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Outreach Academy makes plans to open, despite judge's ruling

By KBell
July 18, 2011 at 2:18 a.m.

OUTREACH SALARIESPhillips provided to the board a list of salaries for each of the school's employees. No employee will get a raise next year, according to the budget. Here are a few of their annual earnings:

Elaine Phillips, business manager: $42,000

Samuel Phillips, an engineer by trade, holds three job titles and salaries, including director of technology, transportation, and maintenance and operations makes a total of: $57,750

Lorrine Hernandez, who gets paid two salaries for principal and superintendent makes: $63,000

Source: School board agenda packet

OUTREACH ACADEMY TIMELINEApril 2002: State Board of Education creates charter school

January 2003: School fails for the first of many times to turn in yearly financial audit

September 2006: IRS freezes school's accounts because of delinquent taxes. School files Chapter 11 bankruptcy

August 2008: Texas Education Agency warns school it needs annual financial audits for previous years

October 2008: Academy asks state to release suspended funding so it can meet payroll

November 2008: Education commissioner appoints financial conservator to oversee school's financial operations

December 2008: TEA requests repayment of $783,093, expenses the school could not document

April 2009: State deems Outreach a high-risk grantee, forces it to submit reports before receiving funds

July 13, 2010: Education commissioner sends notice of intent to revoke school's charter

May 23-24: The case of TEA vs Outreach Academy goes before the State Office of Administrative Hearings

July 15: Judge Pratibha Shenoy recommends TEA revoke the school's charter

Days after a judge ruled the Texas Education Agency should close down Outreach Word Academy, the charter school continued with business as usual and prepared for the upcoming school year.

"It's not an option," said Elaine Phillips, the school's business manager and founder. "We're not going to accept anything other than opening, and not only next year, years after. We're in it for the long haul."

The academy plans to submit its disagreements with the administrative law judge's decision, which was issued Friday. After that, the state agency has two weeks to submit its rebuttal. Then it's up to the judge to make a final ruling, Phillips said.

School is scheduled to start Aug. 15.

At its regular meeting Monday, the school board approved next school year's budget based on last year's enrollment of 310 students.

The three board members present - Chairman John Sweet, Parliamentary Larry Helps and Secretary Lenora Offlee - approved a budget that shed 15 percent from last year's spending, which would open up more money to be paid to the debts the charter has incurred over several years. The cuts would come by tightening spending but not decreasing its staff, which have all planned to return next year, said Lorrine Hernandez, the principal and superintendent.

So far, 297 students have enrolled for this school year, and the school expects that number to reach 340.

"I think we're in a good position at the school where we now have the infrastructure and curriculum," Hernandez said. "We have more materials to work with, so those would not be more costs to us. We basically have what we need to run the school."

Phillips provided to the school board statements that showed what costs the school will have next year.

Those include $32,553 for a loan from First Victoria Bank, $85,460 in unsecured claims and $52,957 toward the school's 2006 bankruptcy.

The bankruptcy amount is due in 2013. Sweet noted the academy should most likely pay off that amount before then if it continues the rate at which it's been making payments.

Phillips offered documentation showing other accounts the school is close to paying off, like its account with the Texas Workforce Commission.

"At the end of December 2013, we should be pretty much out of debt," Phillips said.

The 2011-2012 budget also called for $120,000 to be paid to the TEA, as part of a $783,093 federal grant the school is returning because of some spending it could not document with what it called a subpar financial management system.

Another $108,000 is budgeted toward paying back the IRS for delinquent taxes and penalties stemming from the school's first year of operation.

Phillips listed $122,212 as the amount owed to the IRS, if the agency accepts the school's request for abatement for failure to pay semi-monthly deposits. Phillips said she wasn't notified by the IRS until April 2011 that the school was required to make twice-a-month payments.

Hernandez said the staff continues to be dedicated to providing a quality education to its students, most of whom come from economically disadvantaged homes, according to the TEA. The school was a recognized school district last year, the second-highest rating from the TEA.

"The day ... students are not successful, that's the day we should not be in business. Those are lives. We take them very seriously, and our students know that," Hernandez said.

The school board went into closed session to speak with its lawyer about the case with the TEA. It took no action when the board reconvened.



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