 2011, the School submitted a series of separate emailscontaining documents in response to this item. After a follow-up phone call on Saturday, April 30,

2011, board treasurer Ed Montolio sent via email on Sunday, May 1, 2011 at 9:52 p.m., a summaryspreadsheet providing additional detail regarding 401K and other payroll-related expense payments.Though the School submitted screenshots and copies of statements that demonstrated that wiretransfers and other financial transactions were completed or pending on Friday, April 29, 2011, due tothe piecemeal nature of the submissions, it was difficult to determine whether or not this remedialaction was successfully completed.

The School submitted copies of electronic contribution details confirmations from John HancockNew York, their 401K provider, and Department staff were reasonably able to determine that back401K payments from February through April 2011 have been made. However, at least one formeremployee requested that any prior contributions deducted from her paycheck be sent directly to herrather than deposited into her 401K account. As of Saturday, April 30, 2011, she had not yet received

funds due to her.Remedial Action Item Sufficiently Addressed? No.

2. A month-to-month cash-flow statement through the end of FY 2012 that indicates positive cash-flow, and specific details about allloans (short or long term), draw-down, and payoffs that

occur during this time period;

As of 5:00 p.m., April 29, 2011, the School provided month-to-month cash-flow statements (i.e.,projections) for Year 2 of the Schools charter term (2011-12), but did not include any detail aboutcash-flow between April 29, 2011 and June 30, 2011. Evidence from this two-month cash-flow timeperiod is critical for demonstrating that the school be financially viable through the end of the 2010-

11 school year.After a follow-up phone call made by Cliff Chuang to John Torres, the Schools board chair, onFriday evening, April 29, 2011, shortly after 5:00 p.m., the School submitted a separate Year 1 (2010-11) cash-flow statement at 6:46 p.m. via email. However, this cash-flow did not provide specificdetails about all loans, draw-down, and payoffs. After an additional follow-up phone calls made byCliff Chuang to John Torres, and then Ed Montolio, the Schools board treasurer, on the morning ofSaturday, April 30, 2011, the School submitted a spreadsheet (email from Ed Montolio at 9:52 p.m.on Sunday, May 1, 2011) which contained a month-by-month Year 1 cash-flow statement, a summaryof weekly sources and uses between April 22, 2011 and June 30, 2011 and Liquidity-Model detail,


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along with a revised loan schedule. This spreadsheet contained information that differed substantiallyfrom the one sent on Friday evening. A key revenue source identified in the second Year 1 cash-flowstatement (but omitted in the original submission) is a $200,000 bridge loan to be funded during theweek of May 6, 2011 in order for the school to be able to satisfy its obligations for that week andbeyond. Mr. Montolio notes in his 9:52 p.m. May 1, 2011 email that:

Additionally, we received an oral commitment from our Food Vendor, Fozan Pirzada of

Regina Catering, to provide a bridge loan of $200K until we received the funds from CorlatonRealty. Per the term sheet, the Corlaton funds would be coming in mid June. As such,entering into a bridge facility makes financial sense. Unfortunately, their rate of interest ishigher than most at 20% but we are hoping to knock that down a bit. The vendor has givenJulio and John a verbal commitment because of his obvious vested interest in keeping KIDS

viable.

However, it should be noted that 5-year budget narrative provided in the response to Item 3 indicatesthat the school would be shifting to using NYCDOE food service for Year 2 and beyond. As of 9 p.m.on Monday, May 2, 2011, the School had not yet been unable to confirm in writing that it had securedthis loan. Neither version of the Year 1 cash-flow statements budgets for possible end-of-yearreconciliation loss of revenue based on reduction of enrollment FTE in the last 2 months of school as

well as a correction of $16,624 related to over-projection of special education students at the 20%-60% service level (see Item 3). In addition, it does not appear that moving expenses for relocation(from the current school building to the building initially identified in the charter application, for fall2011) are included in any cash-flow statement.

The Excel spreadsheet submitted by the School for Year 2 contained a number of calculation errors.The School failed to include cell-to-cell formulas to ensure data integrity.

Remedial Action Item Sufficiently Addressed? No.

3. A balanced five-year budget for remainder of the charter term, including a detailed table ofassumptions and line-item budget narrative to clarify all revenues and expenses, with specific

details on personnel, contracts, that are related to implementation of the key elements of thecharter educational design, as well as build-out costs;

The School submitted a five-year budget spreadsheet, which included a high-level 5-year budgetprojection with assumptions, a lending schedule, a staffing plan, along with three-page fiscal plannarrative. The 5-year budget as presented provides for balanced surplus budgets in Years 1, 3, and 4of the charter term, and deficit budgets in Year 2 and 5, with a projected ending cash balance of$86,847 and $427,954 at the end of Years 2 and 5, respectively.

The School bases regular tuition revenue on 95% of approved enrollment (based on the SchoolsApril 1, 2011 bimonthly invoice, the School is at 94.2% of approved enrollment this year). However,starting in Year 2, the School also budgets for significant revenues (more than 7%) based on theenrollment of students with special needs who require significant service levels. The School utilizesthe following assumptions: NY State Ed funding for Integrated Setting (60%) is $19,000. For example, in Year 2, the School projects enrolling28 special education students in 2011-12, 8 at the 60% service level: 8 *$4,789 + 18 *$10,000 + 1*19,000 = $237,312 (an exampleof calculation error described in item 2 above). However, NYSED does not provide any direct specialeducation funding to charter scho