The Gloucester Community Arts Charter School’s post-shutdown asset sale — the trustees’ last ditch effort to recoup some $154,000 in debt after the school’s sudden January closure — brought in only about a third of the money owed, according to a state audit released earlier this week.
But the school’s abrupt closure, after the state cut off funding and a local bank retracted its tentative loan agreement, likely saved the charter school from at least doubling its debt last spring, according to State Auditor Suzanne Bump’s 33-page report on the school.
According to Bump’s report, the $50,000 that trustees reeled in during the multi-day sale of everything from computers to kick balls, paled in comparison to the additional $5.8 million in outstanding “facility lease obligations” not even included in the net asset deficit.
Though the state would typically seize all of a school’s remaining physical assets post closure, the Department of Elementary and Secondary Education had allowed the charter to sell off its assets to recoup some of the money.
Had the charter trustees managed to sell all of the items at “buy it now” prices once listed on a special sale website, the school could have collected over $100,000. The school’s trustees had offered up an assortment of objects including desks, musical instruments, exercise equipment and some electronics.
The audit also includes submissions from the chairman of the charter school’s trustees, James Caviston. In a response, Caviston addresses the audit’s criticisms, including excessive rent paid for the use of the building under what the auditor decried as a non-bid contract, and inflated enrollment numbers that, throughout the school’s 21/2-year run, fell consistently lower than projected.
He also outlined steps the trustees have taken since the closure — such as designating the Gloucester Public School District as the “trustee” responsible for future maintenance of charter school records and turning the records over to the district. The trustees are also documenting remaining financial obligations through a formal claim-filing process, and are working with the state’s education department to examine the charter school’s compliance with federal grant funding requirements.