Tag Archives: Fiscal Responsibility

Financial fraud in WPSD

In August of 2023, the WPSD cut a check to Merit Academy for $270,155 in money from the ESSER III grant the district received from the federal government (this was COVID relief funds). I believe this meets the definition of fraud, as I’ll outline below.

The WPSD budget for the 2022-2023 school year (fiscal year 23, or FY23) – allocated all ESSER money to be spent on the five ‘traditional’ public schools. None was allocated to go to Merit Academy.

Merit FY23 budget didn’t include any ESSER grant money (in fact, there’s only $15,273 in federal money listed)

Money moving from the WPSD to Merit Academy is documented in a monthly ‘flowthrough’ spreadsheet – these monthly spreadsheets never showed any ESSER grant money.

On 1/31/23, Merit headmaster Gwynn Pekron reached out to Del Garrick requesting ESSER grant money; she was told that all money had been allocated for FY23, and that Merit could request money in FY24 if they wished (click here to read the email exchange).

In early June, Merit Academy again reached out to the WPSD about ESSER grant money, requesting money from FY24 (as previously suggested by Del). However, the FY24 budget passed by the board on June 14th showed $858,241 in ESSER grant money, none of which was allocated to go to Merit Academy.

On June 30th, 2023, Merit Academy submitted an invoice to the WPSD requesting $270,155 in ESSER grant money. That invoice was processed and paid in August 2023 (presumably, the delay was due to the district being closed for summer break).

As Merit had not budgeted to receive any ESSER money, they created multiple ledger entries on 6/30/2023 to retroactively justify the expense of the ESSER grant money (click here).

One consequence of this process was that the WPSD started the year with an inflated grant balance, that caught up to the district in January. In January of 2024, middle school parents received an email that an after school academic assistance program was being cut immediately; we were told it was due to a lack of funds to continue the program (funds were quickly reallocated to continue this program). Data obtained from a CORA request showed the ESSER grant fund was already grossly overdrawn, and the budget for that had been slashed from the original $858,241, to now only $523,524 (that difference, $334,717, is greater than the $270,155 that went to Merit in August and is as yet unexplained).

When I asked the board of education about this, director Kimbrell told me, “We were required to include Merit in the allocation of ESSER funds but the prior staff did not include them in the FY22-23 budget even though it was against the law not to.” The CDE’s website does not support the claim that it’s against the law not to include Merit (scroll to the bottom of that link).

So in summary, the board never approved any ESSER grant money to go to Merit Academy, in either year. This substantial sum of money was allocated to be spent on the other schools. Instead of going through the proper channels of including this in a budget (which then allows the public to be aware of how this money is being spent), the district operated outside of board overview and negotiated this directly with Merit Academy. The board approved a budget for FY24 which had inaccurate fund balances as a result. The WPSD deceived the public about where this money was being spent, by not only never including it in any budget, but purposefully publishing a FY24 budget that showed money to be spent in the district that didn’t actually exist (I believe this can best be described as fraud).

There’s another side to this that warrants further investigation. Merit Academy started life as a contract school under ERBOCES, NOT the Woodland Park School District. ERBOCES awarded some ESSER grant money to Merit Academy for the previous fiscal year, FY22 (this is the $10,845.60 number you see in the general ledger screenshot linked above). The question I have is, how did the state and federal governments determine the amount of ESSER grant money to award to the WPSD? If they based this calculation on the number of pupils in the district, it’s clear that Merit Academy was not part of the district at the time of ESSER grant money calculation…did ERBOCES receive extra ESSER grant money that should have been transferred to WPSD when Merit Academy was absorbed into the district in the 2022-2023 school year?

WP cuts middle school after school academic assistance program

The Woodland Park school board found the money to give superintendent Ken Witt a $15k raise (plus 5% annual raise and up to 15% bonus), and found $328,000 extra to give to their pet project, Merit Academy, but followed up by CUTTING an after school academic assistance program at the middle school. As is typical for the Woodland Park school district, details are scarce…we’ll post an update as we learn more.

UPDATE – another email was sent out as a followup with new information. CORA request has been submitted to see if there’s any paper trail that would shed some light on this. The new email said:

Hello WPMS Families–

Earlier today I sent out a notification concerning the status of our Afterschool Academic Assistance program.  Unfortunately that email went out prematurely, and I did not have all the relevant information.  I apologize for any confusion, distress, or inconvenience that caused.

We are NOT cancelling our Afterschool Academic Assistance offering.  We will continue to offer this to students on Tuesdays and Thursdays from 3:20pm to 4:20pm.  In the event we need to cancel a particular day due to weather or other unforeseen circumstances, we will communicate that on the day of as needed.

Again, I apologize for any inconvenience this caused our community.

Thank you,

Bill Phalen

The original email:

Ken Witt gets raise, bonus in new contract with WPSD

On 1/17, the Woodland Park school board voted to approve a new contract for superintendent Ken Witt. Thanks to the Colorado Open Records Act, we were able to obtain a copy to see the details of this contract for ourselves. It appears pretty similar to his current contract, with the biggest changes being an increase in salary from $155k to $170k, a guaranteed minimum 5% raise per year (which is 5% more than teachers are guaranteed), and up to 15% annual bonus. Duration of this new contract is two years.

You can read the new contract here; for comparison, check out his old contract here.

A look into district finances – Merit Academy revenue

The district documents all money going to Merit, and all money withheld, in their flowthrough spreadsheets. It’s interesting comparing last year to this year. Here are the two files to open and look at while reading this post:

April 2023 (this is the latest one I have for last fiscal year…scroll towards the end of this link)

August 2023

You’ll notice changes in the first section, revenue being directed to Merit. They’ve been given portions of more line items than before.

The Buyback Services section is where the largest changes can be found. Money withheld for administrative oversight has decreased from 5% to 0.8%. Buildings/grounds maintenance has decreased by 61%. Overall, Merit is paying $323,883.14 less in buyback services this year than last year. Note however that last year, they were being charged $150,000 for construction/renovation costs. It’s unknown if that amount covered everything done to the Middle School or not. So perhaps a more fair number to use in this comparison would be to say they’re paying $173,883.14 less in buyback services this year.

Also note that Merit is not paying the same proportion of transportation costs as the rest of the schools in the district. As for food service, while they’re participating in that program, there is no written agreement in place and no costs being shared with Merit (that program is mostly but not completely funded by the statewide free lunch program).

WPSD BOE votes to give entire Middle School building to Merit Academy, and cut fees charged to Merit

The August 9th school board meeting contained a vote on changes to the Contract and the Facilities Usage Agreement with Merit Academy. The board did not read the changes, did not present them in the meeting, and did not make them publicly available prior to the meeting. Nevertheless, the board packet contained very detailed redlines of the proposed changes, as learned via a recent CORA request.

When you look at the actual changes, it becomes pretty obvious why the board hid this information. Their decision to move 6th grade out of the Middle School this past March created quite a stir…and if people realized what the board did for Merit, I suspect there’d be even more of an uproar. Here’s what the new FUA says:

As Merit grows, the new FUA gives them whatever space they need, with no regard for the 7/8th graders currently occupying that portion of the building. They’re currently expanding one grade level per year as each cohort moves up; they might add preschool in the future. The BOE put in place a legal agreement which will squeeze the 7/8th graders out of that building. More importantly though, they have not disclosed any plan for what will happen to the 7/8th grades currently in that building.

Here’s the currently floorpan for this ’23-24 school year:

On the financial side of things, the BOE gave Merit two sweet deals. First, Merit will no longer be asked to share the district facilities costs on a per-pupil basis. Instead, their share will be computed based upon the square footage they are using.

The district has unused building space, but Merit won’t have to help shoulder the cost of that – they get the benefit of using a district building rent-free, but get special treatment compared to the tenants (schools) of the other buildings. Second, their administrative withholding decreases from 5% to 3.5% (this is expected to give Merit about $61k, though final amount depends on pupil count).

Obtained via CORA, you can view the new Facilities Usage Agreement or the new Contract.

District hires Gessler Blue to appeal CORA lawsuit

As a followup to my earlier post about District Legal Expenses, it has come to light that in March, the district hired law firm Gessler Blue LLC, and as the contract states, this is for the express purpose of appealing the CORA case where the court ordered the district to release surveillance video (which was leaked to NBC here). Principal Partner Scott Gessler bills his time at $425/hr (other lower staff billable rates are mentioned in the contract). Gessler is a former Colorado Secretary of State, was an attorney on Trump’s 2020 re-election campaign, and was also the target of an ethics investigation which ended up costing the state over $515,000 in legal fees (Gessler was found guilty).

Thanks to the Colorado Open Records Act (CORA), you can read his contract with our district here.

District Legal expenses

The current board has greatly expanded the use of outside legal counsel, compared to previous boards. Here’s the data:

  • In the ’19-20 fiscal year, the district spent $15,608.48 on legal expenses (link).
  • In the ’20-21 fiscal year, the district spent $63,532.14 on legal expenses (link). This was the year the district reviewed the charter school application from Merit Academy.
  • In the ’21-22 fiscal year, 7 months of which were under this current board, the district replaced legal counsel with Brad Miller’s office and spent $145,872.56 on legal expenses (link1, link2).
  • In the ’22-23 fiscal year, the district spent $171,250.21 on legal expenses (link1, link2).

What is the board spending our money on? It’s hard to say, they’re pretty secretive as the attorney invoices get heavily redacted. Here’s one from April of last year. What sort of information is being hidden from us? A bit of insight can be gained by looking at the invoice from May of last year, which is the only one received in unreacted form. That will show you the sort of information the district is choosing to keep secret. Judge for yourself if it’s appropriate. One thing you’ll note is soon after Miller came on, the board started using lawyers to redact CORA requests, something done by district employees previously. That’s just a small portion of overall legal fees, but does raise the question of why the board felt necessary to include lawyers in all of those documentation reviews.

The cost of PACE membership

As previously reported here, next year the district will auto-enroll staff into  the Professional Association of Colorado Educators (PACE). PACE is a state chapter of the Association of American Educators (AAE); referred to by some as the ‘anti-union union’.

New details obtained via the Colorado Open Records Act (CORA) shed some more light on this topic. This will be costing our district approximately $40,000. The discussions with PACE took place before contracts were sent out to staff, but the announcement was made after those contacts were sent. It’s possible (likely?) that contracts may have been signed and returned before the announcement was made.

Yet another large expenditure of taxpayer money made behind closed doors and without stakeholder input.

Transportation Cost Sharing – part 2

My first stab at writing about this topic ended up being a bit long – read it here – so I thought I’d try to do a better job of summarizing this (see that link for source material for data here)

Transportation Costs in Woodland Park RE-2 School District – ’22-23 school year

  • Expenses
    • $1,563,177
  • Source of funds to cover expenses
    • Carryover fund balance from RE-2 previous year: $104,758
    • Transportation fees collected from parents: $20,000 ($50 per kid)
    • State Reimbursement: $235,000
    • Grants: $1,000
    • Money to be used from RE-2 General Fund: $1,202,419

The point here is, the bulk of the money comes from the RE-2 General Fund – and Merit Academy is not being required to share that portion of the cost when they participate in this program next year.