FILE - Louisiana State Capitol

The Louisiana State Capitol in Baton Rouge, Louisiana. (Stuart Seeger | Flickr via Creative Commons)

Louisiana charter school officials used tax dollars to start a private school, possibly violating the law, the Louisiana Legislative Auditor says.

The school’s leader says it was a mistake made with the advice of an attorney and the money will be repaid.

Charter schools are publicly funded but run by private organizations. Learning Solutions, Inc. operated Vision Academy in Ouachita Parish from 2014 until the charter expired June 30.

According to the Legislative Auditor, LSI transferred $200,000 from its Capital One Bank operating account, which consisted primarily of state tax dollars intended for Vision Academy, to open a money market account at Homeland Federal Savings Bank. Approximately seven weeks later, LSI used $100,000 of the $200,000 to purchase a Homeland Bank Certificate of Deposit, the Auditor says.

With the “unanimous written consent” of the company’s board of directors, records show, CEO Latoya Jackson pledged the CD as collateral to borrow $100,000 in a revolving line of credit in LSI’s name. The written authorization, issued in October 2016, did not describe how the money would be used, though records show the directors a few days later gave Jackson sole authority over a checking account in the name of Dream Academy, investigators say.

Bank records show the CD and the line of credit were opened on Nov. 3, 2016. Both the CD and the line of credit were for 12-month terms and were extended for an additional 12 months after the initial term, the auditor says.

LSI’s first draw on the line of credit was for $70,000 and was the opening deposit into Dream Academy’s Homeland Bank account on Nov. 3, 2016, according to the Auditor. Three more draws, totaling $30,318, were made between December 27, 2016 and March 1, 2017 and also deposited into Dream Academy’s account.

Dream Academy, a private pre-K program, operates in a leased building on a Monroe church’s campus. The Legislative Auditor’s report indicates the line of credit was used for building renovations paid for in lieu of rent, though the credit application states it would be used for the school’s operations, not building improvements.

LSI’s Homeland Bank CD was redeemed on Nov. 13, and a new $100,000 CD account was opened at First National Bank the next day. LSI used the new CD as collateral for a $100,000 loan from First National Bank, dated Nov. 14, 2018. The balance of the line of credit as of Aug. 2, 2019, is $89,605, the Auditor says.

“By pledging public funds as collateral for a loan that was used to open a private daycare/pre-K school in a subsidiary’s name and failing to remit public funds used as collateral upon termination of the Vision Academy charter, LSI board members and officers participating in the decision-making process may have violated the state constitution and state law,” the Legislative Auditor’s report states.

Jackson says the decisions questioned by the auditor’s office were made in consultation with an attorney. The attorney confirmed to investigators that he set up Dream Academy as a subsidiary of LSI, but claims he warned Jackson to keep its finances separate from those of Vision Academy, the Auditor’s report says.

In her response to the allegations, Jackson writes the money in question “has always remained in the bank” and “will be released to the Louisiana Department of Education as recommended.”

Staff Writer

David Jacobs is a Baton Rouge-based award-winning journalist who has written about government, politics, business and culture in Louisiana for almost 15 years. He joined The Center Square in 2018.