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Kristin Murphy, KSL

AISU could face repaying more than $415,000 in special education funds

By Marjorie Cortez, KSL | Posted - Jun 6th, 2019 @ 7:01am



SALT LAKE CITY — Utah State Board of Education staff have recommended that the elected board largely reject American International School of Utah's appeal of findings that the public charter school inappropriately spent more than $500,000 in federal and state special education funds.

State special education officials say the documentation submitted by the school "is not sufficient to substantiate that the costs in question are allowable expenditures" for federal education funds.

However, special education staff determined that $99,216.71 in state special education costs were valid. But for the remainder of the state costs, documentation provided by AISU "is not sufficient to substantiate that the costs in question are allowable expenditures," State School Board documents state.

The school has asked the State School Board to forgive $360,000 of costs.

The board is scheduled to act on the public charter school's appeal on Thursday.

The State School Board staff's review of special education expenditures focused on the 2016, 2017 and 2018 fiscal years.

Neither AISU nor state education officials responded to requests for comment Wednesday.

If the state board rejects AISU's appeal, the school will have until June 26 to repay $415,689 in state and federal special education funding, plus interest on the federal funds, although it is unclear how the school would repay the costs.

AISU's last day of classes is Friday after its governing board voted last month to close the school no later than Aug. 15. The decision stemmed from growing concerns about the school's financial viability, the likelihood of further state scrutiny of its operations and the possibility of additional liabilities.

Current board members and school officers blame much of the school's current financial and record-keeping problems on previous operators. The school had operated at a deficit for a number of years but was in the midst of a course correction this academic year, said Tasi Young, AISU's executive director, in a previous interview.

The school closure will displace some 1,300 students and 170 full- and part-time employees.

State School Board documents note problems with AISU's record keeping, such as unsigned contracts for teachers and a social worker and documentation submitted for educators whose contracts not in the years in question.

In one instance, a teacher was not properly licensed to provide special education services.

In the case of one social worker, she served both general education and special education students.

"There is not sufficient documentation to warrant charging her entire contract to special education funds as the evidence provided does not indicate the portion of time spent serving special education students," a State School Board staff analysis states.

AISU appealed the State School Board staff's review of special education expenditures.

During the 2016 fiscal year, it appears, according to state documents, that AISU incorrectly allocated more than $157,200 of federal special education funds to pay for "unallowable health insurance premiums and salaries and benefits of teachers."

A review of account records and supporting documents such as invoices, teacher contracts, schedules, payroll time cards and personnel activity reports did not contain sufficient information to support the allocation of these expenses to the Individuals with Disabilities Education Act special education fund, a letter to the school states.

The review also found that in the 2017 fiscal year "it appears that American International School of Utah has incorrectly allocated $154,197.44 of state special education funds to pay for unsupported salaries and benefits of school administrators, teachers, social workers and health insurance premiums."

AISU is described on its website as a "public-private hybrid STEAM international charter school in Murray, Utah." It has had a partnership with Realms of Inquiry, a private school also located at 4998 S. Galleria Drive, the site of the former Galleria Mall.

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