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Posted: March 30, 2013 6:38 p.m.

Charter school behind on rent, insurance

Photo by Amber Pittman/

Challenge Charter Academy is facing financial woes and owes nearly $165K to state and local organizations.

The academy has a delinquency of $116,477 owed to the state health benefit plan, according to a letter from the Georgia Department of Community Health, which was sent to the school and the Newton County School System.

The state Board of Education and the Georgia Charter School Commission were also notified of the school’s delinquency.
The letter noted that if the Department of Community Health doesn’t receive the payments plus any additional contributions due from the academy within 10 business days, under state law, the state Board of Education will be formally notified to withhold future appropriations until receipt is confirmed.

Lou Erste, charter schools division director for Georgia, said school districts and charter schools contract with DCH for participation in the State Health Benefits Plan.

He explained that if a school district or charter school becomes too delinquent on their benefits payments to DCH, DCH has the right under Georgia law to ask the State Board of Education to withhold all state funds from the school district or charter school until the district or charter school pays what they owe.

Erste said the letter from DCH was not a formal notification requesting that the state school board withhold funding from the school.

“It is a preliminary step to stimulate a resolution before withholding is imposed,” Erste said. “Until the formal request for withholding is received, the State Board cannot act on this.”

An email written on Wednesday to Peggy Bullard, the business manager for NCSS, from Shanta Wilson, chief financial officer of Challenge Charter, said the school had an arrangement worked out to pay off the debt in September 2012.
“Challenge Charter Academy had to purpose a payment plan that would pay down the debt. Currently the academy is paying $7,000 per month towards the outstanding debt as well as our monthly premium so that the liability does not increase,” Wilson wrote. “This plan has been in effect as of September 4, 2012 and now the balance is currently $116,477.57.”

According to Wilson, Project Adventure was the management company for Challenge Charter as of the 2010-2011 school year but now is no longer affiliated with Challenge Charter.

When Project Adventure departed, the academy was informed its state insurance was not paid by the management company.

“Stunned by this, Challenge Charter Academy had incurred a liability of $178,277.64 that is owed to the State Health Benefit Plan,” Wilson wrote. “Challenge Charter has had several discussions with the State Health Benefit Plan staff and they have been able to provide us with information on how this occurred.”

Erste provided the letter that was sent by the schools to DCH, which showed the academy’s payment plan.

“Challenge Charter Academy initially worked out a payment plan with DCH but when Mr. Covington (the person who handled the payment plan at DCH) left DCH, the remaining staff apparently didn’t know what was agreed,” Erste said.
To take care of the liability, the academy has contacted its general liability insurance company in hopes to be able to file a claim against Project Adventure for the $178,277.64 that was originally incurred, according to Wilson. She added that the State Health Benefit Plan will also be notified of its plan and the academy will continue to pay the $7,000 that the school has been allowed to pay since September until notified otherwise.

In addition to its insurance debt, Challenge Charter also is behind on its rent with the Cousins Community Center — a nonprofit that houses the academy in its building on Geiger Street.

Denny Dobbs, a board member with the Cousins Center, said the school owes about eight months of rent to the nonprofit, which amounts to around $48,000.

Dobbs said the center doesn’t have a full-time staff, and a board member who keeps the books with the nonprofit has been trying to get payments from the academy, but has been unsuccessful.

He said he didn’t know how the board would continue to go about gaining the payments.

“It looks like they’ve got problems with the state, they’ve got problems with the school board and they’ve got problems with us so… it doesn’t look very promising,” Dobbs said.

“It’s a shame because I think they do some good stuff.”

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