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Bed-Stuy Charter School Spent $1M Without Written Contracts: Audit

 An audit from the city comptroller's office found that Bedford Stuyvesant New Beginnings Charter School lacked consistent financial records
An audit from the city comptroller's office found that Bedford Stuyvesant New Beginnings Charter School lacked consistent financial records
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Bedford Stuyvesant New Beginnings Charter School

BEDFORD-STUYVESANT — A Brooklyn charter school spent more than a million dollars on reported renovations over the course of three years without written contracts or detailed project plans, according to a recent audit from the city comptroller’s office.

A report from Comptroller Scott Stringer’s Office on the oversight of Bedford Stuyvesant New Beginnings Charter School found the Lewis Avenue facility did not have detailed invoices and other documents to support nearly $1.66 million in construction costs.  

The office also said that there was a "lack of financial controls” over its handling of money from school lunches, afterschool programs and fundraising.

Bedford Stuyvesant New Beginnings didn’t have “adequate controls” over cash receipts amounting to about $97,000 during fiscal years 2013 and 2014 to show that the cash was properly accounted for, according to the report.

However, the school had taken steps to turn around their operations prior to the audit, according to a letter from the school's Board of Trustees.

"Following the end of the audit scope of June 30, 2014, and prior to the commencement of your audit in November 2014, the school had undergone a number of changes, many of them in line with the recommendations that are suggested in your audit report,"  BSNBCS board chair Joseph Sciame wrote in response. 

"Indeed, on numerous occasions over the course of the audit process, your staff commended the school’s administration and trustees on the improvements that we made to the school in recent years."

Some of the findings happened when the school was managed by its former executive director, who left on June 30, 2014, the audit stated. A new executive director has since taken over and identified steps to address concerns in the report, according to the comptroller’s office.

Among those steps is a new kiosk system implemented to control cash receipts from school lunches and activities, as well as tracking funds with a scan card, the audit detailed.  

“The school has an appropriate and effective cash control policy,” the school said in the report, responding to recommendations from the comptroller’s office.

School officials added that they expanded their system prior to suggestions from the audit, and now formally documents its policy and procedures for staff.

The school at 82 Lewis Ave. opened in 2010, leasing the former St. John the Baptist School building from the Roman Catholic Diocese of Brooklyn.

According to the audit, the school’s Board of Trustees failed to ensure the charter school entered into written contracts with those renovating the building and lacked project plans outlining the full scope of work, as well as any related cost estimates.

They also hired a contractor without selecting the company through a competitive bidding process, which was in violation of city policy, the comptroller’s office said.

In addition, records that detailed specific locations of work or timelines for each project were unavailable, according to the report.

“Ensuring that every dollar we spend on schools goes toward the education of the next generation must be our highest priority,” Stringer said in a statement.

“Verbal agreements and informal arrangements to spend hundreds of thousands of taxpayer dollars are neither good business practice nor the appropriate way to fund our children’s education. There must be accountability to protect these resources from waste, fraud and abuse.”

Board members told auditors that the school needed repairs done quickly so it would be completed by its scheduled opening time, and that the contractor it selected guaranteed work could be done and was willing to delay payment as the school experienced financial problems, the report said.

Auditors confirmed that work such as installed air conditioners and heating units had been recently completed, but said in the report that there was an absence of signed contracts and plans.

Documents from the parish that leases the building to the school detailed in letters that “major repairs” occurred.  

School officials told the office that they had contacted the school’s former executive director and were provided with construction bids along with contract copies from 2010 and additional documents, but the comptroller’s office found it insufficient.

Stringer’s office made a series of recommendations to the school, suggesting they make efforts to get competitive bids from vendors and document them; ensure that all contracts are in writing, signed by the head of the school and approved by the board; and get detailed project plans for the scope of work.

In response to the findings, the school said in the report that it generally agreed with the recommendations but maintained that it already follows the suggested protocols and provided the necessary paperwork to the audit team.

Some missing documents came as a result of the change in leadership, “as well as its evolving document management system,” the board’s chair added, and in the report the school stated certain records had been produced.

Bedford Stuyvesant New Beginnings puts an emphasis on hands-on learning activities, with an indoor urban farm and its recent receipt of public funds for science carts. The school graduates its first class this June.

The comptroller's office also released an audit of Merrick Academy in Queens this month.