Re: Amended Notice of Prospect of Revocation

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Dear Ms. Sledeziewski and the Governing Board of Kaʻu Learning Academy:

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This Amended Notice of Prospect of Revocation is issued to Kaʻu Learning Academy (KLA) pursuant to §8-‐505-‐16, Hawaii Administrative Rules (HAR), and in accordance with the action taken at the State Public Charter School Commission’s General Business Meeting on November 28, 2017. On December 14, 2017 during its General Business Meeting, the Commission approved the minutes to the meeting and corrected the approved motion taken to issue the Notice of Prospect of Revocation, specifically the Commission added §302D-‐18(g)(4), Hawaii Revised Statutes (HRS) to the motion:

ACTION: Motion that the Commission issue a notice of prospect of revocation to Kaʻu Learning Academy, pursuant to Section 302D-18(g)(1), (2), (3), and (4) Hawaii Revised Statutes (Takabayashi/Kim). The motion passed unanimously.

ACTION: Motion that the Commission withhold further funding to Kaʻu Learning Academy, provided that staff be authorized to release such funds as it deems essential for orderly operation of the school (Takabayashi/D’Olier). The motion passed unanimously.

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The State Public Charter School Commission’s (Commission’s) determination to issue this Notice of Prospect of Revocation was a result of a review of an independent auditor’s audit report that cited KLA for several material weaknesses and incidents of non-compliance, specifically:

• Finding 2017-001: Lack of Internal Controls and Additional Oversight - continuation of 2016-001

• Finding 2017-002: Accounting does not follow Generally Accepted Accounting Principles (GAAP)

• Finding 2017-003: Non-compliance with Department of Labor Laws and Regulations

The Commission’s decision to take action on and initiate the revocation process of KLA’s State Public Charter School Contract was done in accordance with §302D-‐18(g), Hawaii Revised Statutes (HRS), which allows the Commission to revoke a charter contract if the Commission determines that a charter school did any of the following:

(1) Committed a material and substantial violations of the terms, conditions, standards, and/or procedures required under its Charter Contract;

(2) Failed to meet or make sufficient progress toward performance expectations set forth in the contract; and

(3) Failed to make generally accepted standards of fiscal management; and

(4) Substantially violated any material provision of law from which the charter school is not exempted.

It was the Commission’s determination that the results of KLA’s audit report raise concerns pertaining to all four provisions stated above. During the discussion and deliberation, the Commission raised concerns regarding the lack of understanding of governance support, structure, and involvement of the school’s governing board.

Under HAR §8-‐505-‐16, KLA has until January 16, 2018, to respond to this Notice of Prospect of Revocation. The school also has the option of requesting a hearing on this matter, in accordance with HAR §8-‐505-‐20, and may request legal representation, subject to Section 28-‐8.3, HRS. For more details, we refer you to HAR §8-‐505, Subchapters 4 and 5.

The Commission will be notifying KLA’s parents and staff of the Commission’s decision and the process that will occur. The Commission will also be posting information on our website in order to provide the most updated information to the public. If you have procedural questions, please contact Chief Operations Officer Yvonne Lau (Yvonne.Lau@spcsc.hawaii.gov) or (808) 586-3775.

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Throughout this process, the Commission will remain committed to work with KLA, its students and families, and community in a respectful and cordial manner that puts the interests of the school’s students at the forefront.

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Sincerely yours,

Catherine Payne Sione Thompson

Chairperson Executive Director

c: Kathryn Tydlacka, Principal, Kaʻu Learning Academy (VIA EMAIL)