The news reports last week said a Goodyear charter school "closed abruptly" in the middle of the school year.
But there was nothing abrupt about the shutdown of Discovery Creemos Academy.
State documents and federal tax returns reveal the school had been failing financially — and failing its students — for several years.
The warning signs were there — if parents could find them.
Warning Sign Ignored
An audit of the school dated Jan. 20, 2017, raised serious questions about whether the school might go belly up. It was losing too much money, too fast.
Just five months later, in June 2017, the state charter schools board renewed the charter of school owner Daniel Hughes to keep running Discovery Creemos for 20 more years. It survived just seven more months.
That meant the troubled school would collect another $2 million or so in taxpayer dollars for the current school year.
Only now are we learning that last October, the board referred information about the school to the Arizona attorney general's office.
Now, Hughes has vanished after shutting down the school last week. He collected hundreds of thousands of dollars from the school for undocumented purposes.
Teachers have lost their jobs.
Hundreds of students have to move to new schools in the middle of the year — with no state money going to those new schools to cover the Creemos students' educations for the next four months.
And the charter school board faces the question: Why didn't it act sooner?
Even charter school critics agree, whether it's Creemos or another charter, the Legislature left the charter school board powerless to close a troubled school. And there is no oversight of charter school owners funneling tax dollars to their own businesses.
Why Charter School Flunked
Here's a glimpse of why Creemos flunked:
• When the K-8 charter school finally closed its doors last week, at least $12 million in Arizonans' tax dollars went down the drain. Creemos posted cumulative losses of $3.9 million from 2012 through 2016, according to its parent company's tax returns.
• As the school was tanking, Hughes pocketed $850,000 in payments to his businesses, plus a $100,000 salary, according to IRS returns for 2015-2016.
Hughes has not responded to requests for comment. There was no answer at the Phoenix mansion he rented. That home is now on the market as a rental.
• The "financial dashboard" on the charter school board's site posted a "going concern" warning after the 2015-2016 school year: It was unlikely Discovery Creemos could survive for another year.
"(Discovery Creemos Academy) has limited cash and cash equivalents to meet its current obligations that together raise substantial doubt about its ability to continue," an audit says.
• Discovery Creemos was failing its students too, according to 4-year-old academic performance data ending in 2014 — the only data on the school's web site. It's overall rating was 37 out of 100 in 2014, the most recent year available.
Charter Board Web Site 'a Maze'
Most of this information is scattered on the charter school board's web site.
I'm a reporter who scours web sites for a living. The charter school board's web site is a maze.
A determined parent researching a charter school might be able to track down basic information on a school's academic performance and finances.
But there's a sign no one saw. It's under the "complaints" tab on the financial and academic dashboards.
There isn't a single complaint by anyone who may have reviewed Creemos' disastrous report card.
Charter Board Responds
The executive director of the Arizona School Board for Charter Schools declined to be interviewed, but responded to this written question:
Why did the board renew Creemos' charter contract last June after a "going concern" warning and at least two years of data showing it was an academic and financial mess?
This was the response from Ashley Berg, the board's executive director:
"The Charter Schools Board referred its financial concerns with the school to both the ADE and the Arizona Attorney General's Office. It is our understanding that ADE's Audit Unit had scheduled an audit for follow-up and further review at the times of the school's abrupt closing.
Additionally, Board staff has spent many hours over the past year dealing with Creemos academic issue. In accordance with the Board's Audit & Compliance Questionnaire Follow-up Matrix, Board staff sent a letter to (Creemos) on March 8, 2017, requiring Bradley to submit a corrective action plan addressing matters identified in its FY 2016 audit. Since March, Board staff has collected and reviewed information on (Creemos') efforts to address the matters identified in the FY 2016 audit. In October 2017, Board staff forwarded certain information obtained through this process to the Attorney General's office.The Board takes such callous and unfortunate closures extremely seriously. One option the Board will surely consider at its next scheduled meeting is to issue a Notice of Intent to Revoke. That Notice will effectively terminate the school leader's ability to operate charter schools anywhere in the state of Arizona.
The Discovery Creemos shutdown is on the agenda for the charter school board's next meeting, at 9 a.m. Feb. 12 at the Arizona Department of Education building, 1535 W. Jefferson St.
Creemos teachers who lost their jobs are expected to be there.
The attorney general's office hasn't confirmed whether it's investigating Daniel Hughes.