ALJDEC decisions subject to certification as final
18F-RV-001-BCS · State Board for Charter Schools · 2018-02-26
IN THE OFFICE OF ADMINISTRATIVE HEARINGS
Notice of Hearing on Breach of Consent Agreement and Revocation of Charter
Life Skills Center of Arizona, Inc.
No. 18F-RV-001-BCS
ADMINISTRATIVE LAW JUDGE DECISION
HEARING: January 19, 2018 with the record held open until February 5, 2018
APPEARANCES: The Arizona State Board for Charter Schools was represented by Assistant Attorney General Kim Anderson. Robert Fox and D/Andrea Chapman appeared on behalf of Life Skills Center of Arizona, Inc.
ADMINISTRATIVE LAW JUDGE: Tammy L. Eigenheer
_____________________________________________________________________
FINDINGS OF FACT
The Arizona State Board for Charter Schools (Board) is authorized to execute charter contracts for the purpose of establishing charter schools in Arizona.
Life Skills Center of Arizona, Inc. (Life Skills) operates Life Skills Center of Arizona (School) pursuant to a renewal charter contract (Charter) executed on June 20, 2017, between Life Skills and the Board.
Pursuant to A.R.S. § 15-183 and the Charter, the Board sponsors Life Skills to operate one school site to serve students in grades 9 through 12.
A.R.S. § 15-183(E)(6) and A.R.S. § 15-914 require that Life Skills undergoes an annual financial and compliance audit, including the completion of a legal compliance questionnaire, by an independent certified public accountant (annual audit).
Life Skills’ annual audit for each fiscal year is due to the Board by November 15 of the following fiscal year.
Life Skills failed to timely submit its annual audit for the fiscal year ending June 30, 2013, and therefore, Life Skills was not in compliance with state law or with its charter.
Life Skills failed to timely submit its annual audit for the fiscal year ending June 30, 2014, and therefore, Life Skills was not in compliance with state law or with its charter.
Life Skills breached its charter and A.R.S. § 15-183(E)(6) and A.R.S. § 15-914 when it failed to timely submit its annual audit for fiscal years 2013 and 2014.
At its public meeting held on November 21, 2014, the Board passed a motion to submit a request to the Department to withhold ten percent of the monthly apportionment of state aid that would otherwise be due Life Skills and to issue a notice of intent to revoke Life Skills’ charter.
Rather than proceeding with the charter revocation proceeding, the Board and Life Skills entered into a Consent Agreement.
In the Consent Agreement, Life Skills agreed to submit its annual audit for the fiscal year ending June 30, 2015, by November 15, 2015. Life Skills further agreed to submit its annual audit for subsequent fiscal years by November 15 of the following fiscal year.
In the Consent Agreement, Life Skills agreed that if it failed to comply with the terms and conditions of the Consent Agreement, the Board may, on no less than thirty calendar days’ notice, hold a hearing at which time the Board will receive information to determine whether evidence exists that Life Skills failed to comply with the terms and conditions of the Consent Agreement.
In the Consent Agreement, Life Skills agreed that in the event that the Board determined that a breach of the Consent Agreement had occurred, the Board may revoke Life Skills’ charter to operate the School and terminate its charter for breach of the Consent Agreement and the laws identified therein.
Life Skills’ annual audit for the fiscal year ending June 30, 2017, was due to the Board by November 15, 2017.
At its public meeting held on November 21, 2017, the Board determined that Life Skills failed to timely submit its annual audit for the fiscal year ending June 30, 2017. The Board passed a motion that under the terms of the Consent Agreement a hearing should be held to determine whether evidence existed that Life Skills failed to comply with the terms and conditions of the Consent Agreement.
The Board further passed a motion to submit a request to the Department to withhold ten percent of the monthly apportionment of state aid that would otherwise be due Life Skills until a complete fiscal year 2017 annual audit was submitted to the Board.
On November 29, 2017, the Board received Life Skills’ audit package.
At the January 16, 2018, Board meeting, the Board considered Life Skills’ request for reconsideration. No one from Life Skills appeared at the Board meeting to speak regarding request for reconsideration. Ultimately, the Board denied the request to reconsider.
At hearing Robert Fox and D’Andrea Chapman testified that the School was working to put into place procedures that would prevent a delayed submission of the annual audit in any future years. Mr. Fox and Ms. Chapman denied realizing the severity of the past issues with the Board. Ms. Chapman also stated that they were unaware they could have attended the Board meetings to present an argument as to why the Charter should not be revoked.
CONCLUSIONS OF LAW
In this proceeding, the Board bears the burden to prove, by a preponderance of the evidence, that grounds exist to revoke the School’s Charter and that revocation is an appropriate remedy. See A.R.S. § 41-1092.07(G)(2); A.R.S. § 15-183(I)(3); and A.A.C. R2-19-119.
A preponderance of the evidence is “such proof as convinces the trier of fact that the contention is more probably true than not.” Morris K. Udall, Arizona Law of Evidence § 5 (1960). “It is evidence which is of greater weight or more convincing than the evidence which is offered in opposition to it; that is, evidence which as a whole shows that the fact sought to be proved is more probable than not.” Black’s Law Dictionary 1182 (6th ed. 1990).
A sponsor may revoke a charter at any time if the charter school breaches one or more provisions of its charter. A.R.S. § 15-183(I)(3)(c).
The Charter provides that the Board may revoke the Charter “for any material breach of the Charter and/or violation of state, federal or local laws, ordinances or rules or regulations . . . .”
The Consent Agreement also provided that if Life Skills failed to comply with the terms and conditions of the Consent Agreement, the Board may revoke the Charter to operate the School.
Life Skills breached the Charter, the Consent Agreement, and the provisions of A.R.S. § 15-183(E)(6) and A.R.S. § 15-914 when it failed to timely submit the annual audit for the fiscal year ending June 30, 2017.
The evidence of record established that the Board has the authority, pursuant to A.R.S. § 15-183(I)(3)(c), to revoke the Charter Contract for the Charter Operator’s breaches of the Charter Contract and the Consent Agreement.
RECOMMENDED ORDER
In view of the foregoing, it is recommended that the Board revoke the Charter with Life Skills to operate the School on the effective date of the Order entered in this matter.
In the event of certification of the Administrative Law Judge Decision by the Director of the Office of Administrative Hearings, the effective date of the Order shall be five days from the date of the certification.
Done this day, February 26, 2018
/s/ Tammy L. Eigenheer
Administrative Law Judge
Transmitted electronically to:
Ashley Berg, Executive Director
State Board for Charter Schools