2013-14 Charter

Renewal Report
Perry Street Preparatory
Public Charter School

February 19, 2014

DC Public Charter School Board

3333 14th Street, NW, Suite 210
Washington, DC 20010
(202) 328-2660
www.dcpcsb.org

TABLE OF CONTENTS

FINDINGS AND RECOMMENDATION.................................................................................. 1

INTRODUCTION......................................................................................................................... 2
ANALYSIS .................................................................................................................................... 6
SECTION ONE: GOALS AND ACADEMIC ACHIEVEMENT EXPECTATIONS ............... 6
SECTION TWO: COMPLIANCE WITH APPLICABLE LAWS ........................................... 29
SECTION THREE: FISCAL MANAGEMENT AND ECONOMIC VIABILITY ................. 35

FINDINGS AND RECOMMENDATION

After reviewing the renewal application 1 submitted by Perry Street Preparatory Public Charter School
(Perry Street Prep PCS), as well as the schools record established by the District of Columbia Public
Charter School Board (PCSB), PCSB has determined that Perry Street Prep PCS, as a Local Education
Agency (LEA), did not meet its goals and student academic achievement expectations (academic
expectations).
Perry Street Prep PCS consists of one campus serving multiple grade levels: early childhood (prekindergarten-three through second grade), elementary and middle school (third through eighth grade),
and high school (ninth through twelfth grade), each with varying academic quality.
The analysis in Section One of this report supports that:

Perry Street Prep PCSs Early Childhood program has met its goals and academic expectations,
but with a decidedly mixed performance that included scoring in the lowest decile on the Early
Childhood PMF pilot for 2012-13;
Perry Street Prep PCS third through eighth grade program has fully met its goals and academic
expectations; and
Perry Street Prep PCSs high school has not met it goals and academic expectations.

In materials submitted to PCSB by the school, the school acknowledged weaknesses in its early
childhood program and committed to contract with a high-quality early childhood operator to deliver
educational services for its pre-school and therefore the renewal report memorializes this commitment. 2
Based on the above determinations, the PCSB Board voted 6-0 on February 19, 2014 to approve Perry
Street Prep PCS renewal application, on the conditions that:
1. The school close its high school at the end of the 2014-15 school year and lower its enrollment
ceiling accordingly at that time;
2. The school engages with a high quality early childhood operator, to be approved by PCSB,
beginning in the 2014-15 school year;
3. The renewed charter agreement contain a specific and quantitative goal around special education
compliance; and that
4. The renewed charter agreement contain a specific and quantitative goal around timely and
accurate submission of required data and documents to PCSB.

1
2

See Perry Street Prep PCS Renewal Application and Addendum, attached to this report as Appendix A.
See Official Perry Street Response to PCSB Staff Report, attached to this report as Appendix P.

INTRODUCTION
School Overview
Perry Street Prep PCS began operation in 1999 as Hyde Leadership Public Charter School (Hyde
Leadership PCS), under authorization of the District of Columbia Board of Education (DC BOE). As
originally chartered, Hyde Leadership PCS was managed by the Hyde Foundation, a private nonprofit
foundation with an emphasis on character development. In its first year in operation, the school offered a
fifth through ninth grade program, then expanded both its lower and upper grades each year until it
offered a pre-kindergarten through twelfth grade program.
In 2007, after the passage of the Public Education Reform Amendment Act dissolved the DC BOE,
PCSB became the authorizer of Hyde Leadership PCS. In June 2011, the PCSB Board voted to approve
a charter amendment petition from the school to end its affiliation with the Hyde Foundation, revise its
mission to focus on college preparation, adopt new goals and academic expectations, and change the
name of the school to Perry Street Preparatory Public Charter School. 3 In school year 2012-2013, one
year before the school was eligible to submit a renewal application, Perry Street Prep PCS submitted a
petition to amend its goals and student achievement expectations again. On July 29, 2013, after a public
hearing on June 24, 2013, the PCSB Board voted to approve the schools amended goals and
expectations. 4 Further detail about this amendment can be found in Section One of this report below.
Perry Street Prep PCS currently operates one campus with grades pre-kindergarten-three through twelfth
grade. For accountability purposes, PCSB separately evaluates three grade bands at Perry Street Prep
PCS: (1) pre-kindergarten-three through second grade, collectively referred to as the early childhood
program; (2) third through eighth grade, collectively referred to as its elementary and middle school;
and (3) ninth through twelfth grade, collectively referred to as its upper school or high school. 5
Information about each of these grade levels is included in the table below.
Ward
Early
Childhood
Program 6
Grades 3-8
Program
High
School

Year
Opened

1999

Grades
Served

2013-14
Enrollment

10-11
PMF

11-12
PMF

12-13
PMF

PK3 2

168

0 of 5
targets

2 of 4
targets

3 of 7
targets

38

294

35.6%
Tier 2

43.4%
Tier 2

47.2%
Tier 2

9 12

371

46.6%
Tier 2

37.6%
Tier 2

31.7%
Tier 3

See Board Proposal, Hyde Leadership Academy PCS Request for a Charter Amendment, dated June 20, 2011, attached to
this report as Appendix B; see also Letter to Mr. Joseph Fanone, Board Chair, Hyde Leadership PCS, from Brian Jones,
Board Chair, PCSB, dated June 28, 2011, attached to this report as Appendix C.
2
See PCSB Board Meeting Minutes, dated June 24, 2013, p. 1-2, attached to this report as Appendix D; PCSB Board
Meeting Minutes, dated July 29, 2013, p. 217-220, attached to this report as Appendix E.
5
This is consistent with the terms of the Second Amendment to the schools charter, attached to this report as Appendix F.
6
For years 2010-11 and 2011-12, accountability plans, and not the Performance Management Framework, were used as an
annual measure of early childhood program performance.

Previous Charter Reviews

The school has undergone three charter reviews since opening in 1999, as described below.
Five-year Charter Review
In 2002-03, the DC BOE conducted a charter review of the school and recommended that its charter be
continued, noting the schools strong academic performance and programmatic design. However, the
DC BOE also made several recommendations for improvement, including that the school undertake
significant repairs to its facility, execute bylaws, create a risk management plan, and, because the school
operated with a net asset deficiency, create a finance committee within its Board of Trustees. 7
Ten-year Charter Review
In 2006-07, as it transitioned from the DC BOE to PCSBs authorization, the school underwent a second
charter review, in which it was noted that the schools academic performance was strong and the school
had implemented an effective character development program. The review also included recommended
improvements, including that the school should address its high schools high attrition rate and also
improve its teacher attendance rate. 8
Additional Charter Review
In January 2012, after the school separated from the Hyde Foundation, PCSB conducted a third charter
review of the school. 9 PCSB found that the school had not met any of its Accountability Plan targets in
place at that time. Nevertheless, the PCSB Board voted to continue the schools charter. 10
2013-14 Renewal Process
On June 30, 2014, Perry Street Prep PCS charter will expire and it has submitted to PCSB an
application to renew its charter for a second fifteen-year term. The standard for charter renewal, as
established by the SRA, is that PCSB shall approve a schools renewal application, except that PCSB
shall not approve the application if it determines one or both of the following:
(1) The school committed a material violation of applicable laws or a material violation of the
conditions, terms, standards, or procedures set forth in its charter, including violations
relating to the education of children with disabilities; or

See Hyde Leadership PCS, 2002-03 Monitoring Report of Hyde Public Charter School, p. 6, attached to this report as
Appendix G.
8
This report was completed by a consulting firm, according to PCSBs review process in place at that time. The consultant
conducted the charter reviews that year for all schools transitioning from the DC BOE to PCSB. See Hyde Leadership PCS
Comprehensive Review Report, dated June 29, 2007, attached to this report as Appendix H.
9
As authorized by SRA 38-1802.12(a)(3).
10
See Board Proposal, Perry Street Preparatory PCS Candidacy for Charter Continuance, dated January 23, 2012, attached to
this report as Appendix I. It should be noted that during the term of the charter, when conducting a SRA-required charter
review, PCSB has the discretion to continue a charter even if it finds that the school has not met its goals and academic
achievement expectations. The SRA does not allow such discretion during the renewal process.

(2) The school failed to meet the goals and student academic achievement expectations set forth
in its charter. 11
Separate and apart from the renewal process, PCSB is required by the SRA to revoke a schools charter
if PCSB determines that a school (1) has engaged in a pattern of nonadherence to generally accepted
accounting principles; (2) has engaged in a pattern of fiscal mismanagement; and/or (3) is no longer
economically viable.
Given the SRAs standard for charter renewal, as well as PCSBs obligation to revoke a schools charter
if PCSB determines that the school engaged in fiscal mismanagement (as defined by the SRA), this
report is organized into three sections. Section One and Section Two are PCSBs analyses of the
schools academic performance and legal compliance, respectively, and serve as the basis for PCSBs
renewal decision. Section Three is an analysis of the schools fiscal performance, included so that if a
school is found to have met the standard for charter renewal but also found to have engaged in fiscal
mismanagement, PCSB staff can advise the PCSB Board accordingly.
PCSB renewal analysis and decision
PCSBs analysis supports that:

Perry Street Prep PCSs Early Childhood program has met its goals and academic expectations,
but with a decidedly mixed performance that included scoring in the lowest decile on the Early
Childhood PMF pilot for 2012-13.
Perry Street Prep PCS third through eighth grade program has fully met its goals and academic
expectations.
Perry Street Prep PCSs high school has not met it goals and academic expectations.

Additionally, PCSB found numerous instances of fiscal mismanagement, including findings on the
schools Single Audit relating to expenditures of federal grant dollars, and failure to comply with legal
requirements around the competitive bidding of procurement contracts. These issues, detailed below, do
not at this time rise to a pattern of fiscal mismanagement. Important to this determination is the schools
stronger, unqualified FY2013 audits.
However, if any future audits or other findings identify the schools nonadherence to GAAP and/or
fiscal mismanagement, such findings taken together with the findings described in this report could
rise to a pattern requiring revocation of the schools charter.
Based on the above determinations, the PCSB Board voted 6-0 on February 19, 2014 to approve Perry
Street Prep PCS renewal application, on the conditions that:
1)

11

The school close its high school at the end of the 2014-15 school year and lower its enrollment
ceiling accordingly at that time;

SRA 38-1802.12(c).

2)

The school engages with a high quality early childhood operator, to be approved by PCSB,
beginning in the 2014-15 school year;

3)

The renewed charter agreement contain a specific and quantitative goal around special education
compliance; and

4)

The renewed charter agreement contain a specific and quantitative goal around timely and accurate
submission of required data and documents to PCSB.

SECTION ONE:
GOALS AND ACADEMIC ACHIEVEMENT EXPECTATIONS
The SRA requires that PCSB shall not approve a charter renewal application if the school has failed to
meet the goals and academic expectations set forth in its charter. 12 Goals are general aims (usually
related to a schools mission), which may be categorized as academic, non-academic, and
organizational, whereas expectations are student academic aims measured by assessments. Goals and
expectations are only considered as part of the renewal analysis if they were included in a schools
charter, charter amendment, or accountability plans approved by the PCSB Board (collectively, the
Charter).
In July 2013, Perry Street Prep PCS amended its charter to adopt two goals related to its special
education students and English language learners, as well as goals and expectations related to three
separate PCSB Performance Management Frameworks (PMFs):

Early childhood PMF indicators as the goals and academic expectations for its early childhood
program;
Elementary/middle school PMF as the goals and academic expectations for its third through
eighth grades; and
High school PMF as the goals and academic expectations for its ninth through twelfth grades. 13

Consistent with PCSB policy, when a school adopts the PMF as its goals and academic expectations,
PCSB will assess whether a school has met its goals and academic expectations starting in the school
year that the respective PMF was formally adopted by the PCSB Board. As such, the Elementary/Middle
School PMF and the High School PMF are considered to be Perry Street Prep PCS goals and academic
expectations for its third through eighth grades, and ninth through twelfth grades, respectively, starting
in school year 2010-11. 14 Per PCSB policy and the schools 2013 amendment, each of these grade levels
will be deemed to have met their goals and academic expectations if it fulfills either or both of the
following:
(a) Demonstrates annual consistent improvement in performance on the PMF, with no PMF
score below 40% in the two academic years preceding its fifteenth year in operation; and/or
(b) Earns a PMF score of 45% or more in the two academic years prior to renewal assessment. 15

12

SRA 38-1802.12(c)(2).
See PCSB Board Proposal, Charter Amendment Request to Adopt the PMF as its Goals and Academic Achievement
ExpectationsPerry Street Prep PCS, dated July 29, 2013, attached to this report as Appendix J.
14
While PCSBs typical analysis of a school applying for renewal this year would start with the 2009-10 school year, given
the schools change in mission and management at the end of the 2010-11 school year as well as transition in leadership in
the middle of the 2011-12 school year, this renewal analysis starts in the 2010-11 school year.
15
See Appendix J.
13

Per the schools 2013 amendment, it adopted the Early Childhood PMF indicators as its goals and
academic expectations for its early childhood grades. However, consistent with PCSB policy, because
the Early Childhood PMF was in pilot status at the time the 2013 amendment was approved, the
amendment details that [PCSB]s assessment for charter renewal purposes of [Perry Street Prep
PCS] early childhood program for the 2010-11, 2011-12 and 2012-13 school years shall be based on
whether the [school] demonstrated annual consistent improvement in performance (as determined by the
selection of more meaningful goals over time and better student performance on those goals). 16
The chart below summarizes PCSBs determinations of whether each of the three academic programs
met their respective goals and academic expectations, as well as whether the school met its two other
goals. These determinations are further detailed in the body of this report.

1
2
3
4
5
6
7

10

11

16

Goals and Academic Expectations

Early Childhood
Perry Street Prep PCS will demonstrate annual consistent improvement in
performance in pre-kindergarten literacy progress.
Perry Street Prep PCS will demonstrate annual consistent improvement in
performance in kindergarten through second grade literacy progress.
Perry Street Prep PCS will demonstrate annual consistent improvement in
performance in kindergarten through second grade math progress.
Perry Street Prep PCS will demonstrate annual consistent improvement in
performance in kindergarten through second grade literacy achievement.
Perry Street Prep PCS will demonstrate annual consistent improvement in
performance in kindergarten through second grade math achievement.
Perry Street Prep PCS will demonstrate annual consistent improvement in
performance in pre-kindergarten attendance.
Perry Street Prep PCS will demonstrate annual consistent improvement in
performance in kindergarten through second grade attendance.
Third through Eighth Grades
Perry Street Prep PCS third-eighth grade program will demonstrate annual
consistent improvement in performance on PCSBs Elementary/Middle School
PMF, with no PMF score below 40% in the past two years; or earn at least 45% of
the possible points on the PMF for the two academic years prior to review.
Ninth through Twelfth Grades
Perry Street Prep PCS upper school (ninth through twelfth grades) will
demonstrate annual consistent improvement in performance on PCSBs High
School PMF, with no PMF score below 40% in the past two years; or earn at least
45% of the possible points on the PMF for the two academic years prior to review.
Subgroup Goals
All students with disabilities will make at least 5% growth in the areas of reading
and math on the district approved statewide assessment annually.
Eighty percent of non-proficient English Language Learners will make
improvements within their English language proficiency level as demonstrated on
the annual ACCESS exam, which measures students speaking, writing, reading,
and listening comprehension skills.

Met?
Yes
N/A
Partially
Yes
Partially
No
Yes

Yes

No

Partially

Yes

See Appendix F.

EARLY CHILDHOOD PROGRAM

Pre-Kindergarten-Three through Second Grade
Per the schools 2013 amendment, Perry Street Prep PCS adopted the Early Childhood PMF indicators
as its goals and academic expectations for its early childhood grades. Because the Early Childhood PMF
was in pilot status at the time the 2013 amendment was approved, the amendment details that
[PCSB]s assessment for charter renewal purposes of [Perry Street Prep PCS] early childhood
program for the 2010-11, 2011-12 and 2012-13 school years shall be based on whether the [school]
demonstrated annual consistent improvement in performance (as determined by the selection of more
meaningful goals over time and better student performance on those goals). 17
In accordance with the above standard, PCSB analyzed the schools performance in each Early
Childhood PMF indicator from 2010-11 to the present, determining for each (1) whether student
performance has annually and consistently improved; and (2) whether the school has selected more
meaningful i.e., more rigorous early childhood goals over time. 18
As shown in the table above, and as detailed below, of six applicable early childhood goals Perry Street
Prep PCS fully met three, partially met two and failed to meet one. A seventh goal was deemed nonapplicable as further described below.
Perry Street Prep PCS 2012-13 Early Childhood Performance on the Early Childhood PMF Pilot
Although PCSB determined that based on the above results that Perry Street Prep PCS has met its early
childhood goals as agreed to in its 2013 charter amendment, it should be noted that the schools 2012-13
performance on the pilot Early Childhood PMF (EC PMF) indicates that the schools early childhood
program is not strong. This pilot set a 60% floor for a school to be considered having met minimum
proficiency in each indicator. Perry Street Prep PCS missed four of the seven EC PMF minimum
thresholds.
To provide some context to the schools performance on the EC PMF pilot, 51 campuses participated in
the 2013 EC PMF pilot, and more than two-thirds met the 60% threshold for all indicators. Only three
campuses, including Perry Street Prep PCS, missed as many as four thresholds. Indeed, the schools
early childhood program was in the bottom tenth percentile of performance on the EC PMF pilot,
consistent with the schools trend since the 2010-11 school year of failing to meet the majority of its
early childhood targets.

17

See Appendix F.
While PCSBs typical renewal analysis includes a detailed analysis of the schools previous five years in operation, given
the schools change in mission and management at the end of the 2009-10 school year as well as its 2013 amendment to
adopt the PMF, PCSBs analysis of the schools early childhood performance begins in 2010-11, as opposed to 2009-10.
18

Early Childhood PMF Pilot

Benchmarks Met
3 of 7

7 of 7
benchmarks
66%

benchmarks
8%
4 of 7
benchmarks
6%
5 of 7
benchmarks
18%
6 of 7
benchmarks
2%

Analysis of Early Childhood Goals

Student Progress
Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance in
pre-kindergarten literacy progress. The school will be deemed to have met this goal if (1) student
performance has annually and consistently improved; and (2) the school selected more meaningful goals
over time.
Assessment: The school has met this goal. The school showed improved performance between 2010-11
and 2012-13 on a comparable goal. While the school did not select more meaningful goals over time, it
did select a goal in 2012-13 that was part of the EC PMF pilot program.

Year
20102011

20112012

201213

Perry Street PCS Pre-Kindergarten Literacy Progress

Annual Goal
Performance
70% of pre-kindergarten students will
score at or above grade level on
66.7% of students scored at or above grade level.
Brigance Developmental Inventory
Standardized Assessment
66.7% of students demonstrated growth or scored at
70% of pre-kindergarten-4 students will
least 90.
demonstrate 10 points of growth, or
This assessment is substantially different and less
score at least 90 points, by the spring
extensive than the assessment used by the school to
administration on the Brigance
measure Pre-K literacy progress in 2010-11 and
Preschool Screen II.
2012-13, making the results non-comparable.
60% of pre-kindergarten-3 and prekindergarten-4 students will progress to
age equivalency in literacy/language on
92.0% of students progressed to age equivalency.
the Brigance Developmental Inventory
Standardized assessment.

Renewal Standard
Did the school demonstrate annual consistent
improvement in performance?

Did the school select a more meaningful goal

over time?

Yes
While the school showed neither annual nor
consistent progress due to a change in assessment in
SY11-12, the school showed an increase in
proficiency from 2010-11 to 2012-13.
N/A
The 2011-12 assessment was less rigorous than the
2010-11 assessment; the school then switched back
to the 2010-11 assessment in 2012-13.

2013 EC PMF Goal Attainment (not a renewal standard) 19

Yes
Did the school meet the EC PMF
Perry Street Prep PCS exceeded this goals 60% minimum threshold
minimum threshold in 2012-13?
that was established by the EC PMF Task Force.

2. Goal: Kindergarten through second grade literacy progress. The school will be deemed to have
met this goal if (1) student performance has annually and consistently improved; and (2) the school has
selected more meaningful goals over time.
Assessment: This goal was determined to be not applicable to the analysis. Because the performance
standard changed each year, and because of missing raw data at the school, it was impossible to evaluate
whether student performance had annually and consistently improved. Further, while this goal did not
become more meaningful over time, the school did select a goal for 2012-13 that was part of the EC
PMF.

Year
2010-11

2011-12

2012-13

Perry Street PCS K-2nd Grade Literacy Progress

Annual Goal
67% of first- and second-grade students will demonstrate 10%
growth from the fall administration to the spring
administration in reading on the Terra Nova assessment.
70% of kindergarten through second-grade students will
advance at least one level, or score Low Risk, by the spring
administration on the DIBELS 20 assessment.
60% of kindergarten through second-grade students will
advance at least one level in reading on the DIBELS
assessment.
Renewal Standard

Did the school demonstrate annual

consistent improvement in
performance?
19
20

Performance

38% of first grade and 37% of

second-grade students
demonstrated 10% growth.
70.6% of students advanced
one level or scored Low Risk.
68.0% of students advanced
at least one level.

N/A
The schools performance decreased from 2011-12 to 2012-13,
however the standard was different. The school is unable to
produce raw data permitting an apples to apples comparison.

Attainment of the EC PMF goal is not a standard for renewal and is included in this report for illustrative purposes only.
Dynamic Indicators of Basic Early Literacy Skills (DIBELS) assessment.

10

N/A
Replacing the Terra Nova assessment with the DIBELS
assessment is not more meaningful; Terra Nova assesses a larger
number of literacy skills. However the goal adopted for 2012-13
was one approved as part of the Early Childhood PMF.

Did the school select a more

meaningful goal over time?

2013 EC PMF Goal Attainment (not a renewal standard)

Yes
Did the school meet the EC PMF
Perry Street Prep PCS exceeded this goals 60% minimum
minimum threshold in 2012-13?
threshold that was established by the EC PMF Task Force.

3. Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance
in kindergarten through second grade math progress. The school will be deemed to have met this
goal if (1) student performance has annually and consistently improved; and (2) the school has selected
more meaningful goals over time.
Assessment: Perry Street Prep PCS partially met this goal. It is impossible to assess annual
consistent improvement because 2012-13 was the first year for the school to adopt a math progress goal.
However the school did adopt a math goal, which was more meaningful than not having any math
progress goal in place.

Year
2010-11

Perry Street PCS K-2nd Grade Math Progress

Annual Goal
No math progress goal.

Performance
None

2011-12

No math progress goal.

None
60% of kindergarten through second-grade students will make
52.0% of students met this
2012-13
0 or greater NCE in mathematics on the Terra Nova
goal.
Assessment.
Renewal Standard
Did the school demonstrate annual
N/A
consistent improvement in
2012-13 was the first year that the school adopted a mathematics
performance?
progress goal.
Yes
Did the school select a more
It is more meaningful to have a math progress goal than to not have
meaningful goal over time?
one.
2013 EC PMF Goal Attainment (not a renewal standard)
No
Did the school meet the EC PMF
Perry Street Prep PCS failed to meet the goals 60% minimum
minimum threshold in 2012-13?
threshold that was established by the EC PMF Task Force.

11

Student Achievement
4. Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance
in kindergarten through second grade literacy achievement. The school will be deemed to have met
this goal if (1) student performance has annually and consistently improved; and (2) the school has
selected more meaningful goals over time.
Assessment: Perry Street Prep PCS has met this goal. The school submitted supplemental data 21 that
demonstrated consistent annual improvement over time. While the school did not select a more
meaningful goal over time it did adopt for 2012-13 a goal that was part of the EC PMF.
Perry Street PCS K-2nd Grade Literacy Achievement
Year
Annual Goal
Performance
The school only submitted data
70% of first and second-grade students will score in
2010-11
for 2nd grade students, of whom
the low risk range on the DIBELS assessment.
41% were proficient.
70% of first and second-grade students will score at or
60.0% of students scored at or
2011-12
above 50 NCE in reading on the Terra Nova
above 50 NCE.
assessment.
60% of kindergarten through second grade students
67.0% of K-2 scored proficient or
2012-13
will score proficient or higher in reading on the
higher in reading on DIBELS.
DIBELS assessment.
Renewal Standard
Yes
Did the school demonstrate annual
The school submitted supplemental data that show
consistent improvement in
improvement from 2010-11 to 2012-13 in the percent of
performance?
students rated low risk on DIBELS assessment from 55% to
67%.
N/A
Replacing the Terra Nova assessment with the DIBELS
Did the school select a more
assessment is not more meaningful; Terra Nova assesses a
meaningful goal over time?
larger number of literacy skills. However this assessment was
approved under the Early Childhood PMF.

2013 EC PMF Goal Attainment (not a renewal standard)

Yes
Did the school meet the EC PMF
The minimum threshold for this goal was established by the EC
minimum threshold in 2012-13?
PMF Task Force to be 60%. Perry Street Prep PCS exceeded this
threshold.

21

See Appendix P.

12

5. Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance
in kindergarten through second grade math achievement. The school will be deemed to have met
this goal if (1) student performance has annually and consistently improved; and (2) the school has
selected more meaningful goals over time.
Assessment: Perry Street Prep PCS partially met this goal. While it is impossible to assess annual
consistent improvement because 2012-13 was the first year for the school to adopt a math achievement
goal, adopting this goal was more meaningful than not having any math achievement goal in place.

Year

Perry Street PCS K-2nd Grade Math Achievement

Annual Goal
Performance

2010-11

No math assessment was given

None

2011-12

No math assessment was given

60% of kindergarten through second-grade
students will score at the 40th percentile or
higher in mathematics on the Terra Nova
assessment.
Renewal Standard

None

2012-13

Did the school demonstrate annual

consistent improvement in
performance?
Did the school select a more
meaningful goal over time?

50.0% of
students met
this goal.

N/A
2012-13 was the first year that the
school adopted a math achievement
goal.
Yes
It is more meaningful to have a math
achievement goal than to not have
one.

2013 EC PMF Goal Attainment (not a renewal standard)

No
The minimum threshold for this goal was
Did the school meet the EC PMF
established by the EC PMF Task Force to
minimum threshold in 2012-13?
be 60%. Perry Street Prep PCS did not
meet this threshold.

Leading Indicators
6. Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance
in pre-kindergarten attendance. The school will be deemed to have met this goal if (1) student
performance has annually and consistently improved; and (2) the school has selected more meaningful
goals over time.
Assessment: Perry Street Prep PCS has not met this goal. The schools pre-kindergarten attendance
rate did not improve consistently from year to year, and the school did not adopt more meaningful goals
over time: it did not set a goal regarding pre-kindergarten attendance in 2011-12.

13

Perry Street PCS Pre-Kindergarten Attendance

Annual Goal
Performance (prekindergarten only)
On average, pre-kindergarten through second Average Daily Attendance (ADA): 89.7%
2010-11
graders will attend school 92% of the days
In-School Attendance (ISA): 89.2%
ADA: 92.8%
2011-12
No attendance PK attendance goal
ISA: 92.2%
On average, pre-kindergarten-3 and preADA: 87.8%
2012-13
kindergarten-4 students will attend school
ISA: 84.8%
88% of the days
Renewal Standard
No
Did the school demonstrate annual
The schools pre-kindergarten attendance rate did not
consistent improvement in performance?
improve consistently from year to year.
No
Did the school select a more meaningful
The school had a combined attendance goal for PK-2 with a
goal over time?
higher threshold in SY2010-11 and did not set a PK
attendance goal in 2011-12.
Year

2013 EC PMF Goal Attainment (not a renewal standard)

No
Did the school meet the EC PMF
The minimum threshold was 88% ADA. The school missed
minimum threshold in 2012-13?
this threshold.

7. Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance
in kindergarten through second grade attendance. The school will be deemed to have met this goal if
(1) student performance has annually and consistently improved; and (2) the school has selected more
meaningful goals over time.
Assessment: Perry Street Prep PCS has met this goal. The schools kindergarten through second
grade attendance rate as measured by average daily attendance improved consistently from 2010-11 to
2012-13 while in seat attendance stayed flat. While the school did not adopt a more meaningful goal
over time the goal it did adopt was part of the EC PMF.
Perry Street PCS K-2nd Grade Attendance
Annual Goal
Performance
(grades K-2 only)
On average, pre-kindergarten through second
ADA: 89.8%
2010-11
graders will attend school 92% of the days
ISA: 89.3%
On average, kindergarten through second grade ADA: 88.7%
2011-12
students will attend school 92% of the days
ISA: 87.9%
On average, kindergarten through second grade ADA: 90.9%
2012-13
students will attend school 92% of the days
ISA: 89.2%
Renewal Standard
Did the school demonstrate annual
Yes
consistent improvement in
The schools kindergarten through second
performance?
grade average daily attendance rate
Year

14

Did the school select a more

meaningful goal over time?

improved by 1.1% and its in-seat

attendance rate stayed the same.
N/A
In 2011-12 and 2012-13 the school had
the same annual goal for K-2nd grade
attendance and in SY2010-11 had a
combined goal for PK-2. However this
assessment was approved under the Early
Childhood PMF.

2013 EC PMF Goal Attainment (not a renewal standard)

No
Did the school meet the EC PMF
The minimum threshold was 92% ADA.
minimum threshold in 2012-13?
The school missed this threshold.

15

2010-11 Early Childhood Performance Report

16

2011-12 Early Childhood Performance Report

17

2012-13 Early Childhood Performance Report

18

LOWER SCHOOL
Third through Eighth Grades
8. Goal: Perry Street Prep PCS third-eighth grade program will demonstrate annual consistent
improvement in performance on PCSBs Elementary/Middle School PMF, with no PMF score
below 40% in the past two years; or earn at least 45% of the possible points on the PMF for the
two academic years prior to review.
Assessment: Perry Street Prep PCS lower school has met its goals and academic expectations. Its
PMF score has consistently improved, and in 2011-12 and 2012-13 its PMF score was above 40% which satisfies the standard described below.
Standard to meet Elementary/Middle School PMF Goals and Academic Expectations
Per the schools July 2013 charter amendment, 22 Perry Street Prep PCS third through eighth grade
program will be deemed to have met its goals and academic expectations if it fulfills either or both of the
two following conditions:
(a)

Demonstrates annual consistent improvement in performance on the PMF, with no PMF

score below 40% in the two academic years preceding its fifteenth year in operation;
and/or

(b)

Earns a PMF score of 45% or more in the two academic years prior to renewal
assessment.

Perry Street Prep PCS Lower School has met its goals and expectations it fulfilled the first of the
above two renewal standards, with its PMF score consistently improving over three academic years, and
in 2011-12 and 2012-13 PMF scores above 40%. The schools Lower School PMF Scorecards are
detailed in full on the following pages of this report.

Perry Street Prep PCS Lower

School PMF Performance on
grades 3-8th grades

22

2010-11

2011-12

2012-13

35.6%

43.4%

47.2%

Tier 2

Tier 2

Tier 2

See Appendix F.

19

2010-11 Third through Eighth Grade PMF Performance Report

20

2011-12 Third through Eighth Grade PMF Performance Report

21

2012-13 Third through Eighth Grade PMF Performance Report

22

UPPER SCHOOL
Ninth through Twelfth Grades
9. Goal: Perry Street Prep PCS upper school (ninth through twelfth grades) will demonstrate
annual consistent improvement in performance on PCSBs High School PMF, with no PMF score
below 40% in the past two years; or earn at least 45% of the possible points on the PMF for the
two academic years prior to review.
Assessment: Perry Street Prep PCS upper school failed to meet its goals and academic
expectations. 23 It did not meet either of the renewal standards detailed below.
Standard to meet PMF Goals and Academic Expectations
Per the schools July 2013 charter amendment, 24 Perry Street Prep PCS--Upper School will be deemed
to have met its goals and academic expectations if it meets either or both of the two following
conditions:
(a)

Demonstrates annual consistent improvement in performance on the PMF, with no PMF

score below 40%; and/or

(b)

Earns a PMF score of 45% or more in the two academic years prior to review.

Perry Street Prep PCS high school has not met its goals and expectations because it did not meet either
of the above renewal standards. The schools High School PMF Scorecards are detailed in full on the
following pages of this report.

Perry Street Prep PCS Upper

School PMF Performance
2010-11

2011-12

2012-13

46.6%
Tier 2

37.6%
Tier 2

31.7%
Tier 3

23

While PCSBs typical renewal analysis includes a detailed analysis of the schools previous five years in operation, given
the schools change in mission and management at the end of the 2009-10 school year, as well as its 2013 amendment to
adopt the PMF, PCSBs analysis of the schools ninth through twelfth grade performance begins in 2010-11, as opposed to
2009-10.
24
See Appendix F.

23

2010-11 Ninth through Twelfth Grade PMF Performance Report

24

2011-12 Ninth through Twelfth Grade PMF Performance Report

25

2012-13 Ninth through Twelfth Grade PMF Performance Report

26

SUBGROUP GOALS
In its 2013 amendment, the school adopted two other goals one related to the academic
performance of its students with disabilities, and the other related to the reading proficiency of its
English language learners. For purposes of this renewal assessment, PCSB analyzed the performance of
the schools third through twelfth grades in determining whether the school had met these two schoolwide goals because there is no data available to assess the schools early childhood program.
10. Goal: All students with disabilities will make at least 5% growth in the areas of reading and
math on the district approved statewide assessment annually.
Assessment: Perry Street Prep PCS has partially met this goal. The school met the goal in reading
but did not meet the goal in math.
Overview of Schools Special Education Population
Perry Street Prep PCS serves a slightly higher proportion of students with disabilities (SWD) than the
charter sector average:

14.9% of Perry Street Prep PCS students have been identified as SWDs requiring special
education services.
13.3% of all DC students have been identified as SWDs requiring special education services.

However, 83.8% of the schools special education students are classified as Level 1 or Level 2,
which require a lesser level of special education services.
Percentage of students with disabilities identified at
each special education service level 25
Level 1 Level 2 Level 3 Level 4
Perry Street
29.8%
54.0%
6.5%
9.7%
Prep PCS
District of
36.1%
32.1%
11.5%
20.3%
Columbia
Special Education Reading and Math Proficiency
While the reading proficiency rate of Perry Street Prep PCS students with disabilities (SWD)
continues to be below the rate of the charter sector, the school met its goal of a 5% increase from 201112 (baseline) to 2012-13, experiencing a 10% rate increase in reading proficiency from 2011-12 to 201213.

25

Too few tenth grade special education students took the DC-CAS for their performance data to be reported separately.

27

Reading Growth
Percent of Perry Street Prep PCS
SWD Scoring Proficient or Advanced on
DC-CAS Reading
Met Growth Target?
(5% increase over previous year)

11-12

12-13

7.7%

8.5%
Yes
(8.1%)

The math proficiency rate of Perry Street Prep PCS students with disabilities is below the state average
and it did not improve its percent proficient by 5%; instead, the school experienced a decline of 8% from
its baseline performance in 2011-12 to 2012-13.
Math Growth
Percent of Perry Street Prep PCS
SWD Scoring Proficient or Advanced
on DC-CAS Math
Met Growth Target?
(5% Increase over previous year

11-12

12-13

10.8%

10.0%
No
(11.3%)

11. Goal: Eighty percent of non-proficient English language learners will make improvements
within their English language proficiency level as demonstrated on the annual ACCESS exam,
which measures students speaking, writing, reading, and listening comprehension skills.
Assessment: Perry Street Prep PCS has met this goal. 100% of the schools English language learners
(ELL) demonstrated improvement on the ACCESS exam from 2011-12 to 2012-13. 26
Overview of Schools ELL Population
Perry Street Prep PCS serves a significantly lower proportion of English language learners (ELL) than
the charter sector average:

0.4% of Perry Street Prep PCS students have been identified as ELLs.
8.8% of all DC students have been identified as ELLs.

Year

% of English language
learners whose ACCESS
exam score increased
from 2011-12 to 2012-13

2012-13

100%

Number of English
language learners
that both attended
the school and took
this assessment in the
prior academic year
10

Total Number of
ELL students

24

26

The school submitted ACCESS exam reports to PCSB, but they are not included in this reports appendices due to
concerns for student privacy.

28

SECTION TWO: COMPLIANCE WITH APPLICABLE LAWS

The SRA requires that PCSB shall not approve a renewal application if it determines that the school has
committed a material violation of applicable laws or a material violation of the conditions, terms,
standards, or procedures set forth in its charter, including violations relating to the education of children
with disabilities. 27 The SRA contains a non-exhaustive list of applicable laws, and PCSB also monitors
charter schools for compliance with additional laws in annual compliance reviews.
Since 2009-10, PCSB has found in its annual compliance reviews that Perry Street Prep PCS has been in
substantial compliance with all applicable laws detailed in the table below.
Compliance Item
Fair enrollment
process
SRA 38-1802.06
Notice and due
process for
suspensions and
expulsions
SRA 38-1802.06(g)

Student health and

safety
SRA 38-1802.04
(c)(4); DC Code 41321.02; DC Code
38-651

Description

Schools Compliance Status

2009-10 to present

DC charter schools must have a fair

and open enrollment process that
randomly selects applicants and does
not discriminate against students.

Compliant since 2009-10

DC charter school discipline policies

must afford students due process 28
and the school must distribute such
policies to students and parents.

Compliant since 2009-10

The SRA requires DC charter

schools to maintain the health and
safety of its students. 29 To ensure that
schools adhere to this clause, PCSB
monitors schools for various
indicators, including but not limited
to whether schools:
-

have qualified staff members that

can administer medications;
conduct background checks for
all school employees and
volunteers; and
have an emergency response plan
in place and conduct emergency
drills as required by DC code and
regulations.

Compliant since 2009-10

27

SRA 38.1802.12(c).
See Goss v. Lopez, 419 U.S. 565 (1975).
29
SRA 38.1802.04 (c)(4)(A).
28

29

Equal employment
SRA 38-1802(c)(5)

A DC charter schools employment

policies and practices must comply
with federal and local employment
laws and regulations.

Compliant since 2009-10

Insurance
As required by the
schools charter

A DC charter school must be

adequately insured.

Compliant since 2009-10

Facility licenses
DC code 472851.03(d); DC
regulation 14-1401

A DC charter school must possess all

required local licenses.

Compliant since 2009-10

High Quality
Teachers
Elementary and
Secondary Education
Act (ESEA)

DC charter schools receiving Title I

funding must employ Highly
Qualified Teachers as defined by
ESEA.

Compliant since 2009-10

Proper composition of
board of trustees
SRA 38-1802.05

A DC charter schools Board of

Trustees must have:
an odd number of members that does
not exceed 15;
a majority of members that are DC
residents; and
at least two members that are parents
of a student attending the school.

Compliant since 2009-10

Articles of
incorporation
and by-laws
SRA 38-1802.02(8)

A DC charter school must have upto-date articles of incorporation and

by-laws.

Compliant since 2009-10

Accreditation Status
SRA 38-1802.02(16)

A DC charter school must maintain

accreditation from an SRA-approved
accrediting body approved by the
SRA.

Accreditation by Middle
States Association of Colleges
and Schools in progress

February 2013 Notice of Concern

In February 2013 the PCSB Board issued a Notice of Concern to Perry Street Prep PCS, based on
significant discrepancies that emerged when the schools internal attendance records were compared
against the records submitted to ProActive. 30 The Board lifted the Notice of Concern in June 2013 after
30

See Board Action, Notice of Concern Perry Street Prep PCS, dated February 25, 2013, attached to this report as
Appendix K.

30

(1) a third attendance audit found five randomly selected records matched the ProActive attendance
data, and (2) corrections were made to all attendance records so that the schools truancy rate could be
calculated accurately. 31
DC CAS Testing Violations
In March 2012, OSSE engaged a consulting firm to investigate Perry Street Prep PCS for possible DC
CAS testing violations during the 2010-11 school year the last year that the school had operated as
Hyde PCS, and also the last year it partnered with the Hyde Foundation. 32
The investigators found that two instances of testing irregularities had occurred at Perry Street Prep
PCS: (1) the schools Test Security Plan was incomplete (required sign-in/out sheets necessary to
confirm the school had followed test security procedures were missing); and (2) two third grade
students each described in separate interviews that the same teacher improperly assisted students on the
exam. 33
The consulting firm classified Perry Street Prep PCS testing violations as critical, basing this
designation on [o]verall, the relative severity of the findings at [the school]. 34 Perry Street Prep was one
of only three schools in the District of Columbia to be identified as having a Critical testing violation,
of the 70 total schools that had been flagged for investigation. 35
E-Rate Program
Perry Street Prep PCS participates in the federal governments Schools and Libraries Program
(commonly known as the E-Rate Program), which provides discounts to schools telecommunication
and internet services. In 2013, the Federal Communication Commission Office of the Inspector General
(the FCC Inspector Generals office) issued a report regarding Perry Street Prep PCS compliance
with both federal laws and regulations regarding the E-Rate program. 36 In this report, the FCC Inspector
Generals office found Perry Street Prep PCS to be out of compliance with the FCC rules that relate
to (1) record retention and (2) maintenance of assets and inventory records related to E-Rate
disbursements during fiscal year 2009. 37 Because of these violations, the school was required to return
$1,255 to the FCC, as well as implement a corrective action plan to ensure future E-Rate violations
would not occur.
Procurement Contracts
SRA 38-1802.04(c)(1) requires DC charter schools to utilize a competitive bidding process for any
procurement contract valued at $25,000 or more, and within three days of awarding such a contract, to
31

See Appendix D.
See School Summary Report, Hyde Leadership PCS, 2011 District of Columbia Comprehensive Assessment System, Test
Security Investigation, p. 3-4, by Alvarez & Marshall, LLC, attached to this report as Appendix L.
33
See Appendix L, p. 3.
34
A critical designation means that test tampering or academic fraud have occurred. See OSSE 2011-12 DC-CAS Test
Integrity Presentation, p. 13, attached to this report as Appendix M.
35
See Appendix M, p. 14.
36
See Compliance Assessment Program Report, attached this to report as Appendix U.
37
See Appendix U, page 2.
32

31

submit to PCSB all bids received, the contractor selected, and the rationale for which contractor was
selected. To ensure compliance with this law, PCSB requires schools to submit a Determinations and
Findings form to detail any qualifying procurement contract that the school has executed.
From FY2009-2011, Perry Street Prep PCS submitted determination and finding forms for twelve
contracts valued at or above $25,000. In FY 2011, the school reported to PCSB 28 $25,000+
expenditures through annual reporting outside of the annual audits and submitted only one determination
and findings form, and in FY2012 the school did not submit a schedule of $25,000+ expenditures nor
any determination and finding forms. From the annual reports outside of the audits, it was unclear from
the schools submissions how many of these expenditures were procurement contracts required by the
SRA to be competitively bid. In an effort to reconcile the record on fiscal years 2011 and 2012 contract
submission, PCSB required Perry Street Prep PCS to submit documentation for expenditures identified
in their annual audits for those fiscal years. Perry Street Prep PCS identified 74 expenditures that were
procurement expenditures subject to the provisions of the SRA. Of those 74, 26 of the expenditures were
renewal contracts for which PCSB did not have the original contracts. Perry Street subsequently
submitted the required contracts for those expenditures for all but three expenditures; the remaining
three expenditures were not executed pursuant to contracts, but rather pursuant to invoices that
contained the terms and conditions of purchase which Perry Street Prep PCS provided to PCSB. As
such, Perry Street Prep PCS has reconciled the record. For fiscal year 2013, Perry Street Prep PCS was
in compliance with the contract and procurement requirements of the SRA. While fiscal years 2011 and
2012 appear to be anomalies in an otherwise history of compliance with the contract and procure
requirements of the SRA, PCSB cannot ignore the seriousness of these transgressions. PCSB hereby
notifies Perry Street Prep PCS that it considers these fiscal years of non-compliance the beginning of a
pattern of fiscal mis-management, and that if such non-compliance occurs again, particularly in the next
couple of fiscal years, PCSB will consider initiating revocation of the schools charter.

Special Education Compliance

Charter schools are required to comply with all federal and local special education laws, including,
among others, the Individuals with Disabilities Education Act 38 (IDEA) and the Rehabilitation Act of
1973. 39 The following section summarizes Perry Street Preparatory PCS special education compliance
from 2010-11 to the present.
References to Special Education in School Charter
References in a schools Charter to special education must comply with special education laws. Perry
Street Prep PCS description in its Charter of its special education programming complies with special
education laws.

38
39

20 USC 1413(a)(5).
20 USC 794.

32

OSSE Special Education Compliance Reviews

The DC Office of the State Superintendent of Education (OSSE) monitors charter schools special
education compliance and publishes three types of reports detailing these findings: (1) Annual
Determinations; (2) On-Site Monitoring Reports; and (3) Quarterly Findings. OSSEs findings of Perry
Street Prep PCS special education compliance are summarized below.
Annual Determinations
As required by federal regulation, OSSE analyzes annually each LEAs compliance with 20 special
education indicators, and publishes these findings in an Annual Determination report. 40 Each years
report is based on compliance data collected several years earlier. As such, OSSE does not require
schools to cure any compliance issues detailed in these reports. In 2012, OSSE published its 2010
Annual Determination reports (based on the schools 2009-10 performance). In this report, it found
Perry Street Prep PCS to be 62% compliant with these indicators, and designated the school as
Need[ing] Assistance, based on the schools compliance in school years 2009-10. 41
In August 2013, OSSE published its 2011 Annual Determination reports (based on the schools 2010-11
performance). It found the school to be 53% compliant with these indicators, and designated the school
as Need[ing] Intervention, based on the schools compliance in 2007-08 and 2008-09. 42
On-Site Monitoring Report
OSSE periodically conducts an on-site assessment of an LEAs special education compliance with
student-level and LEA-level indicators, and publishes its findings in an On-Site Monitoring Report. If a
school is found to be less than 80% compliant with a student-level indicator, it must implement
corrections and report these corrections to OSSE within 365 days.
In 2011-2012, OSSE published an on-site Compliance Monitoring Report of Perry Street Prep PCS,
finding the school to be less than 80% compliant in 27 of 28 student-level compliance indicators, and
less than 100% compliant in 9 of 26 LEA-level compliance indicators. 43
STUDENT-LEVEL COMPLIANCE

LEA-LEVEL COMPLIANCE

Compliance Area

Number of
indicators where
school was less than
80% compliant

Compliance Area

Number of
indicators
where school
was less than
100% compliant

Initial Evaluations
and Reevaluations

6 out of 6

Data Verification

1 out of 1

40

As required by federal regulation 34 CFR 300.600(c).

See FFY 2010 IDEA Part B LEA Performance Determination, attached to this report as Appendix N.
42
See Appendix N. OSSE assigns to each LEA one of the following Determination Level: (1) meets requirements, (2)
needs assistance, (3) needs intervention, or (4) needs substantial intervention.
43
If the school was found to be less than 80% compliant with a student-level indicator that was impossible for the school to
cure retroactively, OSSE would identify the point of noncompliance as an LEA-level violation as well. However, for
purposes of this report PCSB did not include as an LEA-level violation any such student-level point of noncompliance.
41

33

IEP Development
Least Restrictive
Environment
Discipline

10 out of 10

Dispute Resolution

0 out of 3

1 out of 2

Access to Instructional
Materials

0 out of 1

Fiscal

8 out of 21

Total

9 out of 26

2 out of 2

Data Verification

8 out of 8

Total

27 out of 28

As of October 2013, OSSE has verified that the LEA has implemented corrections for all student-level
violations that were possible to remedy retroactively, and that OSSE is still in the process of reviewing
some LEA-level corrections submitted by the school.
Quarterly Findings
OSSE submits quarterly reports to the U.S. Department of Educations Office of Special Education
Programs detailing District of Columbia LEAs compliance in three areas: (1) Initial and Reevaluation
Timeliness; (2) Early Childhood Transition Timelines; and (3) Secondary Transition Requirements.
In 2012 and 2013, OSSE found in all four of its Quarterly Findings reports that Perry Street Prep PCS
was noncompliant with federal law in providing secondary transition requirements. The LEA has
corrected the findings from the first three reviews, and has an August 2014 deadline to respond to FY13
Quarter One noncompliance finding regarding secondary transitions. 44

44

As per the OSSE DC Corrective Action Tracking System Database.

34

SECTION THREE:
FISCAL MANAGEMENT AND ECONOMIC VIABILITY
Separate and apart from the standard for charter renewal, the SRA requires that PCSB Board shall
revoke a schools charter if PCSB determines that the school:

Has engaged in a pattern of nonadherence to generally accepted accounting principles;

Has engaged in a pattern of fiscal mismanagement; or
Is no longer economically viable.

In the following section PCSB has analyzed Perry Street Prep PCS financial record in these areas.
While the school is economically viable, it has engaged in fiscal mismanagement. These issues, detailed
below, do not at this time rise to a pattern of fiscal mismanagement. Important to this determination is
the schools stronger, unqualified FY2013 audits.
However, if any future audits or other findings identify the schools nonadherence to GAAP and/or
fiscal mismanagement, such findings taken together with the findings below could rise to a pattern
requiring revocation of the schools charter.
Adherence to Accounting Principles and Fiscal Mismanagement
Audits of Perry Street Prep PCS federal funds establish that the school engaged in several incidents of
fiscal mismanagement. While the schools adhered to generally accepted accounting principles, material
weaknesses in internal control over financial reporting have been identified. These findings, detailed
below, do not at this time rise to a pattern of fiscal mismanagement.
Scope of Single Audits
A Single Audit is a federally-required audit that all entities expending in excess of $500,000 of federal
funds must conduct 45. Single Audits have two components: a review of the schools (1) internal control
over its financial reporting, and (2) its compliance with applicable laws and regulations in its
management of federal funds. 46 Single Audits identify any material weaknesses 47 or significant
deficiencies 48 in either of these components.

45

Per the federal Single Audit Act of 1984, as amended by the Single Audit Act Amendments of 1996, 45 any entity that
receives $500,000 or more in federal funding is required to undergo a Single Audit conducted by an independent, external
auditor, in accordance with the Office of Management and Budgets Circular A-133 (OMB A-133).
46
31 U.S.C.A 7502.
47
A material weakness is defined by PSP PCS auditor as a deficiency, or a combination of deficiencies, in in internal
control, such that there is a reasonable possibility that a material misstatement of the entitys financial statements will not be
prevented, or detected and corrected on a timely basis. See FY2013 Single Audit, p. 1.
48
A significant deficiency is identified by the auditor as existing when the design or operation of a control does not allow
management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct,
misstatements on a timely basis.

35

Overview of Perry Street Prep PCS Single Audit Findings

The chart below summarizes the schools single audit findings, and each finding is further detailed in
Appendix Q of this report. An auditor identified material weaknesses in the schools internal control of
financial reporting in FY2010, FY2011, and FY2012. 49
Auditors Findings of
Schools Internal Control over Financial Reporting
Qualified or
Material
Significant
unqualified
Year
weaknesses
deficiencies
auditors
identified?
identified?
report?
1
1
FY10 Unqualified
4
3
FY11 Unqualified
2
0
FY12 Unqualified
0
0
FY13 Unqualified
The school received a qualified report regarding its legal compliance related to federal awards in
FY2010 and FY2011, and the auditor identified material weaknesses in this area in FY2010, FY2011,
and FY2012.
Auditors findings of schools compliance
with applicable laws and regulations
in its management of federal funds
Qualified or
Material
Significant
unqualified
Year
weaknesses deficiencies
auditors
identified? identified?
report?
Qualified
1
0
FY10
Qualified
2
2
FY11
1
2
FY12 Unqualified
0
0
FY13 Unqualified
In two cases, the auditor identified similar findings related to the schools internal financial controls in
two consecutive fiscal years.

In FY2010 and FY2011, general ledger accounts were not reconciled on a monthly basis; and
In FY2010 and FY2011, no review and approval of journal entries was posted by the chief
operating officer throughout the year.

Required corrective action following single audit findings

Based on the schools FY2011 and FY2012 findings, OSSE required the school to take extensive

49

See Perry Street Prep PCS single audits, attached to this report as Appendix Q.

36

corrective action regarding its management of federal funds. The required corrective action can be
reviewed in full in Appendices Q and R to this report. 50
As part of this corrective action, Perry Street Prep PCS was required to repay $370,096 in federal Title I
grant money after it was identified in its FY2011 single audit that it had not met federal requirements
associated with this grant money. 51 The school submitted to the federal government estimates of its
employees hours to be charged to the federal programs rather than actual timesheets. This is disallowed
by the regulations promulgated by the federal Office of Management and Budget.
Economic Viability
Perry Street Prep PCS is economically viable, based on the schools financial performance,
sustainability, liquidity, and debt burden, as described below. 52
Financial Performance
PCSB assesses a schools financial performance with two key indicators. The first indicator is a schools
operating result how much its total annual revenues exceed its total annual expenditures. In general,
PCSB recommends that a schools annual operating results equal at least zero. Another indicator of a
schools financial performance is its earnings before depreciation (EBAD) 53, a financial performance
measure that eliminates the effects of financing and accounting decisions.
The schools performance according to these two indicators was impacted by two separate events. First,
in FY2009, as the school transitioned from Hyde Leadership PCS to Perry Street Prep PCS, the school
invested in updating its academic program. Second, the school leased and moved into a new building in
FY2011, which caused its building and grounds expenses to increase by approximately $1.8 million
(from $1.1 million in FY 2010 to $2.9 million in FY 2011). This increase included several expenditures,
such as paying for the schools move into the newly leased building, constructing a building addition,
and paying an outstanding $500,000 rent payment that the school had unintentionally not previously
posted.
Given these expenses, the school has had fluctuating operating results and EBAD from FY 2009 to
present. However, its financial performance was strong, with the school producing a $2.1 million
operating surplus in FY2012 and $1.8 million operating surplus in FY2013. Perry Street Prep PCS had
positive earnings before depreciation in three of the past five fiscal years, including the most recent
FY2013.

50

See October 1, 2012 letter from Iris Bond Gill, OSSE Director of Federal Grants Compliance to Shadwick Jenkins, Perry
Street Prep PCS Head of School, attached to this report as Appendix R; see also September 25, 2013 letter from Dr. Unique
Morris, OSSE Deputy Director of Grants Management and Compliance, to Shadwick Jenkins, Perry Street Prep PCS Head of
School, attached to this report as Appendix S.
51
See Appendix Q; see also December 7, 2012 letter from Iris Bond Gill, OSSE Director of Federal Grants Compliance to
Board of Directors of Perry Street Prep PCS, attached to this report as Appendix T.
52
See Perry Street Preparatory PCS, Activities and Financial Analysis Sheet, attached to this report as Appendix O.
53
EBAD is the change in net assets plus amortization and depreciation.

37

Fiscal
Period
Operating
Result
EBAD

2009

2010

2011

2012

2013

$(490,534)

$1,639,264

$(1,692,618)

$2,075,710

$1,787,693

$(300,196)

$1,836,254

$(935,021)

$3,278,133

$2,888,370

Expenditures
Perry Street Prep PCS spending decisions, illustrated in the graph below, are aligned with PCSBs
financial metrics for general education public charter schools. 54

PERRY STREET PREPARATORY PCS

Expenditures as % of Revenues (FY2013)

Personnel costs

65%

15%

Occupancy expenses

8% 11%

Direct student costs

General and administrative expenses

0%

20%

40%

60%

80%

100%

Sustainability
A schools net assets 55 and primary reserve ratio demonstrate its sustainability. 56 PCSB recommends
that schools accrue net asset reserves equal to three to six months of operating expenditures and PCSB
would be concerned with net assets reserves below zero. In FY2013, the schools net asset reserves of
$8.6 million equaled approximately 6.9 months of operating expenditures (the schools monthly
expenditures are approximately $1.3 million).
The schools FY2013 primary reserve ratio was 0.57, meaning that its net asset reserves equals 47% of
its annual expenditures, an improvement from FY2012. The table below details the schools net assets
and primary reserve ratios over the past four years.
Fiscal Period
Net Assets 57
Primary Reserve
Ratio

2009
$4,551,999

2010
$6,191,263

2011
$4,498,645

2012
$6,845,921

2013
$8,603,107

0.38

0.51

0.32

0.47

0.57

54

Note that the percentage does not equal 100% because revenue exceeded expenditures in fiscal year 2013.
Net Assets equals total assets minus total liabilities.
56
Primary Reserve Ratio equals total net assets divided by total annual expenses.
57
Note that there were beginning balance readjustment in fiscal year 2012 due to a liability account error, which understated
the beginning net assets by $271,566.
55

38

Liquidity
Two indicators of a schools short-term economic viability are its current ratio 58 and its days of cash on
hand. 59 A current ratio greater than one indicates a schools ability to satisfy its immediate financial
obligations. Since FY2009, Perry Street Preparatory PCSs current ratio has been at least one (except for
FY 2011), indicating that the school can meet its short-term financial obligations with current assets.
Typically, 90 days or more of cash on hand indicates a school can satisfy immediate obligations with
cash. Less than 30 days of cash on hand is a liquidity concern. Perry Street Prep PCS days of cash on
hand have fluctuated over the last four years, with the schools days of cash on hand decreasing from 38
days in 2009 to zero days in FY2011 and increasing to 46 days in FY2012. At the end of FY2013, the
schools days of cash on hand stood at 75 days. The schools current ratio and days of cash on hand
trends are detailed in the table below.
Fiscal Period 2009
Current Ratio 1.8
Days of Cash
32
on Hand 60

2010
12.4

2011
0.9

2012
2.1

2013
1.9

18

46

75

Cash flow from operations indicates whether a school produces adequate cash flow to meet its operating
needs. Since FY2010, Perry Street Prep PCS has maintained positive cash flow from operations with
about $4.0 million in FY2013, as detailed in the below table.
Fiscal Period
Cash Flow from
Operations

2009

2010

2011

2012

2013

$(874,143)

$1,250,710

$687,939

$3,775,722

$3,975,811

Debt Burden
A schools debt ratio 61 indicates the extent to which a school relies on borrowed funds to finance its
operations. A debt burden ratio in excess of 0.92 is a source of concern to PCSB. Perry Street Prep
PCS debt ratio climbed to 0.75 in FY2010, but remained relatively stable over the last three fiscal years.
Fiscal Period
Debt Ratio

2009
0.16

2010
0.75

2011
0.81

2012
0.74

2013
0.69

58

Current assets divided by current liabilities. Current refers to the 12 months or normal operating cycles that a school can
convert certain assets into cash or use up or settle certain obligations.
59
Cash on hand equals unrestricted cash and cash equivalents divided by total expenditures divided by 360 days.
60
Because there was no breakdown for unrestricted and restricted cash in FY2009, total cash was used.
61
Debt ratio equals total liabilities divided by total assets.

39