IDEA Public Schools leased luxury jet in 2019 despite state audit

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Just two weeks before the jet deal was approved, IDEA – the state’s largest network of charter schools – had promised the Texas Education Agency that it would “strictly enforce” the new policies of fiscal responsibility adopted in response to this ongoing investigation.

State education authorities in 2021 opened an investigation into IDEA for its financial practices, but the existence of the earlier investigation makes it clear that allegations of inappropriate spending and conflicts of interest in the network of schools in charter go back further than previously reported, starting with a whistleblower complaint in 2015.

Since then, the Texas-based chain of 143 schools has received more than $3 billion in public education funding. IDEA serves 60,000 students in Texas, with four schools in the greater Houston area and 30 in the greater San Antonio area.

Currently, the U.S. Department of Education and the state education agency are investigating IDEA’s spending and purchases — investigations that were launched in response to “potential financial wrongdoing.” that IDEA has reported to authorities, an IDEA spokeswoman said.

The parallel investigations and associated audits have already led to the departure of two CEOs and other senior managers from the chain; IDEA points out that the deal for the jet used privately raised money – not public education funds.

In a statement, IDEA spokeswoman Candice Burns wrote, “Every dollar entrusted to IDEA Public Schools should support the success of our students. As the IDEA Board discovered and shared publicly over a year ago following an investigation it commissioned, there has unfortunately been a period in the history of IDEA where a small group of senior staff failed to live up to our commitment to direct all resources towards IDEA’s educational mission.

“Instead, these leaders have directed the use of financial, human and other resources for their personal benefit. Along the way, they have taken steps to hide, mask and misrepresent their activities from board members and other oversight entities. These people no longer work here.

Earlier this year, IDEA hired a new superintendent, former TEA Deputy Commissioner Jeff Cottrill, who was in charge of the agency’s audits and investigations of IDEA.

Questions arise about the hotel purchase

The Texas Education Agency’s first investigation into IDEA’s finances began in 2015 after a whistleblower alleged misuse of state funds, procurement violations and conflicts of interest, according to state records.

As part of this investigation, the agency conducted an audit of IDEA, which “found no misuse of public funds; however, it did illuminate for the IDEA Board some instances where internal controls during the review period should have been stronger,” Burns wrote.

Chief Financial Officer Wyatt Truscheit has been given new powers to make purchasing and contracting decisions on behalf of IDEA, and purchasing policies have been updated.

Then, in October 2019, IDEA purchased a hotel in Cameron County worth over $1 million. The Progress Times reported that IDEA lawyers are investigating the purchase of the hotel after identifying accounting discrepancies attributed to Truscheit. Last year, IDEA continued the state attorney general’s office in an attempt to conceal the documents relating to the hotel purchase from the public.

IDEA says Truscheit has resigned. In a lawsuit against IDEA over the terms of his departure, Truscheit says he did not resign, did nothing wrong and was “fired without explanation”.

Throughout Truscheit’s tenure as CFO, there was never any question of IDEA’s finances being properly accounted for and properly reported in federal tax filings, certified audits, and reports to private donors,” state his lawyers in the court records. “In all respects, Truscheit’s work for IDEA met or exceeded the standards set by the CEO, Board, Finance Committee, and external auditors.”

Less than two months after the hotel was purchased, IDEA’s board of directors voted to lease the jet – a deal that was canceled after its terms were reported by the Houston Chronicle.

IDEA founder and then-CEO Tom Torkelson defended the purchase of the plane in a statement to the newspaper.

“Opponents of education reform have falsely attacked a prudent management decision, creating a distraction from our core work. Although at no time were public funds used for the aircraft, IDEA has decided not to proceed with the lease,” Torkelson said.

IDEA self-investigates

In addition to the jet, news outlets reported that IDEA executives regularly used first-class travel, flew on charter flights, chauffeured SUV services and enjoyed other expensive perks.

Then, in February 2020, TEA closed its investigation of IDEA, saying the charter network had complied with policy changes agreed to throughout the investigation.

In April of that year, Torkelson resigned, accepting a $900,000 severance package and saying, “I think there was 100% unanimity that it was the right decision for the organization. at this moment.” He was replaced as CEO by JoAnn Gama, president of IDEA.

Within months, freshly cleared of the TEA audit, IDEA launched its own internal investigation, this time led by a former federal prosecutor. That investigation ultimately confirmed financial wrongdoing by senior officials and efforts to cover it up, according to IDEA spokeswoman Burns.

“Former IDEA executives took steps to conceal their activities from board members and other oversight entities. These individuals have not worked for IDEA for over a year. discovered about their activities has been reported to law enforcement as well as regulatory authorities,” Burns wrote.

Today, after communicating the results of its internal investigation, IDEA is the subject of a federal audit in progress conducted by the United States Department of Education.

TEA followed suit, opening a new investigation into the matter on May 25, 2021.

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