The state attorney general’s office executed a search warrant at Ka‘u Learning Academy on Tuesday morning, school leaders confirmed Tuesday.
KLA Governing Board President Douglas Flaherty told the Tribune-Herald that a “search warrant was applied and carried out” but declined to comment further.
Execution of a search warrant generally implies an ongoing investigation.
A representative from the AG’s office said in an email he wasn’t “able to provide any information at this time.”
The warrant comes as the Naalehu public charter school faces a potential closure by the state. On Thursday, the state Public Charter School Commission issued KLA a new “notice of prospect of revocation,” the first step in revoking its charter.
The commission first put KLA on notice for revocation in November after problems found in KLA’s fiscal year 2017 audit were alleged to potentially have violated provisions of its charter contract.
Those problems included failing to follow standard accounting practices, a lack of separation of duties in school financial procedures and noncompliance with Department of Labor laws and regulations.
The commission also voted at that time to withhold state funding to KLA, excluding money for necessary operations.
Commission Chairwoman Catherine Payne said the new notice was issued to add “a number of things that came up that we felt were critical … to address.”
Additional issues cited in Thursday’s revocation notice include:
• Enrollment discrepancies, including enrolling students outside of grades authorized by the charter contract resulting in overpayment of per-pupil funds to the school.
• Failure to maintain proper student records.
• Failure to maintain accurate and complete personnel and payroll information and to provide that information to the Hawaii State Employees Retirement System and to the Employer Union Benefits Trust Fund.
• Failure to comply with governing board statutory member composition requirements and failure to follow its own bylaws as to the election of new members, calling into question the legal authority of the past and current governing board.
• Fidelity to state assessment procedures and protocols, leading to possible test fraud.
• Failure to conduct criminal history background checks.
• Hiring inexperienced and unqualified non-instructional employees/agents.
KLA has 30 days to respond to the notice. Payne said the commission ultimately is aiming to make a decision during a regular board meeting in mid-May, at which point she said there would be opportunity for public input. KLA can appeal the commission’s decision to the state Board of Education.
The school “has had a lot of opportunities to improve, but a number of things have persisted and those have caused us great concern,” Payne said. “And we’ve reached a point of potential revocation of their charter.”
KLA is in its third year of operations and has more than 90 students enrolled in grades 3-7. It has been at odds with the commission since its first year, when it was issued a deficiency notice for failing to resolve financial issues, including missed deadlines and improperly processing payroll and employee benefits.
The school disputed those problems at the time and alleged part of the problem was it had difficulty reaching and working with commission staff.
Earlier this month, in an effort to resolve some issues cited with its governing board, KLA appointed a new acting executive director. It also accepted the resignation of board member Kathryn Tydlacka, who was a board member while also serving as executive director.
KLA leaders hosted a community meeting Tuesday evening, which Flaherty said was to “bring the parents up to speed” on Thursday’s revocation notice.
Flaherty said the new notice issued Thursday is “a positive thing” because it “gives us additional time to deal with the issues (the commission) has identified.”
“We believe we can resolve all the issues that have been presented, so our expectation is that we are moving forward through next year,” Flaherty said, adding the focus is now on “resolving issues identified in the new prospect of revocation.”
“Our intent is to continue to operate,” added Managing Director Joe Iacuzzo on Tuesday. “We desperately want to be there … We’re there for one reason and that’s the children. They desperately want and need what Ka‘u Learning Academy is offering. That’s all we care about.”
There are at least 34 charter schools statewide. One has had its charter revoked — Halau Lokahi Public Charter School in Honolulu in 2015.
Email Kirsten Johnson at kjohnson@hawaiitribune-herald.com.