Debt-ridden charter school might be asked to close

Halau Lokahi Charter School in Kalihi has stopped paying its employees, owes more than $417,000 and may be asked to shut down, according to a state Public Charter School Commission official.

"They have not made payroll," said Tom Hutton, executive director of the commission, adding that the school’s staff received no money in the most recent pay period and only partial payment for the previous one.

"We have been told that this represents a de facto layoff of their staff," he said. "We are making sure that formal notice is sent to those employees that this is a layoff."

The school, whose curriculum is rooted in Hawaiian culture, had 183 students in kindergarten through 12th grade last year and a staff of 22.

The commission, which oversees charter schools, will consider an action item on its agenda titled "Financial Insolvency of Halau Lokahi Charter School" at its meeting Thursday.

"At this point I expect that part of my recommendation will be actually that the commission call upon the governing board to close the school voluntarily," Hutton said.

"Barring some hugely unforeseen development, I can’t see how they can climb out of a financial hole this big and make it through to the end of the coming school year without leaving the kids high and dry."

The school’s director, Laara Allbrett, did not respond to phone calls and an email from the Hono­lulu Star-Advertiser requesting comment on the matter. She and members of the school’s governing board, which is chaired by June Naga­sawa, are expected to attend Thursday’s meeting.

If the governing board chooses not to shut down, it will be up to the commission to take action, Hutton said. Charter schools are supposed to be laboratories of educational innovation, and report to their own governing boards.

Hutton said Halau Lokahi appeared to be using the per-pupil funding it received from the state each July to pay bills from the previous year rather than spending it on the coming academic year as intended. This past academic year, when enrollment dropped by 54 students, funding dipped, too, but the school apparently did not trim spending accordingly, he said.

"They were skating by in previous years," Hutton said. "This year it caught up with them. … We are still putting the pieces of the puzzle together. Based on information they sent us today, I would say the school is at least $417,000 in arrears."

Halau Lokahi received $6,000 per student in public funds in the last school year, plus an additional $1,500 per child from Kame­ha­meha Schools. It owes money for rent, employee pay and other costs, Hutton said.

The commission first heard about the pay problem from an employee of the school, then from the state retirement system and the teachers union.

Halau Lokahi, which opened in 2001, is one of the state’s oldest charter schools. Its first independent financial audit revealed a debt of $425,000 in 2010, but administrators said in 2011 that they had paid that down and tightened financial controls.

The charter school’s academic performance falls well below statewide averages on state assessments.