Education » Some say relatives running school together may present a conflict of interests.

By lisa schencker

and rosemary winters

| The Salt Lake Tribune

A state school board member is questioning whether family members should be allowed to contract with one another to run charter schools, calling the relationship between a charter-school academy and its management company "not right."

But the practice of family members running charter schools together is not unique to one school. Charter schools are independently run public schools often started by groups of parents.

At a glance

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On July 1, changes will clarify state law

If a charter school board enters into a contract in which a board member or a relative of a board member has a financial interest, the board member shall:

Disclose the financial interest in writing.

Abstain from the board’s vote on the contract.

Not attend any meeting in which the contract is being considered or determined.

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Outgoing state school board member Denis Morrill raised the issue at a board meeting this month as the board considered American Preparatory Academy’s request to expand beyond its current plans. The academy pays a charter school management company $986 a year per student to run its two schools, according to the management agreement. The company is owned by sisters of the chairman of the academy’s board.

"I’m not willing to approve and watch expand something that puts another $920 a year in the pocket of the sister of the person who’s asking for the expansion," Morrill said.

With about 1,140 students enrolled in American Preparatory Academy’s two schools, the for-profit management company, led by Carolyn Sharette, receives more than $1 million a year, she said. Sharette’s brother, Howard Headlee, chairs the American Preparatory board, which hired Sharette’s company. The academy is opening a third campus in the fall with another 720 students.

Sharette, Headlee and their sister Laura Campbell opened the first school together in 2003. Sharette and Campbell worked at the school and later created the charter management company, called American Preparatory Schools Inc.

Sharette said setting up a management company became necessary to allow her to assist other charter schools that were approaching her for help without using American Preparatory Academy’s resources.

However, Morrill, who is also a lawyer, said he believes it’s illegal under current law for Headlee’s board to hire his sister’s company.

Headlee and Sharette say it’s legal, as does Marlies Burns, state charter school director.

Carol Lear, director of school law and legislation at the state Office of Education, said "the statute is difficult to interpret, and we should leave that for the courts to determine."

Under new exceptions to the law, set to take effect in July, it appears the arrangement will soon be legal if it’s not already. Sen. Howard Stephenson, R-Draper, sponsored the bill that changed the law this year and is friends with Headlee but said the change had nothing to do with American Preparatory. He said it’s intended to make the law — which regulates relationships between charter school board members and employees and contractors — consistent for charters and school districts when it comes to construction contracts.

Headlee said he was unaware of the changes Stephenson made.

Also, Headlee did not attend the meeting in which the board voted to hire Sharette’s company, did not participate in discussions about it and previously declared his conflict of interest, according to minutes of the 2008 meeting in which the board voted to hire Sharette’s company.

Headlee said he has no financial interest in his sister’s company. He said the board followed competitive bidding practices required by state law but Sharette’s bid was the only one that met the needs of the school’s instruction model.

Sharette’s company employs the academy’s administrators and handles the school’s finances and academics.

"If you look at almost every charter school in the state you will find there are families that got together to try to improve the educational environment for their children — very similar to what me and my two sisters did 10 years ago," Headlee told The Tribune.

Kim Frank, director of policy and advocacy for the Utah Association of Public Charter Schools, said she knows of a handful of other Utah charter schools founded by relatives, and said she doesn’t believe that’s a problem.