Muskegon Heights school board of directors fire managing firm

MUSKEGON HEIGHTS, Mich. — The Muskegon Heights Public School Academy System Board of Directors has called to fire the district’s managing firm, New Paradigm for Education. 

They say New Paradigm’s involvement in the district “is having a detrimental impact on its staff and students, and even more so for those with special needs.”

The managing firm out of Detroit was hired before the start of this school year, and parents, students and staff have reported problems with the curriculum and teacher shortage. The Muskegon Area ISD also reported that the district’s special education program was out of compliance.

In a meeting Thursday night, the academy board voted 3 to 0, with one board member absent, to notify New Paradigm of a breach and authorize the termination of their contract, or Management Services Agreement. The board’s vote also authorizes its Board President Dr. Rose Hunt to work with their legal counsel, educational consultants and local, state and federal agents to make this termination happen, as well as transition to a different solution for the district.

The academy board is alleging that New Paradigm is not providing a conducive learning environment for students, not providing monthly financial statements and not hiring enough teachers to staff the school.

They also say that 26 of 33 high school seniors are currently not on track to graduate, and students have been forced to retake the same classes or take classes in incorrect subjects or grade levels.

The board’s vote was an added action item to their agenda following a twenty-minute closed session with their attorney Eric Delaporte.

In response to the move, New Paradigm CEO Ralph Bland says that they already terminated their contract with the district on January 29 because of unpaid management fees.

In a joint letter to Bland, the academy board says:

“The Board of Directors and our community are disgusted and outraged with NPFE’s failure to serve and educate our students, to fulfill our constitutional and fiduciary duties as public officials, and NPFE’s creation of such a toxic operating environment that our workforce has been systematically depleted. When the Board of Directors attempted to work with you in good faith to address NPFE’s issues, we were met with rude and condescending behavior, along with evasive and deficient answers. We also have seen and heard about the disrespectful and disingenuous ways you treat our students, teachers, parents, contractors, and community members. The lack of care and support you have shown for our most vulnerable special needs students is shameful.”

New Paradigm now has 30 days to address the material breaches, and the academy board is exercising its 90-day notice to terminate their contract with New Paradigm without cause.

It remains unclear what happens next. While the academy board has given New Paradigm a deadline to work with, it doesn’t appear that the managing firm will meet that as they say they’re already out of their agreement and working to transition the district. 

The letter continues with:

“NPFE’s failure to perform has caused the Michigan Department of Education, the Muskegon Area Intermediate School District, and our authorizing agency to find the System out of compliance with state and federal law and our charter contract. When teachers and staff try to raise issues, it is frequently reported that you and NPFE retaliate and foster a culture of fear wherein people are afraid to speak up. We also witnessed you taking a similar approach with our students.”

In a statement to 13 ON YOUR SIDE, Bland shared: 

“When we took over management of MHPSAS, we knew that the changes the System needed would not happen overnight, and we are proud of the progress we have made during our short time managing the System. Despite the best efforts of our team, long-standing obstacles from within the System made it clear that a long-term partnership was not feasible.

On Jan. 29, we provided the System Board with notice of our decision to terminate our agreement. The Board confirmed receipt of our notice on Feb 1.

We know that we have left the System in a better place than we found it, specifically in terms of putting in place academic and financial systems and structures where none had existed before. Moving forward, it is our hope that the System and its leaders will address persistent systemic challenges in order to provide the students of Muskegon Heights the educational experience they need and deserve.”

The group advising the board, the National Charter Schools Institute, says the board has been in a difficult situation. 

“They have not had the reports, the documents and the records that they’re obligated to have as public stewards so they said enough is enough,” Dr. Jim Goenner, National Charter Schools Institute CEO, says. 

Another letter to New Paradigm lists 15 material breaches, where the academy board says the managing firm did not meet the expectations of their contract. 

“1. NPFE has failed to fulfill its responsibilities listed in Article III, Section A, of the MSA, Functions and Responsibility of NPFE. NPFE has failed to provide an environment conducive to learning; has failed to service special needs students’ has failed to appropriately staff the Muskegon Heights Public School Academy System (MHPSAS); has failed to provide monthly financial statements; and, has placed MHPSAS in a worse condition than before NPFE became “responsible for all of the management, operation, administration, and education program…of the System.”

“2. NPFE has repeatedly ignored and bypassed the System Board of Directors. Article VIII, section A of the MSA states, “Material Breach may include, but is not limited to, a failure to carry out its responsibilities under this Agreement such as failure to make required reports to the System Board, failure to account for its expenditures or to pay operating costs, or failure to meet or make appropriate progress toward meeting the outcomes stated in this Agreement and the Contract; a violation of the Contract or applicable law and any action or inaction by NPFE that places the Contract in reasonable jeopardy of revocation, termination or suspension as discussed above.” NPFE’s refusal to adhere to its contractual duty to recognize the Board of Directors as the ultimate authority within MHPSAS constitutes a breach of the MSA.”

“3. The MHPSAS Board of Directors, its legal counsel, and its consultants have repeatedly made good faith efforts to discuss and resolve NPFE’s contractual failures in a professional and reasonable manner. These efforts have been met with evasive, misleading and deficient answers. Moreover, NPFE’s refusal to provide required records and reports is preventing the Board of Directors from being able to fulfill its constitutional, legal and contractual duties with its authorizer and is preventing it from operating in compliance with applicable state and federal law.”

“4. NPFE’s failure to perform is not new. In a letter authorized by the MHPSAS Board of Directors from the National Charter Schools Institute dated October 20, 2022, NPFE was notified that it was in material breach of the MSA and that its actions were preventing the “Board from fulfilling its fiduciary responsibilities, and placing the System in violation of its charter Contract.”

“5. NPFE has failed to implement and administer the educational program. NPFE has failed to hire qualified and credentialed teachers to implement the educational program, in violation of Article 3 of the MSA. This failure to hire sufficient certificated teachers, or even substitute teachers, has resulted in a disruption of the educational process and has caused serious harm to students.”

“6. NPFE has forced students to retake the same course or placed them with other students studying different subjects and/or grade levels from the same teacher. Students have been forced into remedial classes despite not needing those classes. NPFE was warned of the detrimental effect of not hiring or effectively managing teachers early on. To date, we have no evidence that any effective action has been taken by NPFE to address these serious staffing and classroom issues.”

“7. NPFE has failed to support those students who are not on track to graduate. It has been reported that 26 of 33 MHPSA high school seniors are currently not on track to graduate. To date, we have not been informed of any action to address these serious student issues and ensure that our seniors are equipped to earn their diplomas.”

“8. NPFE has failed to implement changes to the educational curriculum to improve student performance, in violation of Article III of the MSA. NPFE has failed to implement effective and proven curriculum. Further, NPFE has failed to provide comprehensive and cohesive lesson plans, study materials, books, electronic aides, and testing materials. In general, the instructional program appears to be in disarray. To date, we have no evidence that any effective action has been taken to address serious, system-wide curricular and programmatic issues.”

“9. NPFE has failed to abide by Article III, Section P, Financial Reporting of the MSA. This requires that, “On not less than a monthly basis, NPFE shall provide the System Board with monthly financial statements not more than thirty (30) days in arrears. Financial statements shall include a balance sheet, cash flow projections, check register, expenditures and changes in fund balance, detailing the status of the budget to actual revenues and a detailed schedule of expenditures at an object level for review and approval by the System Board.” NPFE has failed to provide these financial statements and has not presented the Board of Directors with a budget amendment even though student enrollment is significantly lower than what was projected in the original budget.”

“10. The Board of Directors has evidence that NPFE made withdrawals from MHPSAS’s bank accounts using stamped signatures of former board members no longer serving on the Board of Directors.”

“11. NPFE has failed to provide the Board of Directors with clear information upon which to make payments and reimbursements according to Article VI of the MSA. NPFE has not clearly delineated costs pertaining to its “Management Fee” in Article VI, section C; payments and/or reimbursements for Educational Program Cost in Article VI, section E; and reimbursements for the twice monthly payroll costs charged to MHPSAS, also found in Article VI, section C.”

“12. NPFE has failed to abide by Article VI, section J, Access to Records of the MSA. NPFE has failed to respond to repeated requests to make financial, educational, and operational records physically or electronically available upon request of the Board of Directors.”

“13. Without consultation and against MHPSAS’s wishes, NPFE withdrew from the Muskegon Area Intermediate School District’s MUNIS system and did not return to MUNIS despite the Board of Directors’ directives.”

“14. NPFE has failed to abide by Article VII, section B, of the MSA by not placing someone to serve as the “Principal of the System.” Further, NPFE has failed to have the Principal of the System provide the Board of Directors with monthly reports regarding the status of the Education Program as required by the MSA, or to have the “Principal of the System” present at MHPSAS on a daily basis.”

“15. NPFE has failed to prepare local, state, and federal reports and other necessary documentation in accordance with the MSA. NPFE, prior to submitting reports and documentation, must allow the Board of Directors to review and approve the material. NPFE has submitted reports directly to third parties, without first allowing the Board of Directors to review and approve the materials and at times has failed to provide reports at all.”

The academy board says if New Paradigm does not rectify these breaches, the managing firm will be terminated and removed from the property after 30 days.

An additional letter to New Paradigm asks that the firm comply no later than Feb. 15 with the following:

“1. Provide an organizational chart and staff directory for ALL personnel currently working at or for MHPSAS as Feb. 1, 2023.”

“2. Provide a complete list of ALL NPFE employees, agents, and contractors that NPFE has invoiced and received payroll reimbursement for from MHPSAS. Please include names, last 4 digits of social security numbers, titles, positions, dates hired, and dates terminated/fired/resigned, if applicable.”

“3. Organize and prepare MHPSAS’ records for transition and work in good faith to provide for the orderly transition of employee compensation and benefits without disruption to staffing in accordance with Article III, section M, subsection v of the MSA.”

“4. Provide and make accessible to MHPSAS ALL data and documents (administration, personnel, employment-related documents, sub-contractor agreements, incident reports, schedules, signed hiring/termination forms) that are in the possession of NPFE.”

“5. Restore ALL systems (MUNIS, banking, reporting, emails, etc.) and related passwords, access codes, etc. so that MHPSAS can organize and prepare for transition.”

“6. Ensure all student records are up to date, properly maintained, and securely protected in MHPSAS’ student information system (PowerSchool).”

“7. Transfer all financial data and records, and any other related materials into the MUNIS financial management system provided by the Muskegon Area Intermediate School District.”

“8. Inventory and return all MHPSAS property, funds, passwords, equipment, records, and resources that belong to MHPSA or were paid for by MHPSAS.”

“9. Be prepared to fully cooperate with MHPSAS as it organizes and prepares for transition. This includes meeting on-site with members of the Board of Directors, including its consultants and designees to review materials, discuss issues, and answer questions related to the management, operation, administration, finances and education program.”

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