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Millions Of Dollars Owed To State By Failed Charter Schools

The state may be out more than $67 million that it will never be able to collect from failed charter schools and other businesses.

Millions of taxpayer dollars in Central Ohio are missing, and chances are the state will never get them back.

Much of the money is attributed to failed charter schools, such as Harte Crossroads, which opened in the former Columbus City Center mall in 2004.

The school’s former director, Anita Nelam, said in 2004 that "If we're going to be successful with kids, we need to make sure that we're hitting them where they live. Not where we grew up.”

Three years later, Nelam was fired for mismanagement. That closed Harte Crossroads and forced students and families to find new schools.

The closure prompted an investigation by the state, but record keeping was so bad Ohio’s Auditor declared the school un-auditable. Eventually auditors determined the school misspent more than $3 million, and wanted that money back.

The process is called “finding for recovery.”

“That represents misspent money, missing money, stolen money,” said State Auditor spokeswoman Carrie Bartunek.

The state auditor investigates any office that handles public dollars, including schools, cities, townships, counties and other government agencies.

Watchdog 10 analyzed the auditors “recovery of finding” database, which calculated close to $67 million that’s supposed to be paid to financial reserves. However, a loophole has allowed millions to go uncollected.

"Twelve-point-four million dollars is beyond the statute of limitations, which is six years. So, the bottom line is we have $54.4 million that could be recovered," Bartunek said.

Unless a finding has been reduced to a court judgment, it drops off after six years, which is what happens to many of the smaller debts.

If a county prosecutor declines to go after the money, it's up the Attorney General.

The state auditor said only $12 million of the $67 million owed has been collected since 2001, and Ohio Attorney General Mike DeWine said he isn’t satisfied with that number.

“I don't think anybody should be satisfied with that," DeWine said.

While DeWine said his office is aggressive in collecting, many times the people in debt do not have anything to give.

Watchdog 10 analysis showed $9 million is owed by people in central Ohio, much of it by failed charter schools.

The High Life Youth Community School owes $626,000 and a group of nine charter schools under the same ownership owe more than $720,000.

Auditors are attempting to collect $2.4 million from Harte Crossroads School’s founder Nelam, who now lives in South Carolina.

However, Nelam said she doesn’t have any money to pay and doesn’t feel like she should have to pay it.

In a statement to Watchdog 10, Nelam wrote:

"While I can understand that the state was unable to clearly track the schools (sic) expenditures, I reject their conclusion that 2.4 million dollars was misspent.”

Nelam said she regrets not keeping better records during her time at Harte Crossroads.

The building where Harte Crossroads was housed has been torn down to make room for Columbus Commons, which left taxpayers the bill for millions in misspent money that will likely never be repaid.      

Watch 10TV News and refresh 10TV.com for more information.