Shuttered school takes DOE to court

Legal counsel for Prevailing Faith Christian Academy recently filed a petition for judicial review regarding the Louisiana Department of Education’s decision to drop the school from the Louisiana Scholarship Program.

In the petition for review, Nina Hunter, the attorney for Prevailing Faith Christian Academy, alleges that her client was not afforded equal protection under the law, meaning the LDOE decision to keep the school from the 2016-17 scholarship program is “in violation of constitutional and statutory provisions.”

She said the Louisiana Legislative Auditor’s Office unjustly denied her client additional time to submit documentation related to an audit but gave the Louisiana Department of Education and additional two weeks to respond.

The petition requests that the school be reinstated in the program until a contradictory hearing can be held because not being part of the student lottery for assigning scholarship students in early January would cause “irreparable harm” to the school.

She also requests a refund of $75,923.68 “as substantiated by receipt of qualified scholarship expenses” and a temporary restraining order that would prevent the LDOE from removing the school from the scholarship program.

“At this point we are simply seeking a fair and equitable resolution, one we have not been able to receive from the Department of Education. My clients’, Rev. Charles and Patsy Brown, reputation and credibility have been severely impacted. They need their community, their parishioners and their students to know that their integrity is intact,” Hunter said.

The LDOE notified school it was being dropped from the program on Sept. 28, citing gross financial negligence. In a letter to the school administration, Superintendent of Education John White said the department would withhold $74,724 of the $84,924 from PFCA’s first-quarter payment for the 2015-16 school year.

School officials notified parents and students that the school would close immediately on Sept. 29. For the 2014-15 school year, the school had 60 students enrolled, 40 of whom were part of the scholarship program.

LDOE spokesman Barry Landry said in September that the following were among the Louisiana legislative auditor’s findings.

• “Prevailing Faith Christian Academy discarded all vendor invoices and documentation used to substantiate expenses for the 2013-14 Scholarship Program Audit. Failing to maintain proper records not only violates scholarship program regulations, but IRS regulations pertaining to churches maintaining their tax-exempt status.
• “Prevailing Faith Christian Academy paid $84,000 to lease payments to Prevailing Faith Ministries, the church in which Prevailing Faith Christian Academy is located. Prevailing Faith Christian Academy could not produce a written lease agreement. Furthermore, the LLA’s investigation further revealed that Prevailing Faith Christian Academy wasn’t a separate entity from but rather a legal trade name owned by Prevailing Faith Ministries. Since a legal entity can’t enter into a lease with itself, the entire $84,000 in lease payments was questioned by the LLA.
• “In addition, the LLA questioned an additional $924 for expenditures in which Prevailing Faith Christian Academy could not provide documentation or the expenditures were not for an educational purpose, including an expenditure with no explanation nor documentation.
• “The LLA audit revealed also revealed that Prevailing Faith Christian Academy: 1) has a $214,024 outstanding balance with its payroll company as of June 9, 2014; and; 2) issued a questionable payment for accounting services with no clear detail of the actual accounting services performed.” 

Hunter said as of Oct. 22, her client had submitted “receipts evidencing that all funds originally questioned were used for an educational purpose under the statute.

Prevailing Faith working with DOE

In August 2014, Prevailing Faith Christian Academy was the only participating school in the Louisiana Scholarship Program to have significant findings in a financial audit. The DOE withheld $10,200 from the fourth-quarter payment to PFCA for the 2013-14 school year.

In the petition, Hunter said the school had a lease to the church for $7 per square foot and a misstatement of that least as $6.15 per square foot led to the department withholding $10,200 from the school as a result of the 2013-14 audit. Despite being requested, she said, that money was never refunded.

Additionally, Hunter said, the response that Patsy Brown drafted in response to the school and church being the same was not made under legal counsel, and counsel for the school contacted the Louisiana Legislative Auditor’s Office and requested a meeting to discuss the audit findings on Sept. 1.

The same day, Hunter said, a representative of the Louisiana Legislative Auditor’s Office contact her and said the audit report would be made available Sept. 7 and the school would not have additional time to submit a response “vetted and prepared by legal counsel or to address the issue of the lease payments.”

The petition then alleges that the findings were not made public Sept. 7 at White’s request and the school’s counsel was not able to use that time to submit additional documentation.

Prevailing Faith Christian Academy field a petition for injunctive relief was filed Sept. 25 to enjoin the legislative auditor from publicizing the report until school administrators had an opportunity to adequately respond and to enjoin the department from withholding funds from the first-quarter payment until they had an opportunity to provide receipts. Hunter said, legal counsel for LDOE contacted the school through its attorney to schedule a conference call the day the petition was filed. The call was scheduled for Sept. 28.

During the call, school administrators were notified the school would be dropped from the Louisiana Scholarship Program.

In the petition for judicial review, Hunter said, “Despite the determination that the lease payments were not valid, which PFCA refutes, the funds were still expended for costs that were valid under the program rules. Once submitted, the department agreed to refund the funds originally withheld.”

The petition for injunctive relief was dropped Sept. 29.

Section 13 for the petition for review states:

"On Oct. 7,  PFCA submitted to the department receipts amounting to $42,448 in mortgage expenses. In addition, on Oct. 22, PFCA submitted to the department additional receipts amounting in $33,475.68 of expenditures qualified under the program. All receipts were submitted to Charlotte Stevens, the Director of Finance, by email. On or about Oct. 13, PFCA applied to participate in the Scholarship Program for the 2016-2017 school years. On Oct. 15, the department determined that PFCA was ineligible to participate in the scholarship program citing gross fiscal irresponsibility. As of Nov. 11, the department has not responded to any requests for updates, or meetings and has not issued a refund of the scholarship funds originally withheld."

“Despite the fact that receipts have been submitted, Prevailing Faith Christian Academy is still being denied participation in the Scholarship Program and is still waiting for funds to be refunded,” she said.

On Nov.12, Prevailing Faith Christian Academy petitioned the 19th Judicial Court for review of the LDOE decision.

Ken Pastorick, media information director for the Louisiana Department of Education, said the department is not aware of the suit but it has received additional documentation related to Prevailing Faith Christian Academy and is reviewing it.