Saturday, August 6, 2016

How Newark Charter School Cooked Their Books To Break The Law In Delaware – Exceptional Delaware

How Newark Charter School Cooked Their Books To Break The Law In Delaware – Exceptional Delaware:
How Newark Charter School Cooked Their Books To Break The Law In Delaware


Newark Charter School found a way to overtly break Delaware charter school laws and they are using parents and students to do it.
Yesterday, an anonymous source informed Mike Matthews that Newark Charter School’s student body activity funds are legit.  Be that as it may, they aren’t reporting the revenue generated from these activities.  Instead, they are putting at as an expense on their monthly budget.  They aren’t reporting this revenue anywhere.  But they are showing the expense on their monthly budget.  How much are they getting overall?  That is unknown, but I was able to find out they are using student body activity revenue to pay for items they should not be according to Delaware law.
Newark Charter School does not post a 990 IRS tax form on their website.  They are exempt from even filing this return.  Why?  Because way back during the Bill Clinton years, they had elected officials on their founding board.  Granted, none of those elected officials are there anymore.  No one has ever questioned NCS at a state level about this before and they just assume it is alright.  Even though the IRS issued very specific guidance to charter schools about this type of exemption.  But of course Newark Charter School takes advantage of this ambiguity.  Until the IRS determines they are not exempt, they will continue to not file tax returns.  Even though they should and the reasons for them not doing so are the most ridiculous thing I’ve ever heard.  On IRS 990 tax forms, non-profit corporations are required to show any revenue they receive.  They don’t have to pay taxes at all, but they are required to show their numbers.
There are a multitude of reasons why Newark Charter School would not want to file an IRS tax return.  They are the only Delaware charter school specifically exempt from this.  Academy of Dover had their corporation status rescinded by the IRS some years ago, but the Delaware Dept. of Education turned a blind eye to this glaring fact during the school’s formal review last year which was in part over financial viability.  Eventually, Academy of Dover was able to restore this status and are now filing their 990 forms on their website.  But Newark Charter School took advantage of the bogus loopholes in this IRS regulation and have had a field day with it ever since.
This was my biggest issue with any changes to House Bill 186, the original charter school audit bill.  My sense was that anything even associated with charter school audit legislation would only be tainted by Senator David Sokola.  This would somehow benefit Newark Charter School and keep their finances in the dark.  Anyone can make a budget and show numbers on it, but a true audit and an IRS return would show a lot of information.  They would have to report the revenue they receive from students or their parents for field trips and How Newark Charter School Cooked Their Books To Break The Law In Delaware – Exceptional Delaware:

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