Mortellus
Apr 21, 2011
Financial disclosures revealed substantial payments to an accounting firm co-owned by a sitting Board member, highlighting questions about financial oversight, contracting practices, and transparency in publicly funded charter schools.
What happened: An April 2011 investigation by NC Policy Watch (now NC Newsline) revealed that Thomas Jefferson Classical Academy had paid substantial sums to Acadia Northstar, an accounting and administrative services company co-owned by then-TJCA Board member David Faunce.
According to the Academy's nonprofit tax filings, TJCA paid Acadia Northstar:
$95,526 during the fiscal year ending June 2009 for accounting and administrative services.
$85,994 during the fiscal year ending June 2010 for business services.
Together, these payments totaled $181,520 over two fiscal years.
The investigation raised questions about potential conflicts of interest arising from a governing Board member maintaining a financial interest in a company receiving payments from the institution he helped oversee.
The reporting also examined the broader role of Acadia Northstar in North Carolina's charter-school system. Faunce stated that the company provided accounting, governance training, grant writing, and student-testing reporting services to approximately 80 of the state's 99 operating charter schools at the time.
What was established: NC Policy Watch identified payments to Acadia Northstar through TJCA's publicly available tax documents and confirmed Faunce's ownership interest in the company and his position on the Academy's Board.
Faunce acknowledged the business relationship and stated that he recused himself from votes concerning contracts or other business involving his company. He defended Acadia Northstar's pricing, arguing that its services were competitive and that contracting with outside accounting firms could be more economical than maintaining equivalent services internally.
The investigation also identified broader financial transparency concerns within North Carolina's charter-school system. According to Joel Medley, then-acting director of the state's charter-school office, charter schools were not subject to the same state purchasing requirements governing traditional public-school districts.
The North Carolina Department of Public Instruction did not maintain a centralized accounting of how much public money charter schools collectively paid Acadia Northstar. Faunce declined to disclose the company's total revenue from its charter-school clients, citing business confidentiality.
These circumstances highlighted limitations in the public's ability to independently examine vendor relationships, compare contracting costs, and evaluate potential conflicts involving charter-school governing boards.
What was not established: The investigation did not establish that TJCA's payments to Acadia Northstar were unlawful, excessive, or the result of improper contracting practices.
Although Faunce's simultaneous roles as Board member and company co-owner presented questions about potential conflicts of interest, the reporting did not establish that he participated in votes involving his company or violated applicable conflict-of-interest requirements.
His assertion that he recused himself from relevant votes was reported, but the investigation did not independently establish whether all required disclosures, recusals, or other safeguards were documented and followed.
The reporting also did not establish that Acadia Northstar's services were unnecessary, that the company received preferential treatment, or that TJCA could have obtained equivalent services at a lower cost.
Original evidence:
NC Policy Watch (now NC Newsline) — More on Our Charter School Investigation: TJCA Board Member Doing Business with School, April 21, 2011
NC Policy Watch (now NC Newsline) — Charter's Conservative Backers Raise Questions, April 20, 2011
Thomas Jefferson Classical Academy — Historical IRS Form 990 Filings, ProPublica Nonprofit Explorer
The original investigation attributed the payment figures to TJCA's tax filings. Additional records, including the underlying contracts, procurement documentation, conflict-of-interest disclosures, and relevant Board minutes, have not yet been independently obtained for this archive.
Subsequent developments: Additional reporting in 2011 identified David Faunce as a member of the North Carolina Alliance for Public Charter Schools' Board, further documenting his involvement in statewide charter-school advocacy while maintaining a financial interest in a company providing paid services to charter schools. The extent and duration of TJCA's subsequent financial relationship with Acadia Northstar remain unclear, including whether the Academy continued contracting with the company after the transactions identified in the original investigation.
TJCA Truth welcomes historical contracts, financial statements, board minutes, conflict-of-interest disclosures, and other records that may help establish how long the relationship continued, how contracts were approved, and what safeguards governed business dealings involving Board members.
Report from the community: No independent firsthand accounts from TJCA families, employees, or community members specifically concerning the Academy's financial arrangements with Acadia Northstar have yet been obtained by TJCA Truth. The original reporting preserves statements from then-Board member David Faunce, who addressed questions concerning his business relationship with the Academy and defended the arrangements described in the investigation. TJCA Truth welcomes additional perspectives from former Board members, administrators, employees, and others with firsthand knowledge of Acadia Northstar's work for the Academy, including how contracts were awarded, services were evaluated, and potential conflicts of interest were handled. Contributors may request anonymity, and private correspondence will not be published without permission.