Pa. investigating another charter school

The Pennsylvania Department of Education is investigating the finances of Agora Cyber Charter School in response to parents' complaints, becoming the third government agency reviewing operations at the Devon-based school.

A team of state officials, including the department's top lawyer and two auditors, spent a day in mid-March at the cyber school's administrative headquarters reviewing documents and interviewing staff, including the founder of the 4,400-pupil school, Dorothy June Brown. Brown could not be reached for comment.

State officials followed up with a visit two weeks later to Brown's business offices in Bala Cynwyd, and continue seeking information related to Agora's operations, sources with knowledge of the investigation said.

Representatives of the Pennsylvania Coalition of Charter Schools, which represents 120 of the state's 127 charters, said the level of state scrutiny was unusual.

Federal criminal investigators and the Philadelphia School District's inspector general also are examining Agora's finances.

The department began the probe in response to complaints parents filed with the agency in December questioning whether the fees that Agora was paying to Brown's consulting group, Cynwyd Group L.L.C., were appropriate and priced fairly.

The education-management company has a contract with Agora and owns its headquarters on Chestnut Street in Devon. Brown, who initially was Agora's chief executive officer, is Cynwyd Group's senior consultant to the cyber school and an ex-officio member of the charter board. Under that contract, Brown's company could be paid as much as $2.8 million this school year.

State law gives the Education Department oversight responsibility for the state's 11 cyber charter schools, which provide online instruction to students in their homes.

Agora, which enrolls students in kindergarten through high school from across the state, is also part of a widening federal criminal probe of area charter schools, according to other sources. The school has received a federal subpoena, and federal agents have spoken to Brown at least twice since May.

Brown is the founder of three traditional charter schools in Philadelphia and was the CEO of two of them until last summer. The school district's inspector general is investigating those schools - Laboratory Charter School in Northern Liberties and Overbrook; Ad Prima in Overbrook; and Planet Abacus in Tacony, according to sources with knowledge of that probe.

Howard Lebofsky, chairman of Agora's board, said he had been contacted by the Department of Education and knew representatives had visted the Devon office and requested information.

"As far as I know, they have the information they requested," he said. "That's the last I heard of it."

In January, Brown and Cynwyd Group took the unusual step of suing six Agora parents, including those who had complained to the state, for slander, libel and civil conspiracy. The Agora Parent Association also complained to the state and is named in the suit.

Albert S. Dandridge 3d, a lawyer who has represented Cynwyd Group in the past, declined to comment on the investigation or say whether he still represents the education management company.

The state team included auditors, representatives from the state charter office, and Judy Shopp, the department's chief counsel. Shopp declined comment and referred questions to the department's communications office.

Said Michael Race, a department spokesman: "We are in the midst of the investigation. Beyond that, there's nothing I can say."

The inquiry focuses on how much Agora pays Cynwyd Group and what the consulting firm's duties are, the sources said.

Under Agora's nine-year lease with Cynwyd, the charter pays $25,000 per month for about 12,000 square feet of space for its office in Devon and is responsible for the utilities, insurance, and maintenance.

Agora's 2008 annual report to the state said the school hired Cynwyd in May 2006 to manage and operate the charter's administrative and educational facilities. The school pays the company a management fee of 7 percent of the school's total revenues.

Based on current enrollment, Agora officials project that the cyber charter's revenues will total about $41 million in taxpayer funds this school year. They did not respond to e-mailed requests to confirm that the Cynwyd Group is expected to receive $2.8 million of that amount.

Lebofsky, the Angora board chairman, has said Cynwyd performs many duties, including providing "expert advice and guidance in all areas of school operations," and serving "as the board's 'eyes and ears' regarding school operations, educational programs, academic performance, and other important matters."

The company also prepares the school's annual budget, provides recommendations for hiring teachers, and is responsible for training staff, he said in an e-mail.

Brown established the Cynwyd Group with Brien N. Gardiner in November 2005, state records show. Two years later, the company paid $1.9 million for the Devon property used by Agora.

Gardiner, the founder of Philadelphia Academy Charter School, severed his ties with Cynwyd Group in May, according to his attorney. Gardiner took the step shortly after he was fired from his consultant's position at Philadelphia Academy, when that charter was rocked by allegations of financial wrongdoing, nepotism, and conflicts of interest.