Costly problems persist after charter school closure

Costly problems persist after charter school closure

KALIHI, OAHU (HawaiiNewsNow) - Nearly a month after shutting down a Kalihi charter school, the state is still trying to sort out the mess left behind. From huge debts to incomplete records, major problems persist even after Halau Lokahi's closure on May 29.

After 14 years of educating students, Halau Lokahi became the first charter school in Hawaii to be shut down by the state.

"It was a painful lesson to have so early on in the life our new charter school system," said Tom Hutton, executive director of the Hawaii State Public Charter School Commission.

The commission was created in 2012 to focus on accountability and safeguards. The staff notified the Attorney General's office about questionable spending by Halau Lokahi totaling more than $100,000. Authorities arrested three former employees, including the school's founder, for theft and money laundering. They have not been charged.

"For a new commission that's navigating the very delicate politics of dealing with schools that never had that kind of oversight before, we've tried not to exercise too heavy a hand. In hindsight, maybe we should have been a little more aggressive in doing that," said Hutton.

In Hawaii, charter schools are considered state agencies. Now the commission is trying to figure out exactly how much money creditors are owed.

"We have to sort out some issues about what things maybe the state is liable for and what things maybe not, but at least on paper what people are saying is it's somewhere between $200,000 to $400,000," said Hutton.

The commission sold off assets such as furniture, collecting roughly $6,000 to help pay some of the bills. The agency may have to ask state lawmakers for money to deal with Halau Lokahi's remaining debts. Legislators just made changes to speed up the process to shut down a school facing severe financial problems. Under the revised law, a school that can't afford to pay its staff will lose its charter without going through six months of due process.

"There's going to be more periodic oversight and reviews and a bit more accountability on all the charter schools as to how they report their expenditures and so on," explained State Rep. Roy Takumi, chair of the House Committee on Education.

The state is also struggling to sort through Halau Lokahi's incomplete records, including some student files.

"There were records that were pretty disorganized, and that wasn't just on the student end, that was financial records, that was personnel records," said Hutton.

The commission wants to work closely with the state's 33 charter schools to make sure these types of problems don't happen again.

"In a way, although there's hard lessons, it's a sign the system is working," said Hutton. "In a case where a school is failing, it can be closed. That's the deal. That's part of what you do in chartering, and that was not the reality in Hawaii for a long time. It is the reality now."

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