Troubled charter school company abandons Milwaukee schools

The company was supposed to run 3 MPS schools
Posted at 10:32 PM, May 16, 2017
and last updated 2017-05-16 23:32:36-04

Universal Education Companies received thousands of tax dollars in exchange for operating three Milwaukee Public Schools, but one school has since closed and two are back under the control of MPS.

TODAY'S TMJ4 was the only station to report on a charter school company that deserted two Milwaukee schools and left students, parents and staff scrambling to keep the school running. Our I-TEAM looked into the company's history and budgets to try and find out what happened. They found some of the numbers don't add up.

It was a shocking return from spring break for Kelly Felder's 15-year-old son.

"He was looking around like 'Where's Mrs. and Mr.' It was hurtful for the kids," she said.

The company operating Universal Academy for the College Bound since 2013 was gone.

"You made money and you left, which is disgusting," Felder said.

Nobody at MPS would say much, but back in March it agreed to take over the Webster Campus from Universal Education Companies. The company used to have three Milwaukee schools. Their website says they run eight schools in Philadelphia.

"We had to do what we had to do," said Mark Sain, the Milwaukee Public Schools Board President.

The school was the third Milwaukee campus the company abandoned this year. Sain says Universal told the district they couldn't enroll enough students to cover expenses. They had more than 600 students in the school.

"Having to have to provide rent, but then also having to have to provide and cover the salaries of their educators and all the other resources that are going on in that school each and every day. So, some of that probably had to do with just over all fiscal management of the day to day operations for Universal," Sain said.

TODAY'S TMJ4 looked back at the original contract between MPS and Universal from 2013. It required the school to submit an audit to the district every year. In 2016 the company and MPS went back to that contract, making significant changes to oversight. No one would tell us why the changes were made. The updated contract gave MPS full access to financial records. It capped funding to Universal at $1,130,781 for the 2016-2017 school year. It also required the school to give MPS detailed invoices, that the district would review and approve before making any payments.

Within months of the new contract starting, Universal stopped running the school.

Looking through documents, we found Universal's proposed budget to MPS showed $5,000 in travel expenses. Their 990 tax documents show they spent $500,000. The MPS school board president wasn't aware of the big discrepancy in expenses.

"They had some other fees that just didn't seem to match up with what they proposed or even how they were running other schools," said Joe Wall, an assistant professor at Marquette University.

Wall spent 20 years in finance. We asked him to check out Universal's tax documents.

"It doesn't seem to follow normal ethical principles suggested in accountancy," Wall said.

Wall also said he'd need more information from Universal to fully understand how they're handling the money. Still, he found inconsistencies. Tax filings show the school spent $229,511 on advertising expenses, while other Universal schools spent nothing. Office expenses also varied widely.

"Our office expenses, the cost to recruit our kids and the amount of time spent traveling to make sure whatever it is we do as a business is way more expensive than it is elsewhere. That's kind of weird," Wall said.

He added that even if costs varied from one area of the country to another, the difference might be a couple thousand dollars, not hundreds of thousands.

With numbers like that, the school board president wonders why Universal said they couldn't afford to keep their Milwaukee schools open. And Felder wonders if her kids got the education the company promised.

"You set a budget, you stick to your budget," she said. "It shouldn't come out of Milwaukee taxpayer dollars."

We called Universal Companies, who directed us to the woman who handles media calls. Voicemails and emails were not returned. We asked Milwaukee Public Schools if the district will change their process for awarding charter school contracts. He said he doesn't feel that's necessary.

Be sure and watch TODAY'S TMJ4 on Roku! We are the only station in Milwaukee to provide the latest news, weather and sports on the device. Search for us on Roku today!