Will LACOE Pull The Plug?

“North Valley Military Institute (NVMI) has failed to respond to all reasonable inquiries, failed to provide prior written notification of any source of additional funding that may result in incurring additional debt, failed to provide evidence that the school fully met all payroll obligations since February 16, 2023, and currently has not maintained the required minimum three (3) percent reserves of the Charter School’s Adopted Budget for the fiscal year.”

– Los Angeles County of Education

Reporting on the North Valley Military Institute over the past few months has felt like bearing witness to the creation of a black hole. As the organizational failures continue to multiply, it becomes more likely that the charter school will not survive and will eventually suck millions of taxpayer dollars into a vacuum. The students will be the victims of unfulfilled promises, searching for new schools as “Superintendent” Mark Ryan moves on to his next endeavor. Will it be with another charter school affiliated with Jerry Brown?

The latest bombshell to fall into my email inbox is an accusation from a tipster claiming that Coty Brice Tschappat, the former NVMI administrator who had been accused of committing “abhorrent child sex abuse” against NVMI students was not only a roommate of Ryan, but is also his godson. It was also alleged that the “Superintendent” hired Tschappat without “alerting anyone, such as filing a nepotism form”.

While only one person is making this accusation, it does seem to follow a pattern of behavior by NVMI’s “Superintendent.” In fact, Ryan’s propensity to act first and get permission from the Board of Trustees after the fact has been joked about by those board members during past meetings. The latest example of the board’s failure to provide proper oversight was on display during the past couple of weeks.

First, a draft Rental Agreement with Los Angeles Mission College also appears to have been rubber-stamped by the Trustees at a chaotic meeting on May 10. Despite being told that a written form of the document did not exist, they voted to approve it. This negated any chance for them to perform any real oversight.

At that same meeting, the Trustees voted unanimously to approve a budget that Ryan had created and needed to be submitted to LACOE by the following Monday. They took this action despite the fact that:

• The budget was incomplete and Ryan stated that he would be making changes before the submission.
• The school still has not signed a lease for a new facility. Since the executive committee had agreed (without a formal vote) to reject the LAUSD’s offer for space under PROP-39, it still has no idea where classes will be held.
• The budget includes the assumption that the school will receive another $1.7 million from the federal government for an Employee Retention Credit (ERC) related to COVID, in addition to the $1.3 that it already received. It had been previously acknowledged by Ryan that the IRS is reviewing this application.

Instead of insisting that a special meeting be held to formally adopt the budget after it was complete, the trustees asked for an informational meeting to be held at Noon on Monday, May 15, 2023, so that they could be given a copy. There was no plan for what would happen if they did not like the changes that were presented to them as it was specifically stated that no vote would be scheduled. Ryan was basically given a blank check.

At the follow-up meeting, Ryan said that the budget was still not finished, that calculations were still being made and it would be subject to change until the moment it was turned in. After stating, incorrectly, that since the meeting was purely informational, it did not have to follow the Brown Act, the Board’s Chairman, Dr. Daniel Villanueva, declared that no discussion would be allowed.

Without having to worry about anyone on the Board of Trustees taking a serious look over his shoulder, Ryan has been spending money like a drunken sailor. The expenditures that have pushed the school into deficit spending include:

• The school will spend $27,791.18 on this year's graduation ceremony at CSUN’s Grand Hall. According to the California Department of Education, there are 81 students in the 12th-grade class. Therefore, the cost per student is $343.10 just for the CSUN-related costs.
• David Tokofsky was paid $16,000 to lobby on behalf of the school in an effort “to advocate with LAUSD leadership and board members for a long-term facilities solution for NVMI.” The only positive outcome of Tokofsky’s efforts was a single “no” vote in a failed effort to block a multi-site offer in response to NVMI’s PROP-39 request.
• During 2012, NVMI paid Velocity Government Relations $3,000 per month “for Washington, DC, advocacy services.” The lobbying firm maintains access to “decision makers who oversee the space and defense industry.” It appears to have no expertise in the field of education.
• Ryan made a trip to Washington D.C. to personally lobby for support for the failed effort to move the school to the California National Guard facility in the Sepulveda flood control basin.
• A contract signed with Synergi Partners commits NVMI to pay a 15% contingency fee for all ERCs that the school receives from the federal government. This will total $ 450,000 if the school receives all of the money it has included in its budget. According to the contract, “Synergi DOES NOT provide tax advice, tax filings, or CPA services. Synergi is not a tax preparer or accountant and therefore explicitly disclaims any and all responsibility for [the] preparation of a Client’s federal and state tax returns. Synergi will not render or be required to render any service that could be interpreted as the practice of accounting.”

The Los Angeles County Office of Education (LACOE) has expressed levels of concern worthy of Susan Collins during the time it has served as NVMI’s authorizer. The latest of several official notices was delivered on April 12, 2023, over “Violation of Law and Memorandum of Understanding.” These included repeated failures to provide the office with requested information.

The financial instability of the school, including difficulties in meeting payroll obligations, should not be surprising to LACOE given that it received an unsatisfactory rating in Fiscal Operations just before the county board overturned the LAUSD’s decision to reject NVMI’s charter renewal. Governance and Organizational Management were both rated as less than proficient at that time. With indications that none of these have improved, an ineffectual governing board, and bleak prospects at being able to begin the next school year, it is time for LACOE to pull the plug. In order to protect the students, parents, and staff at this school along with taxpayers, the county needs to act as quickly as possible.

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Carl Petersen is a parent advocate for public education, particularly for students with special education needs. He was elected to the Northridge East Neighborhood Council and is the Education Chair. As a Green Party candidate in LAUSD’s District 2 School Board race, he was endorsed by Network for Public Education (NPE) Action. Dr. Diane Ravitch has called him “a valiant fighter for public schools in Los Angeles.” For links to his blogs, please visit www.ChangeTheLAUSD.com. Opinions are his own.