Anna Phillips is a staff reporter at GothamSchools.
A Brooklyn charter high school with a long history of financial difficulties is being put on probation for one year, city education officials announced Friday.
Williamsburg Charter High School, which opened in 2004, is one of three schools operated by the Believe High School Network. It had been under investigation by the office of Attorney General Eric T. Schneiderman of New York for several months because of questions about its financial management. On Friday, as a result of that investigation, the Department of Education sent a letter to Lourdes Rivera-Putz, chairman of Williamsburg Charter's board of trustees, saying the school was being put on probation for violating state law, as well as its own charter.
In the notice, the city said Williamsburg Charter entered into a management deal with the Believe network before it had sought the required approval from the city's charter school office. Under that deal, the school paid Believe $2.34 million in management fees last year — well above the citywide average — at a time when the school was heavily in debt and could not cover its rent or consistently pay its bills. As of last year, its expenses came to $15.5 million and its revenue was $13.7 million, the majority of which was public money.
The school reacted to its deficit by laying off teachers in the middle of the school year. Officials at the city's charter school office had "serious concerns regarding the financial stability" of the school, according to the letter.
The city also said that half of the school's board members had conflicts of interest. Three on the six-member board are employed either by the Believe network or the two other schools the network manages: Believe Northside Charter High School and Believe Southside Charter High School. One of those board members is Edward Calderon-Melendez, who served as both a school trustee and the chief executive of the Believe network.
Williamsburg Charter was authorized and opened by the city's Department of Education, but the other two Believe schools were granted charters by the state.
"We are aware of the issues at these schools and have been working collaboratively with the attorney general and the New York City D.O.E. to address those issues," Jonathan Burman, a spokesman for the state's Education Department, wrote in an e-mail. "We expect to take appropriate action shortly."
The probation will mean that Williamsburg Charter, which had about 870 students in grades 9 through 12 last year, could face closure if it does not follow the city’s recommendations.
The city's charter school office recommended that Williamsburg Charter end its relationship with the Believe network and stop paying management fees by October 31 of this year.
Requests for comment sent to Mr. Calderon-Melendez were not returned, but a lawyer for the school said officials were "disappointed" about the city's decision to place them on probation, and also said that the state had given them "retroactive" approval for the management arrangement with the network.
"We are therefore confident that this matter will be resolved promptly," said Sharon McCarthy, the lawyer.
The city also cited the school for not having a parent association, which is required under charter school law. In 2010, the school's graduation rate was 54 percent.