GREEN DOT CHARTER SCHOOLS FOUNDER REPAYS GROUP $50,866: The nonprofit's tax return shows that Steve Barr repaid the organization after an internal review found that expenses he had charged were undocumented or unjustified

By Howard Blume | LA Times

Green Dot schools founder Steve Barr greets a student in 2007. Barr said that during the period in question, "I was all over the . . . place and my receipts weren't great." (Anne Cusack / Los Angeles Times / January 9, 2007)

December 2, 2009 -- Local charter school founder Steve Barr, a national figure in school reform, has repaid his organization more than $50,000 after an internal review determined that expenses he had charged were undocumented or unjustified.

The repayment was disclosed in a tax return filed this year by Green Dot Public Schools, which Barr launched in 1999.

Barr stepped aside this fall as board chairman of Green Dot but remains on the board and on staff. The expense problem had nothing to do with Barr's change of role, said Shane Martin, who replaced Barr as chairman.

Martin said Tuesday that the expenses came to light in an internal review as the rapidly growing nonprofit transitioned from Barr's ad hoc creation to a nonprofit run according to proper accounting standards.

The disallowed costs related to missing receipts and "isolated instances of expenses that were more extravagant than they needed to be for a nonprofit," such as lodging at higher-grade hotels, said Martin, who also heads the school of education at Loyola Marymount University.

"We caught this internally and took decisive action," he said. "Everyone cooperated fully."

Barr's education work has attracted significant notice because of Green Dot's July 2008 takeover of long-struggling Locke High in South Los Angeles. U.S. Education Secretary Arne Duncan has cited Green Dot's approach as one model for the essential turnaround of the nation's high school "dropout factories."

Green Dot's internal review has local implications because the Los Angeles Unified School District is poised to turn over as many as 30 campuses to outside bidders, including Green Dot and other charter organizations. Charters are publicly funded, independently managed schools that are free from some regulations that govern traditional schools.

Martin initially cited attorney-client privilege in saying that Green Dot would not release an audit of Barr's expenses because it was conducted by a law firm. He later said Green Dot would consider releasing it.

Last year, L.A. Unified cited the same rationale for withholding an audit on its handling of a misconduct case. The district, under public and legal pressure, eventually released the report.

Charter schools, however, are not subject to the state law that requires the disclo- sure of public records, according to a state Department of Education analysis. But a law firm that represents charter schools has concluded that the legal landscape remains unsettled.

The L.A. school board this month is scheduled to vote on a policy that would apply the public records act to charters.

For the most part, Green Dot, which operates 19 schools, is among charter organizations that have made transparency a hallmark, frequently surpassing L.A. Unified in ease of access to campuses, budgets and detailed student data.

Mention of Barr's reimbursement surfaced in a recent post by education blogger Alexander Russo.

FOR THE RECORD/CORRECTION FROM THE LA TIMES 12/3 - Green Dot: An article in Wednesday's Section A about Green Dot Public Schools founder Steve Barr repaying his charter school organization more than $50,000 in expenses said the issue had surfaced in a post by education bloggerAlexander Russo. Another blogger, Ken Libby, had previously posted about Barr's repayment.

Green Dot's tax return is available because of federal laws governing nonprofits. The issue of Barr's expenses is described in a note on page 20: "The Corporation reimbursed Mr. Barr in error a total of $50,866 for charges that were either not reimbursable in nature, or were insufficiently substantiated or documented to qualify for reimbursement," according to the tax return. "The Corporation concluded that while many of the expenses were inappropriate, there was no evidence that Mr. Barr attempted to enrich himself."

Barr characterized the audit as his own "proactive effort." During the period in question, from 2004 through 2007, he said, "I was all over the . . . place and my receipts weren't great."

He said the expenses he paid back included taking teachers out for drinks and picking up a $1,000 dinner tab for parents who took part in a rally.

The tax return states that two subordinates raised concerns about the matter in November 2007. The review was completed nine months later, shortly before Barr turned over day-to-day management to current Chief Executive Marco Petruzzi.

Barr focused instead on "fundraising, advocacy, politics," Petruzzi said. "That's something Steve is very good at."

Barr gave up his board chairmanship this fall but continues to earn a salary of $215,000, with the current assignment of developing a national profile for Green Dot.

"We can play a bigger role than methodically building charter schools one after another," Barr said.