Auditor defends decision to not investigate Odyssey Charter

Emails obtained by The News Journal show that in the weeks leading up to last Friday's announcement that Odyssey Charter was put on formal review, the secretary of education had sought a state audit of the school.

But the state auditor resisted.

Citing lack of staff and recent changes to state law, Delaware Auditor Kathy McGuiness told Susan Bunting, the secretary of education, that her office was limited in how it could fulfill the request, unless it was willing to pay an hourly rate to begin an investigation.

McGuiness told Bunting that she didn't know how many hours the project could take, according to emails provided by the state Department of Education.

The matter will now be investigated by the Charter School Accountability Committee, which will determine whether the school is violating the terms of its charter, and if so whether to order remedial measures. The education department still thinks an audit is necessary.

VIOLATIONS DOCUMENTED:Odyssey Charter put on Formal Review

The first public hearing about the Formal Review will be held June 11 in Dover. Bunting will review the Charter School Accountability Committee’s report and other related materials, then present her decision to the State Board of Education on July 18. The board must agree with her decision.

The process has ended in probation or closure for several schools in recent years.

The American Hellenic Educational Progressive Association helped form Odyssey Charter in hopes of creating an educational space for the area’s Greek-American community. The 1,800-student school was largely considered a success in the years after it opened in 2009.

Kathy McGuiness is the Delaware state auditor

But during the past year, Bunting said she received complaints about Odyssey school board members' governance and financial dealings. This included allegations that the school was funneling public funds to pay for the Greek organization's projects.

In her letter to the school board, Bunting outlined the case against the school, including what she called a history of conflicts of interest, misappropriated funds, equal rights violations and more.

It's one of the reasons why McGuiness' response to a request for an audit by a state secretary caught many off guard.

Officials with the state Department of Education have said it never had to pay for past audits. Some state lawmakers have condemned McGuiness' response as a blank check.

McGuiness said her office has received scores of requests for investigations since she became auditor in early 2019.

"These requests, along with the numerous unfinished audits I found upon taking office, are above and beyond the audits and engagements mandated in the Delaware Code," McGuiness wrote to Bunting.

McGuiness also said that Odyssey has not met certain criteria listed in state law that would trigger an audit, and the law does not explicitly authorize her to handle the Department of Education's request.

She said her office could still conduct the investigation — possibly by contracting an outside firm with higher rates and an added administrative fee collected by her office — as long as Bunting's department pays for it.

State education officials and a handful of lawmakers argue that McGuiness' denial of the audit request without payment is a choice rather than a legal constraint.

McGuiness disagrees.

"It is not an issue of payment; it is an issue of following Delaware Code," the auditor's office wrote in an email to The News Journal. "State law allows AOA [auditor of accounts] to charge for its services."

Delaware's Secretary of Education Susan Bunting.

Former Auditor Tom Wagner, whom McGuiness replaced this year, said he never asked the Department of Education for money to investigate school finances during his tenure of 30 years.

“If it was concerning enough for a cabinet official to be interested in, I was going to pay extra attention to it,” Wagner said.

McGuiness would not disclose any information about the scores of other requests she has received since taking office, including how many of them have resulted in audits.

She guesses that she has received so many requests — sometimes several a day — because of the public outreach initiatives she has promoted since taking office.

"We are pleased to receive these requests," an email from the auditor's office said.

McGuiness has been state auditor for less than six months. The former Rehoboth Beach commissioner, a Democrat, inherited an office at half capacity. She has spent the first several months of her tenure filling empty desks.

"A lot of our staff … need training," McGuiness said. "We have to do what we can do within the confines of what we have."

Since stepping in, McGuiness contracted an outside firm to audit her own office. But that self-audit, which she sought to improve efficiency, has put some duties in a "temporary holding pattern."

She has also asked the General Assembly for more money for new staff and related costs. She argues the positions are necessary to fulfill her office's obligations.

The News Journal reporter Natalia Alamdari contributed to this report.

Contact reporters Josephine Peterson and Sarah Gamard at JHPeterson@delawareonline.com and SGamard@delawareonline.com.