New London — The state Department of Education has placed the Interdistrict School for Arts and Communication on probation after an investigation determined massive rate hikes to outside districts for special education costs were unjustified.

The billing issue was not the only problem revealed during the investigation. The charter middle school will be on probation for one year for failing to follow state statute in “billing for special education and 504 plan services, lack of governing board oversight of the billing, improper disposal of computer and other technology equipment and failures to make necessary school policy and procedure updates.”

ISAAC school families were notified by the school of the action this week and in a letter dated May 24 from acting Commissioner of Education Charlene Russell-Tucker.

The investigation started in January upon receipt of numerous complaints regarding not only the billing issue but transparency of school policies and personnel-related issues. An investigation was conducted by the state Department of Education’s Turnaround Office and Office of Internal Audit.

In November, ISAAC had sent memos to the six school districts that send special education students, notifying them that rates for instruction and counseling services would rise from $45 and $47.50 per hour to $90 per hour.

The move raised red flags in the New London school district, which has 40 of the 54 special education students being instructed at ISAAC. New London School Finance Director Rob Funk said special education costs would have risen from $480,000 to $850,000, something not accounted for in the school budget. He said the increase was unreasonable without an explanation of the methodology and the school board agreed not to pay the increased costs.

The state investigation determined that based on the increased costs, ISAAC stood to realize a profit of an estimated $893,196 for the 54 special education students. Under state statute, school districts are only required to pay a charter school “an amount equal to the difference between the reasonable costs of educating each student and the sum of the amount received for the state charter school grant,” and other state and federal grants.

ISAAC receives $11,250 per student through the state charter school grant program for a total of $607,500 for the 54 special education students. Combined with bills to the school districts sending students, ISAAC stood to gain revenue of more than $2 million, while costs were estimated to be only $1,114,304.

ISAAC indicated that the rate increase was due to deficits from the previous year. Invoices also appear to charge districts for an hourly rate for each student even during co-taught instruction, when more than one student is being taught by the same teacher. The school was unable to provide documentation to support the previous year’s deficit or the methodology to determine the new $90 per hour rate, the state concluded in its investigative report.

ISAAC issued a memo in December dropping the rates to $60 per hour for New London and $70 per hour for other districts. State investigators said no explanation for the rates was given.

The state has ordered ISAAC to cease billing of districts for the cost of special education for the remainder of the school year, given it has collected enough to cover its expenses. To date, state education officials said ISAAC has yet to provide documentation to support its special education billing rates and could not find approval of the increased rates in meeting minutes from ISAAC’s board of directors meetings.

The school also was told to discontinue the practice of billing districts for the cost of 504 plan services, which are developed for students with disabilities. Charter schools are responsible for costs of 504 plans and the investigation found ISAAC had billed schools $3,877 from September through December.

The state also investigated the sale of school-purchased MacBook laptops to teachers without cleaning them of potentially sensitive information or having school administration access removed.

ISAAC had replaced the MacBooks with grant-funded Windows-based computers in 2020. The state investigation found that not all computers were cleaned of sensitive material and that school policy requires equipment be sold to school employees only if they are also offered to the general public. ISAAC also did not properly document the disposal of the laptops and other electronic equipment.

The state has told the school to contact all employees who purchased the MacBooks to take necessary steps to ensure sensitive information, school access and other school-purchased software is removed.

The school is required to submit a corrective action plan by June 22. The plan will be developed in consultation with state staff. ISAAC’s board of directors must adhere to specified provisions, make interim filings and participate in relevant technical assistance required by the state.

In addition, ISAAC will come before the State Board of Education’s Accountability and Support Committee in September to provide progress updates. The CSDE Turnaround Office will attend a minimum of two ISAAC board meetings and conduct an on-site school visit this spring. 

“CSDE has adopted policies over the years that have strengthened oversight of the governance and management of charter schools to ensure they remain accountable and are fulfilling their responsibilities to their students and families,” Department of Education Director of Communications Peter Yazbak said.

“We’re committed to ensuring that our focus remains on doing what’s in the best interest of students and look forward to supporting ISAAC as the school works to submit and deliver on its corrective action plan,” he said.

The news of probation comes less than a year after the state Board of Education granted the school a three-year renewal of its charter and several changes to top leadership positions were made. Nicholas Spera, the controversial former principal at the Marine Science Magnet High School in Groton, was hired by ISAAC in January 2020 and serves as executive director.

Spera and ISAAC board Chairman Richard Muckle responded to the news of the probation in a joint statement.

“For the past year, our school has made incredible strides towards improving our school for the betterment of our staff, students, and families in the area of teaching and learning,” the statement reads. “With all of these advances in teaching and learning, we are now in need of additional improvements in other areas, as identified by the State Department of Education. Although some of these issues have existed for several years, the Board of Directors and our current leadership team are eager to ‘get it right’ for the betterment of ISAAC now and in the future.”

Spera and Muckle, in the statement, said the school already has begun to take corrective actions and said the goal is to make the corrections during the upcoming summer months “so that we will return to good standing with CSDE as soon as possible.”

The state Board of Education found other complaints against the school to either be unfounded or not substantiated.

g.smith@theday.com