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Committee accepts annual charter financial scorecard; auditors flag internal-control issues at large schools
Summary
ML Clarks and Associates presented the Charter School Review Committee with school-by-school financial results, including deficits at several schools and audit findings that delayed reports or noted internal-control weaknesses; the committee accepted the annual scorecard and asked staff for follow-up.
The Charter School Review Committee accepted the annual financial scorecard on March 26 after a detailed presentation from Rupesh Gupta of ML Clarks and Associates that summarized fiscal year 2025 results, enrollment trends and audit findings across the city's charter portfolio.
Rupesh Gupta reviewed each school's fiscal highlights: Downtown Montessori Academy posted a modest deficit and maintained a strong cash position; Central City Cyber School reported a surplus but later had its charter revoked for failing to complete closeout reporting; DLH Academy ran a larger deficit, and Milwaukee Academy of Science (MAS) recorded a roughly $1.9 million deficit after sizable declines in COVID-related stabilization and insurance proceeds despite a large enrollment increase.
Gupta also noted recurring issues that affected audits and scorecards: delayed audit completions (MAS's audit was completed late), repeated internal-control findings tied to account reconciliations and closing adjustments, and instances of expired teacher licenses mentioned in auditors' management comments. "We had a repeat finding from prior year due to account reconciliations and closing adjustments not done on a timely manner," Gupta said while describing MAS's material weakness and the school's commitment to a corrective action plan.
Committee members asked whether the expiration of ESSER federal funds had been used to cover ongoing operating costs and whether the loss of that revenue posed a structural risk. Gupta said his review did not include a formal analysis of ESSER uses but observed from experience that many schools had relied on ESSER for operating needs and advised staff could follow up with schools to analyze budget impacts.
The committee asked staff and the vendor to provide more comparative tables (multi-year FTE cost and revenue breakdowns) and to check interim compliance for schools that had late monthly or annual reports. After discussion, a motion to accept ML Clarks and Associates' annual financial scorecard carried by voice vote. Committee members were also urged to follow up with schools that had audit findings and to consider midyear checks to monitor corrective-action progress.
The committee welcomed Dr. Tayani Davis as a new member before adjourning.
