Agora Cyber Charter School seeks to halt state hearing

A week after filing a flurry of lawsuits to save its operating charter, an online charter school based in Devon yesterday asked U.S. District Court to halt a state hearing that could lead to its closing.

"A temporary restraining order and preliminary injunction are necessary . . . to stop the abuse of power by an agency and officials of the Commonwealth of Pennsylvania and to prevent the destruction of a successful cyber charter," Agora Cyber Charter School said in court documents.

The school, which enrolls 4,400 students statewide who receive online instruction at home, also asked the court to order the state to return its funds so it can pay its mounting legal bills, as well as money owed to an education-management company owned by the school's founder, Dorothy June Brown.

Since late April, the Pennsylvania Department of Education has diverted all of Agora's local, state, and federal money to an escrow account to prevent it from flowing to Cynwyd Group L.L.C., Brown's firm.

Department spokesman Michael Race declined to comment on Agora's filing. Joel L. Frank, an attorney for Agora, said the court documents spoke for themselves.

The Education Department, which oversees the 11 cyber charters in Pennsylvania, alleges that Agora's board of trustees violated the terms of the school's operating charter by contracting out management services.

After an investigation into Agora's financial management this year, begun in response to parents' complaints, the department concluded that the board's actions were ground for revoking the school's five-year operating charter.

A two-day revocation hearing was scheduled for next month in Harrisburg. Regardless of the outcome of that hearing, state officials have said they expect Agora would continue to operate through the end of the coming school year.

In court documents seeking to halt that hearing, Agora said Education Department officials knew of the school's management contract with Cynwyd Group "for years" but did not object until April.

Cynwyd was to be paid $2.8 million from Agora's $41 million budget this academic year. However, according to the state, most of the management work was subcontracted to, and performed by, yet another company, K12 Pennsylvania L.L.C.

In a related matter, Cynwyd Group last week filed suit in U.S. District Court against K12, charging that the for-profit company breached its contract with Cynwyd.

Since Agora's funds have been diverted to an escrow account, the state has allowed K12 to pay the school's educational expenses, including teachers' salaries. But court documents allege that K12 owes Cynwyd more than $2 million from that fund as well as other sources.

The contract between the management firms lists the priorities for paying Agora's expenses. Any fees due the state are to be paid first. Next, K12 is supposed to pay Cynwyd its 7 percent management fee, followed by Agora's legal expenses.

Teachers' salaries are 10th in line after such other expenses as rent and administrators' travel costs.

K12, based in Herndon, Va., yesterday called the allegations in Cynwyd's suit "baseless and completely without merit." In a statement, K12 charged that Cynwyd's lawsuit appeared to be a hasty reaction to the Education Department's findings. Clifford E. Haines, an attorney for Cynwyd, declined to comment on the suit.

Agora's finances also are being scrutinized by the Philadelphia School District inspector general and by federal investigators as part of a general criminal probe of local charter operations.

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