State says Blackfoot charter director may have violated state laws

(The headline has been corrected. An original headline did not accurately reflect the intent of the letter from the Public Charter Commission.)

BLACKFOOT — State officials have reason to believe Blackfoot charter school administrator Fred Ball may have violated Idaho’s bribery and corrupt influence laws and other state codes.

Chairman Alan Reed detailed the Idaho Public Charter School Commission’s concerns about Ball in a Tuesday letter to Bingham County Prosecutor Paul Rogers. As the authorizer for the two charters — Bingham Academy and Blackfoot Charter Community Learning Center — the commission is obligated by state law to report the possible violation to the county prosecutor.

Fred Ball

Ball is director of both public schools. He plans to retire in June.

Tuesday’s letter follows a forensic audit of the schools, requested by the commission, that focuses on transactions involving modular classrooms. Idaho Education News first wrote about these transactions in January.

  • Ball received a $16,000 reimbursement from Blackfoot in 2017. In December 2018, Ball told Idaho Education News that he personally purchased two modulars from Salt Lake Community College, and resold them for the “spectacularly low price” of $16,000 or “what he had into them.” Documentation for the $16,000 transaction was “incomplete,” Reed wrote.
  • Salt Lake Community College officials told EdNews that the college has no record of a purchase with Ball. Instead, documents show that the college sold at least one modular directly to Bingham Academy in December 2013, for $2,000.
  • Bingham Academy wrote a $12,000 check to “Somewhere in the Middle,” a former band of which Ball’s son was a member. The forensic audit of both schools revealed that Bingham paid the band to transport modulars sometime in 2014. “The school has not been able to produce documentation supporting this transaction,” Reed wrote.

“The Public Charter School Commission has reason to believe that there may have been a violation of the Bribery and Corrupt Influence statutes,” Reed wrote to the county prosecutor.

The state has investigated both of Ball’s schools for months

Idaho Education News uncovered a range of unexplained payments from the schools to Ball, including the $16,000 reimbursement for modulars. The commission has for months investigated both schools following news of unexplained reimbursements and past allegations of questionable internal controls and financial practices.

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In March, the commission’s investigation culminated in a $20,000 forensic audit of past modular transactions and the schools’ finances.

The audit has since ended. Idaho State Board of Education Executive Director Matt Freeman told EdNews Tuesday that missing documents prompted state leaders to cut the probe short.

“Due to a significant lack of documentation regarding a number of transactions, we felt like the cost of continuing the audit would far exceed recovering what may have been lost because of the lack of record keeping,” Freeman said.

The charter commission operates under the State Board’s umbrella.

A “final” audit report from auditing firm Eide Bailly details the payments to both Ball and his son. The report also outlines progress in other areas of concern brought to the firm’s attention.

Here’s a closer look at what the short-lived audit did — and didn’t — find:

  • General ledgers and bank records: Eide Bailly obtained more than $130 million worth of transactions to compare with monthly statements, cancelled checks and deposit slips. The firm did not have time to analyze these records.
  • Recordkeeping: Eide Bailly noted “somewhat unorganized” invoice, receipt and statement records. The school’s former business manager, Randy Ruger, kept some records offsite. The firm did not analyze these records due to “potential time and costs.”
  • Credit cards: The firm conducted a “cursory” examination of prepaid and corporate credit card statements from the schools. The firm did not have time to document charges in detail or verify supporting documents provided to justify charges. The firm found no “financial impropriety concerns.”
  • Cash handling:  The firm obtained the schools’ cash and deposit summary forms. Auditors compared “several” of these forms and traced cash receipts to bank deposits for certain dates. Auditors found no significant concerns “to date” with respect to bank deposits for certain dates.
  • Commingling of funds between schools: Auditors found $801,814 in shared expenses between the schools, mostly relating to payroll and operating expenses. The firm did not further analyze these shared expenses.
  • Funds used for on-site daycare: Eide Bailly found $40,984 in daycare expenses, but said it was unable to perform further analysis.

The report also noted that “it appears the recordkeeping process is improving at the charter schools.”

In January, EdNews questioned Ball about discrepancies in his explanations of past modular purchases by the schools.

“There’s nothing under the table here,” Ball said. “I’ve been at this too long. You guys would not be able to find it if we were trying to hide it.”

Rogers told EdNews Wednesday that news of potential criminal activity at the school was “so new” that he and other local officials have not been able to determine whether or not to pursue an investigation.

Rogers has full discretion on how to proceed with Reed’s letter.

Dan Cravens, a trustee at both schools, said he “regrets” that the commission “ignored” a concluding statement about cash handling in the report.

“This statement would indicate that is not evidence to carry out a criminal investigation, Cravens said. “I would be surprised if the county authorities would have any abilities beyond what a professional auditing firm has to investigate this matter.”

If the local authorities decide to look into the matter, Cravens added, the schools will help them in any way possible.

In his own op-ed Tuesday, Cravens suggested that individuals at the schools were “cleared of wronging” and called past reporting about the schools “fake news.”

Bingham and Blackfoot have been in the charter commission’s “critical” category for financial stability for four of the past five years.

Other issues for the schools

Blackfoot city officials could force the schools out of their current facilities, due to school administrators’ inability to get the city a robust plan for leaving their current temporary facilities.

The city’s planning and zoning commission was on Tuesday expected to make a decision on whether or not to allow the schools to stay in their current locations, but tabled the decision.

The commission is expected to hold a public hearing on the issue June 25 in the Nuart Theater, 195 N. Broadway, Blackfoot.

Idaho EdNews data analyst Randy Schrader contributed to this report.

This is a developing story. Stay with Idaho Education News for updates and reaction. 

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