Chicago Public Schools is accusing a former charter school
operator of withholding financial documents that would reveal whether it
mismanaged $25 million in public funds, according to a complaint filed March 3
in Cook County Circuit Court.
In the complaint, the Chicago Board of Education’s Law
Department details the state’s largest school district’s alleged struggles with
Prologue Inc., a Chicago nonprofit agency that operated several schools and
programs in the city - notably Winnie Mandela Alternative Learning
Opportunity Program, as of August 2013; W.E.B. Du Bois Early College High
School, as of July 2011; and Joshua Johnston Charter School for Fine Art and
Design, as of July 2010.
Though the board authorized a two-year renewal agreement for
Johnston on June 24, 2015, Prologue did not execute the deal, the complaint
said. On Aug. 24, 2016, CPS rescinded authority to renew the agreement. On May
19, 2016, CPS told Prologue it would not renew the Mandela or Du Bois programs.
CPS cited contract language detailing that Prologue, as part
of winding down those operations, was required to provide, without limitation,
financial information such as inventory of assets, audited financial
statements, bank records, contracts, general ledgers and payroll records. The
board seeks this information “to determine whether Prologue properly used
public funds and to account for assets that should be returned.”
The complaint also noted it took nearly a year since a final
request in May, for Prologue to provide requested student records like
transcripts, enrollment documents, state test scores and discipline records.
CPS representatives purportedly spoke with Prologue CEO Nancy Jackson on June
17, scheduling a facility walkthrough on June 21 and an in-person meeting June
22. But before the walkthrough, Prologue officials allegedly told CPS no one from
the company would attend the meeting or allow CPS to conduct its own
CPS claims it contacted the Prologue board of directors,
hoping to set up a walkthrough and meeting in late June, to no avail. On July
22, Prologue allegedly sent a written response blaming a file server for
failure to provide financial data and “indicating it was working on solving its
massive financial issue,” per the complaint. CPS also sent a Dec. 1 letter
reminding Prologue of its obligation to provide financial data.
According to the complaint, CPS gave Prologue more than $25
million from 2012 through 2016, a total which included five annual outlays for Du
Bois and Johnston, and three for Mandela. The state’s charter school laws stipulate
that when charter schools don’t “expend or obligate all federal grant funds
prior to the end of each fiscal year, the board may recapture any unspent grant
Formal allegations in the complaint are breach of contract — one
count for each other three schools — as well as a count asking the court to order
an accounting determining what Prologue owes and whether it may capture any
assets or inventory Prologue bought with state money.