EDUCATION
MARICOPA CHARTER SCHOOL ENROLLMENT SINCE 2020
financials who allowed InMaricopa to review documentation of their claims. Edkey administration had also failed to pay into the Arizona State Retirement System since September. The leadership admitted this issue and said it had resumed payments in January. Edkey in September reported a $2.7 million deficit and just 43 days of operating cash, “which fell below the days of cash on hand requirement,” according to a U.S. Securities and Exchange Commission filing. Median cash on hand among charter schools then was 128 days. Edkey did not inform bondholders of the issue, as required under Arizona state law. They admitted the violation in a December filing. That budget shortfall was an improvement from the $7.7 million deficit reported in 2021 but still placed Edkey on shaky ground. The organization also missed bond interest payments, placing them in forbearance. Metcalfe said bondholders were involved in the decision and that payments have since resumed. Heads will roll Former Edkey CEO Mark Plitzuweit and CFO Juan Beltran were fired in November for financial mismanagement, the corporation said. Public records revealed the officers had entered into high-interest “factoring” loans— agreements likened to payday loans — without board approval. These deals sold state funding receivables at approximately 68 cents on the dollar, saddling Edkey with $234,000 in weekly repayments. These arrangements, however, have been around for several years, with Plitzuweit discussing them publicly six years ago. “My whole goal is to get away from [factoring loans] and get to a fiscally sound place,” Plitzuweit told The Arizona Republic in 2019. Evidently, he did not. Reasons for Beltran’s firing were more nebulous, but still financial in nature, according to the corporate board in filings and interviews. “There were discoveries made about payables, generally, upon termination of the CFO,” Edkey’s Corporate Board President Mary Gifford told InMaricopa in December. Becki Krueger, an independent consultant, “has endeavored to put all the pieces together and work diligently to make sure the payables are addressed timely.” Krueger is completing an audit for the fiscal year ending in mid-2024. Gifford said the state retirement system was “one of those payables that we did address very timely after the termination of the CFO.” Edkey’s financial strain has been exacerbated
Metcalfe in a statement. The EdKey board is being responsive to a report by an outside financial consultant from September 2024 and is considering proposals from “multiple companies to provide a variety of services to EdKey,” all with the goal of righting the struggling charter school system with 6,300 students across the state. Alumni society, don’t bother Despite the hurdles she has faced this semester, Nott said she remains determined to graduate. Her parents’ sacrifices have allowed her to continue the program at CAVIT, where she has already logged 700 of the 1,000 hours needed for her cosmetology license. Some of her Sequoia Pathway classmates were not lucky enough to have such parental resources. “I would honestly encourage [future students] to do it. It’s a really good program for high school students,” Nott said of CAVIT. But when asked about Sequoia Pathway specifically, her advice was starkly different. “If it was at Pathway, I probably would tell them not to do it.”
Lianna Nott rides in the passenger seat of her dad’s car to her trade- school courses in Coolidge since Sequoia Pathway suddenly stopped bus service there in January.
“The board has discussed this agreement since Mr. Plitzuweit’s dismissal, and both Mary Gifford and Dr. Yovhane Metcalfe were aware of these developments,” the person said. Metclalfe denied this claim. Gifford “has not participated in board meetings, conversations or written communi- cation regarding efforts to seek and consider proposals from multiple service providers,” said
millions in state education funds to benefit themselves.” The AZCSA alleges Edkey earned $12 million from the Prenda partnership “while Edkey provided no curriculum or instruction to the students.” Then, the corporation “went on a $136 million shopping spree,” anticipating the Prenda money would keep flowing as it built a new school in Buckeye and bought Caurus Academy in Anthem. It did not. “Edkey’s ability to make its bond payments and even to stay in business is in serious question after relying on fraudulence practices that put millions into their pockets while providing no educational services to thousands To get a handle on its current financial instability, Edkey is considering several outside consultants to help manage the struggling budget. InMaricopa has reviewed a Transition Services Agreement between Edkey and Accel Schools, a charter school management organization. This agreement would provide advisory services, although Metcalfe said the document was a draft. Critics have raised concerns about potential conflicts of interest, as Edkey’s corporate board president, Mary Gifford, is an executive vice president for Accel. “This situation raises serious questions about conflicts of interest,” an Edkey employee said of the woman who heads Edkey’s corporate board and its would- be management company. The employee spoke to InMaricopa on the condition of anonymity, citing a fear of losing his job. Gifford is involved in these discussions, according to a person with firsthand knowledge of the conversations. of homeschooled students,” Hall said. Transition services agreement
split that $8,000-per-student taxpayer fee and filter students to a less-regulated microschool curriculum with “guides” instead of teachers. Edkey was cleared in the investigation. “Our partnership with regulated, licensed education institutions was recently reviewed by the Arizona Charter Board and the Arizona Attorney General’s office,” Prenda said in a statement to InMaricopa . “We were happy to cooperate with these inquiries, as they represented an opportunity for Prenda to demonstrate how seriously we take our responsibilities to the communities in which we live, learn and work. We are likewise happy to report that both the Charter Board and the Attorney General gave us a clean bill of health and we look forward to continuing our working relationships with both.” The following year, however, Arizona passed the Universal Empowerment Scholar- ship Account, allowing microschool parents to collect $7,000 from the state directly. In September 2023, Edkey’s enrollment had dropped 42% compared to that month in 2022, losing 3,200 online students who had been enrolled at Prenda. On Aug. 14, 2023, Edkey reported enrollment was 4,057, but only 1,084 students actually showed up. “Edkey isn’t needed as a middleman anymore,” said Jim Hall, the researcher for Arizonans for Charter School Accountability. “Edkey ... operated one of the most lucrative educational scams in the nation by laundering
Edkey’s ability to make its bond payments and even to stay in business is in serious question.” JIM HALL, ARIZONANS FOR CHARTER SCHOOL ACCOUNTABILITY
by a significant decline in enrollment. According to InMaricopa ’s analysis of Arizona Department of Education data, Sequoia Pathway is the only charter school in Maricopa to lose students over the past four years, shedding half its population since 2020. In that same time period, Maricopa Unified School District has seen a 33% increase in its student population. Charter school advocates say “the money follows the students.” Each student who attends a charter school, like Sequoia Pathway, brings with them $8,000 of Arizona taxpayer money. As that student population drops, it strains Edkey’s already stretched budget, making recovery more difficult. The beginning of the end? Outside of the financial issues, Edkey’s education model courts controversy. In April 2021, the Arizona Attorney General’s Office launched an investigation into Edkey and its relationship to the Mesa- based “microschool” company Prenda. Under the agreement, Prenda and Edkey would
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InMaricopa.com | February 2025
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February 2025 | InMaricopa.com
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