Audit of school operator sought

4/20/2006

A state senator who has been fiercely critical of Ohio's charter school system said she will demand today for the second time that the state auditor increase scrutiny of the state's largest charter school management company and the Toledo agency that sponsors many of the firm's schools.

Sen. Teresa Fedor (D., Toledo) wants Auditor Betty Montgomery to initiate a special and far-reaching audit of White Hat Management, which operates 34 schools, including Life Skills Center of Toledo.

She also wants a detailed look into the finances of the Ohio Council of Community Schools of Toledo, which sponsors 18 White Hat schools.

"The White Hat audit is critical for taxpayers on how they are spending their money," Ms. Fedor said yesterday.

The senator said an April 5 ruling by the Ohio Supreme Court that Summit County's Oriana House - a publicly funded, private correctional facility, and an affiliated for-profit company, must open their books to the auditor's office, gives Ms. Montgomery the same authority with White Hat and the council of community schools.

A White Hat spokesman and the attorney for the council of community schools disagreed with the senator and maintain their books are not open for public scrutiny.

Tom Needles, White Hat spokesman and lobbyist, said the company complies with audits required of its schools.

"There are countless numbers of privately held companies that perform services on behalf of the state of Ohio and to suggest that everyone of these companies is required, or should be required, to open up their books because they receive state tax dollars is a faulty proposition," he said.

Similarly, Mark Abramson, attorney for the council of community schools, said that agency is not a public entity.

"While we maintain certain public records the council itself is not," he said.

Ms. Montgomery wrote a letter yesterday to House Speaker Jon Husted (R., Kettering) seeking clarification on the issue.

Jennifer Detwiler, spokesman for Ms. Montgomery, said management companies that receive more than 20 percent of a school's annual gross revenues are required to provide a detailed accounting.

"What we aren't clear about is if we have the ability to audit, in its entirety, a private [charter] school management company," Ms. Detwiler said. "We have heard a lot of people complaining about the amount of money that is going to White Hat. We've not received any specific allegations that public dollars are in any way being misappropriated."

White Hat received $109 million in tax dollars last year. Mr. Needles refused to discuss how much is profit. But an analysis by The Columbus Dispatch last month of state audits for 17 White Hat schools found the firm made $15.4 million in combined profits and management fees last year.

Senator Fedor said she is suspicious of how Allison Perz, who is executive director of the council of community schools, attained her position and if her mother, Sally Perz, has a conflict of interest.

Sally Perz, a former Republican state lawmaker, helped create Ohio's charter schools laws and then helped form the school council her daughter now runs.

Allison Perz was out-of-town last night and could not be reached for comment.

She is paid $85,000 annually, receives a $4,800 annual car allowance, and was given a $26,000 bonus in October, 2004.

After The Blade first reported Allison Perz's income in July, 2005, Mr. Abramson responded with an e-mail explaining the bonus, which he said reflected services rendered in 2003 and 2004. "During the first several months of 2003, Ms. Perz worked without compensation from the council," he wrote.

Sally Perz now works for her daughter as a regional representative, monitoring some of charter schools sponsored by the council of community schools.

She was registered last year with the Joint Legislative Ethics Committee as a lobbyist for the council of community schools, White Hat, and several other management firms.

The elder Ms. Perz is no longer registered as a lobbyist for any company other than her own, The Capital Link Inc.

Contact Ignazio Messina at:

imessina@theblade.com

or 419-724-6171.