After refusing for months to tell state auditors just how much American Preparatory Academy‘s top administrators are paid, the charter school’s operator agreed in February to “voluntarily comply.”

That “good faith” cooperation, the operator said in a statement, was, in part, meant to “avoid wasting further time and resources in court.”

Months later, though, court documents show the operator continues to refuse to open its books — unless the state agrees to keep those salaries secret.

That’s because, the operator has argued, the charter school’s top administrators aren’t technically American Preparatory Academy school employees. Instead, they are paid by a similarly named private company, American Preparatory Schools (APS).

It works like this: The charter funnels public money to the private operator, which then cuts paychecks, according to a management contract between the two.

APS argues that distinction should shield payroll records from public view. The money — at least $31 million since 2022 — is still public, though.

It’s why State Auditor Tina Cannon disagreed with the assertion and in February asked a judge to hold APS in contempt. Cannon is now asking a 3rd District Court judge to expedite a ruling on the matter, which has gone unresolved for nearly a year; her office first asked to see the charter operator’s books last September.

“The public has a right to know how its tax dollars are spent,” Cannon wrote in the motion.

In a statement, APS said the company and state auditor “differ on a specific point of law.”

“The Auditor previously agreed publicly with our interpretation, but has apparently since changed her mind,” APS said in a statement to The Tribune.

The auditor’s office refuted that.

“While the Office typically does not comment on pending litigation, our position in this dispute has never changed,” auditors said in a statement to The Tribune. “Our court filings demonstrate this consistency throughout.”

‘Court should not allow it,’ auditor says

In Utah, charter schools are public schools; the main difference between them and traditional public schools is that charters operate independently from school districts.

Charters still receive taxpayer funds and must comply with all laws governing public education.

That’s why, Cannon argued in her July 9 motion for an expedited ruling, American Preparatory Academy shouldn’t be “permitted to insulate the handling of those public funds from the state auditor’s review by transferring millions of public dollars to a separate entity.”

The private company is responsible for paying the salaries of at least eight charter executives, including an academic director, according to the company’s contract. The company also provides general oversight and management services across American Preparatory Academy’s nine Utah campuses.

Cannon argued the contract delegates “most every aspect” of school management to the private company.

The company isn’t paid a set price for its services, according to the contract. In the agreement’s first year, American Preparatory Academy paid the company $1,249 for each student enrolled.

In the second year and beyond, the school paid that amount, plus a percentage increase that’s adjusted in alignment with the state’s weighted pupil unit (WPU).

“Can evasion of state oversight really be that simple?” Cannon asked in her July 9 motion. “Statute doesn’t support it, and the court should not allow it.”

Cannon goes on to warn the court about the “catastrophic” consequences of allowing APS’ finances to stay in the dark.

Such a ruling would not only render the state auditor’s office “superfluous”and deny the public its due transparency, Cannon argued, but would set a chilling precedent.

“If the Court rules that an entity receiving public funds may evade accountability by transferring the funds to a private entity, every direct recipient of future legislative appropriations will follow [this] lead by executing a contract with a third party and transferring its appropriations to that third party,” Cannon wrote.

Auditor is ‘overstepping,’ charter manager argues

Responding to the auditor’s February petition, the company, American Preparatory Schools, argued that it’s not a school, nor does it receive “state or federal public funds.”

Rather, APS provides “curriculum and management services” and has contracted with several nonprofit charter campuses in Utah and other states, the court filing states.

School officials have opened some of their books — but refused to detail payments the school made to the private company since 2022, when the contract began. Instead, they disclosed yearly “lump sum” amounts, prompting Cannon to issue a December subpoena for more detailed records.

APS argued that while the state office has legal authority to audit the charter school itself, it does not have that authority over a privately held company.

In a previous statement to The Tribune, American Preparatory Schools said it operates like “every other state contractor.”

For instance, the company said, a Utah agency may contract with a private road construction firm, and while auditors are entitled to information pertinent to the contract and end result, they are not entitled to the contractor’s “internal, proprietary financial information.”

“That is true of a wide array of state contractors — food vendors, book publishers, maintenance firms,“ officials said. ”APS should be treated no differently."

Current law requires Utah public entities to make certain financial information public, including their employees’ salaries. The state maintains a website called Transparent Utah, where members of the public can access that information.

Utah code also defines “documents held by a contracting entity or subsidiary of a charter school that are necessary to demonstrate the charter school’s compliance with state or federal law” as property of the charter school.

The company said it will “abide by what the courts ultimately decide.”