Red Flags Everywhere A review of documents from Smothers Academy raises serious questions about its management practices

A review of documents from a Jefferson Parish charter operator that applied to run a historic high school in New Orleans has revealed that the organization could be violating state ethics laws and has been flagged for serious deficiencies in its management and accounting practices.

Last month, Orleans Parish School Board (OPSB) officials unveiled a plan to phase out operations at McDonogh #35 Senior High School, the first high school established for African-American students in New Orleans, and reopen the school under a bizarre non-charter private management scheme.

At the same time, the district issued two requests for proposals: one for an organization that would manage the school during the phase-out period, and another for an organization that would restart the school beginning with 9th grade and adding subsequent grades over four years.

Smothers Academy, Inc., the non-profit behind Smothers Academy Preparatory School, an all-boys charter school in Old Jefferson, was the only organization to submit an application to serve as the long-term operator of McDonogh #35.

Smothers Academy was granted a Type 2 charter by the Board of Elementary and Secondary Education (BESE) in 2016, after being denied charters by the Jefferson Parish School Board in 2015 and OPSB in 2013. Damon Smothers, CEO and founder of Smothers Academy, also previously applied to open a charter school in Bakersfield, CA in 2009, but later withdrew that application.

Smothers Academy is one of the few charter schools in Louisiana that uses corporal punishment to discipline students.¹ According to a student handbook posted on their website, Smothers Academy administrators use a wooden paddle to met out corporal punishment to students, although parents can opt-out of paddling in writing.

According to its annual school report card from the Louisiana Department of Education, Smothers Academy struggled in its first year. Overall, the school received a “F” grade with less than 10% of students scoring “Mastery” or above or the state standardized tests.

In spite of these challenges, the charter organization believes it is prepared to serve as the long-term operator of McDonogh #35. Their proposal to OPSB outlines a plan to reinstate selective admissions requirements at the school, which the school board dropped following Hurricane Katrina. It also emphasizes the ties that three of the proposed founders – Damon Smothers, Kemic Smothers, and Averil Sanders, Jr. –  have to the school as alumni of McDonogh #35.

Red Flag: Nepotism

However their proposal to OPSB also reveals that Smothers Academy is likely in violation of state ethics laws prohibiting nepotism.

According to the leadership team resumes included with their proposal, as well as information posted on Smothers Academy’s website, CEO Damon Smothers has hired his brother, Kemic Smothers, to serve as the organization’s legal counsel and director of procurement.

Louisiana law explicitly prohibits the chief executive or administrative officer of a government agency – which includes charter schools – from hiring an immediate family member to serve in any capacity in that agency. How Smothers Academy has been able to operate for so long with this arrangement is unclear, but it raises serious questions about the trustworthiness of the organization.

Red Flags: A Troubling Audit

Smothers Academy’s proposal to OPSB also claims that they have successfully managed the financial reporting requirements of their current charter in Jefferson Parish, proving that they “are financially viable, [and] have the educational acumen and financial integrity to be the long-term entity to operate McDonogh 35 Senior High School.”

Yet a review of their most recent audited financial statements, covering the 2016-2017 fiscal year, actually surfaced several worrisome findings that undermine their self-declared financial integrity.

The audit, which was conducted by Luther Speight & Company, a local accounting firm, uncovered material weaknesses and significant deficiencies in the organization’s internal controls that presented a “reasonable possibility” that their financial statements were incorrect.

In the most serious of these findings, Smothers Academy was unable to account for $33,480 that was missing from their bank account.

Auditors also discovered that Smothers Academy administrators had spent $9,376 on the organization’s credit card for what appeared to be personal expenses, including alcoholic beverages, which is prohibited by Louisiana law. In addition, school administrators never provided the accountants with credit card statements to validate those purchases.

Moreover, it is questionable whether the school complied with the state’s open meetings laws. Administrators did not provide minutes from the charter’s board meetings and auditors could not find evidence of those meetings on the school’s website. The school subsequently dug up minutes for some, but not all of the board meetings they claimed to have held.

Finally, auditors uncovered a series of problems with Smothers Academy’s payroll and personnel management. In some cases, the amounts paid to employees differed from what they should have been paid. The files of many employees also lacked required documentation. According to the audit, “vital records, such as employment contracts, documentation in change in pay, sick and vacation leave documentation, signed experience verification forms, and background check information were missing from multiple personnel files.”

Time to rethink the plan for McDonogh #35

Taken together, these problems should almost certainly disqualify Smothers Academy from taking over the management of McDonogh #35 over the long term. Furthermore, given the fact that they were only organization to apply to run McDonogh #35, perhaps it is time for OPSB officials to rethink their plan.

From the beginning, the district’s plan to hand over McDonogh #35 to non-charter private management struck many observers as odd to say the least. Some suggested that it was an attempt to reinstate selective admissions criteria at the school. Others claimed that it would give the school more “flexibility” than it would otherwise have under the strict accountability requirements established for charters.

Whatever the motivation, no one was fooled into believing that the plan was anything other than a sneaky way to circumvent the rules and performance expectations that we’ve established for schools in this city.

We’re about to officially reunify the school system for the first time since Hurricane Katrina, a step that has not only demanded planning and coordination, but required that the education community put its trust in those who will lead the unified district going forward. The fact that OPSB officials would pursue such a backhanded scheme for McDonogh #35 has only diminished that sense of trust.

If OPSB’s leaders want to repair their standing among local school leaders and advocates, they should take this opportunity to jettison their plan for McDonogh #35 and commit to either running the school directly under new leadership, or finding a qualified operator to run the school as a charter. Anything else would be a betrayal of the principles guiding the reunification and the students and families that the school system serves.