In a development with multiple layers of irony, Oxford Preparatory Academy has filed suit against its founder, the educator whose learning formula provided the building blocks for the academic success the much celebrated school achieved before imploding last year.
That lawsuit comes little more than two weeks before Oxford is due to make a do-or-die presentation to the California Advisory Commission on Charter Schools in Sacramento in a last-ditch effort to forestall its demise and renew its charter beyond the end of the current school year.
The collapse of Oxford Preparatory Academy, which now taints the legacy of its founder, Sue Roach, coming as it does after its students soared to the heights of scholastic achievement over an extended period, is a saga of near-Sophoclean proportion.
In the early 2000s, Roche had been the principal at Rhodes Elementary School, the highest-performing school in the Chino Valley Unified School District consistently over a number of years. With the backing of Chino Valley Superintendent Wayne Joseph, Roche submitted a proposal to create a charter academy, which the school district’s board of trustees supported. Gambling more than $3 million toward the concept, the district opened Oxford Academy at the shuttered El Rancho Elementary School, located at the corner of C Street and Oaks Avenue in Chino, after having rejected establishing the campus at the former Los Serranos Elementary School site in Chino Hills. Utilizing Roche’s formula of a rich curriculum, old-fashioned book learning, intensified classroom focus and heavy doses of parental involvement, Oxford exceeded all expectations.
In 2011, students at Oxford Preparatory Academy collectively outperformed their counterparts at every other elementary and junior high school in San Bernardino County, as measured by their score on California’s Standard Testing And Reporting exams. They repeated the feat in 2012 and 2013. Known by the acronym STAR, the tests provide an academic performance rating or index, known as API, for second through 11th graders in every class, and at every school and district in the state. The tests measured students’ progress toward achieving California’s state-adopted academic content standards in English–language arts, mathematics, science, and history/social science. The results were used, until 2014, for student and school accountability purposes. Oxford had an Academic Performance Index (API) score of 958 in 2011 and improved to 972 in 2012.
Enthusiasm for the Oxford undertaking was so high, that the number of student applicants to attend the school routinely outran the number of desks and classroom space for them by as much as 600 per year, requiring that the district hold a lottery as a means of granting admission to it. Even more significantly, Joseph had to take the extraordinary step of forging a memorandum of understanding between the district and Oxford Preparatory, preventing the academy from poaching the district’s highest performing teachers. That memorandum of understanding prohibited district teachers from taking a leave of absence from the district to teach at the charter school. The charter school was also tasked with the responsibility of providing special education services.
Under California law, charter schools are sponsored by a public school district and are supported by taxpayer funds but a autonomy, within certain parameters, to carry out its educational mission in compliance with its declared educational goals and according to its curriculum approved by the sponsoring school district’s school board. Each charter school has its own internal corporate board, which is independent of the district board. Charter schools are not given indefinite license to operate, but are chartered for a defined number of years. To continue beyond that point they must have their charter extended.
In December 2011, the Chino Cally Unified School District’s board unanimously extended Oxford’s charter for five years, from 2012-13 through 2016-17.
In the meantime, Roche expanded the Oxford model, convincing the Capistrano Unified School District to sponsor another campus, the Oxford Preparatory Academy in Mission Viejo. Roche transferred Jason Watts, who had been the principal at Oxford Preparatory Academy in Chino to Mission Viejo, where he served as the Mission Viejo’s inaugural principal/chancellor.
At the Mission Viejo campus, students rang up an impressive 993 academic performance score on the 1,000-point maximum index during the first year the school was open.
As 2016 began, it would have appeared unthinkable that the Chino Valley Unified School District would not renew the academy’s charter for 2017-18 and the four school years beyond that, with the time to do so approaching. Oxford was an exquisite feather in the district’s cap.
But in the shadows away from the limelight of the academy’s spectacular scholastic accomplishments, Roche had taken action which would redound to destroy her reputation and not simply tarnish but very likely extirpate the academic gem she had polished to near perfection.
After basking in accolades accompanied by parental enthusiasm for an academic system in a public setting that rivaled or exceeded the educational opportunities that exist in private schools in which parents would typically pay tuition exceeding $10,000 per year per student, Roche resolved to cash in on the institution she had created. A first step she took in that direction consisted of incorporating Edlighten Learning Solutions, identified as a “charter management company,” was incorporated in August 2012.
Roche withdrew from the position of executive director of Oxford Preparatory’s corporate entity and promoted Barbara Black to that position, while assuming an undefined administrative role in the academy. She then arranged to have Oxford contract for the administrative services she was providing not directly with her but through, Edlighten Learning Solutions, a for-profit entity in which she is the central figure and prime mover.
Upon Roche’s direction, Black had Oxford Charter Academy enter into a contractual arrangement to pay Edlighten $5.3 million to, essentially, employ Roche as the school’s contract administrator and operations director over the next four years.
With the date for the school board’s determination with regard to renewing Oxford’s charter approaching last spring, Joseph learned of what Roche had done. Roche was, Joseph became convinced, seeking to exploit the non-profit Oxford Preparatory Academy and line her own pockets. He publicly accused Roche of creating and then engaging in a financial conflict of interest which would have the effect, he implied, of shortchanging Oxford Preparatory’s students while enriching herself. Roche had engaged in “arrogance, overreach and greed” in the administration of the academy which victimized Oxford’s students and parents, Joseph told the school board, while employing “machinations” by which she fired dedicated educational professionals or otherwise advanced herself. Roche, the superintendent said, was cynically relying upon the reputation Oxford had attained and was manipulating the academy’s reliance on consultants, of which she was the primary one, to profit. In compliance with Joseph’s recommendation, the school board declined to renew Oxford’s charter.
Initially, Oxford’s internal board asserted the school district’s action was unjustified but then regrouped and terminated its relationship with Roche and Edlighten in May 2016. It then appealed the district’s decision to the county school board and San Bernardino County Superintendent of Schools Ted Alejandre, but the county school board declined to take any action, maintaining that by changing its management structure, the proposal that Chino Unified had rejected no longer existed, and that what had been rejected no longer existed and thus could not be reestablished through appeal. Oxford then turned to the State Department of Education, seeking to get a charter from it. In the meantime, Alejandre had made a request for an audit.
The Fiscal Crisis & Management Team, an adjunct to the California Department of Education, carried out that audit and in early December delivered a 45-page audit summary and report, highlighting the conclusion that Roche’s action may have crossed the line into criminality. The audit cataloged how Roche created a system that involved Yorba Linda-based Edlighten and another entity, the Nevada corporation Educational Excellence, in dodging accountability through what was characterized as a “daisy chain” of payments between for-profit companies which employed her family, friends and associates. Roche purposefully hid or obscured financial transactions and operations in such a way that the auditors, not to mention Chino Valley Unified officials and even Oxford’s own in-house employees could not easily track them, according to the audit report. Ultimately, public school funding was diverted to bank accounts controlled by Roche and her associates, according to the audit. Oxford Preparatory, Edlighten and Educational Excellence employed several of Roche’s relatives, including her husband Terry, daughter Rebecca Baty, son Brian Roche and cousin Nick Califato, all of whom were paid through the organization
“Interviews indicate that following the petition renewal in 2012, the founder created a complex structure of charter management corporations that exercised significant influence over transactions and contracts between these entities, and secured considerable financial benefit through contracts that charged management service fees up to 10 percent, funneling charter school dollars from Oxford Preparatory Academy schools,” the audit report states, such that Oxford was charged “for services that already existed.”
Oxford Preparatory paid Edlighten $4.2 million in management fees between January 2013 and June 2016, according to the audit. Those numbers were steadily growing, from $821,490 in 2013, $1.2 million in 2014 and $1.3 million in 2015. Edlighten was on track to take in more than $2 million from the academy in 2016, when Edlighten’s contract with Oxford was terminated in May. Because of that, Edlighten received payments of just $834,522 in 2016.
Roche’s actions were both deliberate and calculated, the auditors opined, and they said there was “sufficient evidence that affiliated and/or related party organizations were intentionally created to divert and launder funds from Oxford Preparatory Academy.”
In response to the audit and its eroding public position, Oxford Preparatory Academy greatly altered the blanket denials of wrongdoing it had issued nearly eight months previously.
“We concur that the Fiscal Crisis & Management Team findings are of great concern,” Oxford Preparatory Board Member Michael Delgado said in December a message to parents of students at the school. “The current Oxford Preparatory Academy board and administration had no knowledge of Mrs. Roche’s inappropriate expenditures and had zero authority over the way in which Edlighten spent its funds. News of this apparent mismanagement of funds – specifically the Fiscal Crisis & Management Team’s allegations of money laundering by [Edlighten] – is shocking and disappointing to all of us. The current board and administration were kept in the dark about the activities during Mrs. Roche’s tenure and outraged by the revelations in the Fiscal Crisis & Management Team report. Oxford Preparatory Academy has already implemented numerous changes to address many of the issues that have been raised.”
Delgado said the matter involving Roche should not detract from Oxford’s reputation for academic excellence or curtail its mission to offer a top-notch education to students. “In the classroom, our results speak for themselves,” Delgado said.
The academy redoubled its effort to extend its charter. In doing so, it distanced itself yet further from Roche. The academy’s board members long-associated with Roche stepped down and were replaced. Barbara Black, who had reflexively sought to defend the academy when the board denied the petition for charter renewal last year by insisting that there was “nothing out of the ordinary” or improper in the arrangement Oxford had in its contractual relationships with Edlighten and Educational Excellence, was forced out as executive director. She has been replaced, at least temporarily by Denise Pascoe, who holds the title of interim executive director. Pascoe is being assisted by Andrew Crowe, who is serving in the capacity of interim managing director. The reconstituted board put into place policies banning nepotism and conflicts of interest while intensifying oversight and tightening internal financial controls.
On January 31, Oxford provided to the Chino Valley Unified School District a report on its own internal investigation into the matter which accounted for some, though not all, of the financial diversion that took place. In that report, Oxford laid out that Roche had been the recipient of $125,435.39 in payments that had not been authorized by the academy’s board. The academy claimed it had succeeded in recovering $15,900 of that amount from Roche. Oxford reported that it was seeking full reimbursement of the remaining $109,535.39 from Roche. Two weeks ago, on March 17, it went even further, filing a lawsuit in Orange County Superior Court against her and Edlighten Learning Solutions.
The lawsuit alleges breach of contract, breach of fiduciary duty, negligence, and violations of business and professions code Section 17200.
Calling what Roche had engaged in a “scheme,” Pascoe said, “Oxford Prep alleges that Edlighten Learning Solutions and Sue Roche violated the trust of our teachers, parents and students, charter authorizers and the public causing damage to our school’s reputation and community. We have an obligation to pursue corrective actions and hold those responsible for wrongdoing accountable.”
Roche’s attorney said, “The lawsuit is simply a breach of contract argument concerning whether Oxford Ppreparatory Academy’s charter management organization, Edlighten, provided all of the services due to the academy under the contract between Enlighten and Oxford. It does not concern Sue Roche because she was not a party to the contract. She was improperly named as a defendant, which will be corrected. Moreover, the contract required arbitration, not litigation, and so the entire lawsuit is improper.”
According to Greenberg, “The lawsuit does not concern any issues of restitution. The money you mention [the $125,435.39 in payments the academy’s board now says it did not authorize and which Oxford is seeking to recoup] concerns a bonus that Oxford Preparatory Academy’s accounting department issued to Ms. Roche before her retirement. Oxford has discovered that while the board conducted Ms. Roche’s annual review and she was told she would receive a bonus, the amount of the bonus was never formally voted upon by the board after Ms. Roche’s departure. This is an error on the part of the woman that took over as executive director of Oxford. However, there are countervailing issues – for example, the fact that Ms. Roche was not paid for more than 200 days of work as executive director and pursuant to Ms. Roche’s employment contract, she is entitled to receive health care coverage for life. Ms. Roche requested a mediation with Oxford Preparatory
Academy and the mediation was conducted yesterday. The parties worked cooperatively to address various old and dated issues and will meet again in the next few weeks to hopefully complete its efforts and resolve things amicably.”
The demise of Oxford Charter Academy rests entirely on the shoulders of the schoold district and Joseph, Greenberg said.
“The district’s issue is that it is trying to destroy its competition for students by denying Oxford Preparatory Academy its charter and thereby taking back the students and the money that the state provides to educate those students,” Gteenberg said. “Oxford did too good a job competing with the district and as a result Oxford Preparatory Academy’s students’ success became an embarrassment for Wayne Joseph and the Chino Valley School District. Sadly, Oxford’s students are paying the price for the success of Sue Roche’s teaching method and her approach of valuing each child. Rather than learn from Oxford Preparatory Academy’s successful methodology, the Chino Valley School District would rather destroy it.” –Mark Gutglueck