David Fehte, at left, is the principal of El Camino Real
Charter High School. The school board cancelled his and other administrators’
credit cards at a meeting Wednesday. Dean Musgrove/Staff Photographer
By Mike Reicher, Los Angeles Daily News | http://bit.ly/1XsuOHD
Posted: 05/22/16, 7:39 AM PDT :: Just
a 10-minute drive from the school, the waiter brought the table a $95 bottle of
fine Syrah wine. Dimly-lit Monty’s Prime Steaks & Seafood, with its red
booths and white linen, doubled as a high school meeting room that Wednesday
night, Principal David Fehte says. And on many other nights.
In 2014 and 2015, Fehte, who leads El Camino Real Charter
High School in Woodland Hills, charged more than $15,500 at Monty’s to his
school-issued American Express card.
“When we’re doing business, we’re doing business,” Fehte
said recently as he walked to his BMW in the San Fernando Valley campus parking
lot.
He also paid for first-class airfare and luxury hotel rooms
with his school-funded credit card.
Fehte acknowledged charging El Camino for personal travel
and, after the Daily News inquired, said he reimbursed the public school.
Over the two years, Fehte charged more than $100,000 to the
card, according to a Los Angeles Daily News analysis. El Camino receives about
$32 million in government funds annually, accounting for 94 percent of its
revenue.
“Before, I was just concerned. Now I’m angry,” said El
Camino mother Marlene Widawer, who began looking into the school’s finances
after hearing concerns from teachers and other parents. “Here are the people
responsible for ensuring our kids are getting the best education possible, and
they’re doing this?”
The school hired a financial crisis firm after the Los
Angeles Unified School District first questioned the principal’s charges and
those of other administrators in October 2015. Now, El Camino’s board of
directors is planning to hire a forensic private investigator or auditor to
review expenses. Last week, the board voted to cancel Fehte’s card and all but
one of the other administrators’ credit cards.
All told, Fehte and four other administrators spent more
than $1 million with their school-issued credit cards during the two years. The
vast majority of charges were for typical school supplies such as textbooks,
computers, sports equipment and furniture. But Fehte spent liberally with his
platinum card, while sometimes paying for other people. The Daily News obtained
credit card statements and preliminary account data under the California Public
Records Act. The documents show that Fehte charged:
• More than $6,700 for a four-day trip to the Michigan
headquarters of Herman Miller, the designer furniture manufacturer. Fehte and
two other school employees flew first class and stayed in $359 hotel rooms on
their journey to view classroom furniture. Herman Miller, meanwhile, has an
L.A. showroom 25 miles from the school.
• Fehte, combined with other administrators, charged more
than $5,700 for flowers over the two years. He sent a $75 floral arrangement
with red roses to the school’s human resources manager. The note read, “Happy
Birthday, Terri! Love, Dave.”
• Personal trips to Greensboro, North Carolina, and Spokane,
Washington. On one of the North Carolina trips, he flew first class. On
another, he charged the school nearly $800 for two nights at a hotel, including
a charcuterie plate with cheese, olives and a bottle of red wine. Fehte this
month acknowledged they were personal charges.
• When the school’s Academic Decathlon team traveled to
Hawaii for the 2014 national championships, Fehte bought himself and assistant
principal Yvonne Halski first-class tickets at $1,890 each. The rest of the
school contingent flew economy.
See the receipts:
• Two of El Camino Principal David Fehte’s Monty’s meals
• Fehte’s first-class travel to Hawaii
• Charcuterie, wine and hotel in North Carolina
In September 2015, LAUSD’s charter school division sampled
some of El Camino’s checks and credit card statements and found charges that
violated the school’s own policies, said L.A. Unified central business adviser
Aaron Eairleywine. Fehte’s expense reports were approved by his subordinates,
for instance, instead of a board member, as required by the school’s policy.
Because of the violations, the district downgraded El
Camino’s financial rating from a 4 to a 1, the lowest score possible, despite
the school’s healthy balance sheet. Every year, L.A. Unified — which oversees
charter schools in its boundaries — rates charters on various measures, from
governance to student achievement. Serious financial mismanagement could lead
to a charter revocation, Eairleywine said. Though it hadn’t reached that point,
the district ordered El Camino to quickly reform its fiscal policies.
Eairleywine added that the problems may not cross any legal boundaries.
“There is nothing here that indicates they have done
anything outside the law,” he said late last month. “We’re not done with the
review yet, but we don’t expect it will yield anything along those lines.”
El Camino’s own auditors in November 2015 also noted the
administration had significant problems with its credit card charges and
expense reimbursements. But after that, Fehte continued to spend on meals and
travel, the records show, albeit at a slower pace. He declined to sit down for
an interview.
The school’s board of directors revised its financial
handbook in December and hired more accountants in response to the district’s
findings. In a written statement, the board members said they support Fehte and
other administrators while they are “working to update our policies to comply
with the ever-changing regulations applied to public schools.”
Board Chairman Jon Wasser wants more details about credit
card expenses when submitted to the board for approval. Until at least January,
the school staff presented board members with only the total amount of each
card statement, with descriptions like “miscellaneous” and “Amex.” The school
is operated by a nonprofit corporation called the El Camino Real Alliance,
which is governed by the board of directors. They have fiduciary responsibility
over the public funds.
“We are moving towards more oversight,” said Wasser, a board
member since August 2014 and chairman since October. “I have what was handed to
me, and I’m moving forward with changes.” El Camino Real serves about 3,900
students in the wealthy community of Woodland Hills. High performing on
standardized tests, the school is perhaps best known for its seven U.S.
Academic Decathlon championships. Just 18 percent of students last school year
were eligible for free or reduced price meals — a common indicator of poverty —
compared with 76 percent districtwide.
The key question about a charter school employee’s
expenditures, experts say, is whether they were made for school business.
“When you use a credit card for personal use, that is a gift
of public funds,” said Deborah Deal, who has audited other charter schools for
a state agency and is the assistant superintendent of business services at
Azusa Unified School District. “Knowing that you used it for personal purposes
— that’s where it crosses the line.”
Fehte reimbursed El Camino for 13 expenses marked “personal”
on monthly recaps. They totaled $3,317 over the two years, according to
preliminary account data provided by El Camino. Those included purchases at
Costco, a boat rental company, and a room at the Marina del Rey Marriott.
But other charges, which Fehte told a reporter were
personal, showed no record of reimbursements. His Washington airfare and North
Carolina lodging, food and airfare were charged in “error” to his school card,
Fehte wrote.
“I should have used my personal credit card,” Fehte, 55,
said in one written response. “The staff preparing my credit card recap assumed
it was school-related and did not bring it to my attention.”
After this news organization asked about the expenses,
school administrators said Fehte reimbursed El Camino for “inadvertent credit
card charges.”
They did not provide documentation of the payments when
asked. Fehte said he repaid the $95 wine purchase, a $56 charge for a rented
BMW 328i, the Washington state and Greensboro airfare, and hotel bills from
North Carolina and Ventura Beach.
Personal spending “is inappropriate and does not align to
the purpose for the use of the public credit card,” Eairleywine wrote in a
letter to the school.
Charter school administrators caught using credit cards for
personal charges have faced steep consequences. In 2013, the founders of nearby
Ivy Academia were found guilty of embezzlement and misappropriation of public
funds for using a school American Express card to buy expensive dinners in the
San Fernando Valley and other items a judge deemed unrelated to school
business.
An outright prohibition on personal charges could force El
Camino to discipline employees who made innocent mistakes, said Marshall
Mayotte, the school’s chief business officer. So, despite the district’s
protest, El Camino intends to continue allowing personal expenses to be charged
but reimbursed quickly, he said.
Mayotte called the district’s scrutiny “nitpicky” and cast
the situation in broader terms about charter school efficiency.
“If they have unnecessary staff, that’s not a waste of tax
dollars,” he said of L.A. Unified, “but if we have one too many meals, that’s a
waste of taxpayer dollars?”
Fehte, a former college basketball coach, was the state’s
second-highest paid executive director or principal of a public school in 2014,
according to the most recent data published by the state controller. He made
$221,475 in wages.
Fehte became principal of El Camino in 2005 and led the
effort to convert the school to a charter in 2011. In recent years, he worked
to expand the school to other campuses but has been rebuffed by district
officials.
To plan the expansion and discuss other education issues,
Fehte said, he hosted dinners at restaurants such as Mastro’s Ocean Club in
Malibu. All the meals were related to school affairs, Fehte maintains.
“If you want to have a business meeting on the school dime,
you go to Coco’s or Denny’s or to Stonefire Grill,” said Widawer, who has a son
in ninth grade and two other children who graduated from El Camino. “You go
somewhere reasonable. You don’t go to extravagant meals.”
It’s up to a charter school’s board to establish guidelines
for meals and other credit card expenditures, said Alice Miller, managing
director of knowledge management for the California Charter Schools
Association. El Camino’s fiscal policy approved in 2013 said meals while
traveling should be at the “lowest rate available,” but it did not address
in-town meals. The 2016 handbook does not cover the cost of in-town meals, but
said travel meals could be up to $80 per day on average.
“My sniff test,” Miller said about board policies, is “how
would they feel if this was the headline in the local newspaper?”
Fehte submitted meal charges without documenting who joined
him, what they discussed, or how many people ordered food. School policies
didn’t require it at the time. Fehte sometimes dined at Monty’s twice a week,
spending an average of about $260 a meal. A handful of the Monty’s charges
exceeded $500.
“Usually it’s just him and a couple other people,” said
Monty’s General Manager Lee Chandler. “He’s one of our favorite customers.”
They would typically bring their own wine, Chandler said.
While the state education code prohibits employees at traditional public
schools from spending public funds on alcohol, the Charter Schools Act provides
an exemption from the code.
Under El Camino’s 2016 financial policies, employees are
required to pay for alcohol with personal funds. Also, credit card holders must
submit itemized receipts and details about their meals. But documents show
Fehte, through March 2016, submitted nonitemized receipts.
Airliners’ first-class cabins are also places to
“collaborate” on school business, Fehte said. On the flight to Herman Miller,
where round-trip tickets cost $930 each, he and other staff discussed a 10-year
classroom renovation project, Fehte said. It was important to travel to
Michigan, he added, to perform “due diligence by visiting the factory” and to
work face to face with the company’s education specialists.
For a student robotics contest in Louisville, Kentucky,
Fehte bought himself $2,451 of business-class and first-class airfare.
Before the school’s new fiscal policies were implemented,
the handbook provided no guidance on airfare. Now, the rules stipulate flights
may exceed coach prices by up to $200 each direction, and can be more expensive
if the employee has a medical need. Fehte says he has a medical condition but
declined to disclose its nature.
El Camino administrators say they should not be judged on
particular expenses, but on the bigger picture — how much money they save each
year. The school had $14 million in net assets last fiscal year.
“Basically, they’re saying mismanagement of funds,” said
Mayotte, the chief business officer, “when we saved $4 million last year.
__________________
SAN FERNANDO VALLEY CHARTER PRINCIPAL IS HIGHEST-PAID IN LA
COUNTY, 2ND IN STATE
By Mike Reicher, Los Angeles Daily News | http://bit.ly/1syiBWc
05/22/16, 7:42 AM PDT
:: El Camino Charter Real High
School Principal David Fehte was paid $221,475 in wages in 2014 — more than
any other principal or executive director of a public school in Los Angeles
County, and the second-highest in the state, according to the most recent data
published by the state controller.
The highest paid was the executive director of Pacific View
Charter School in Oceanside. The third highest, nearby Granada Hills Charter
High School executive director Brian Bauer, made $211,188. That school has a larger
student enrollment — with 4,480 students this year compared with El Camino’s
3,855 — and more total employees.
Fehte says that he performs more duties than a typical
school principal because he has a lean administrative staff. El Camino, for
instance, has 23 office or clerical staff members, according to state
Department of Education statistics, compared with Granada Hills’ 30.
“That’s a valid point, but that would be listed in their job
description,” said Alice Miller, managing director of knowledge management at
the California Charter Schools Association.
Fehte did not provide a copy of his job description when
asked.
For the 2015-2016 school year, El Camino’s board of
directors voted to raise Fehte’s base salary to $215,000 from $180,060, but to eliminate
his potential for bonuses and incentives, which had boosted his previous year’s
pay. Bauer at Granada Hills also now makes $215,000, according to a school
official there.
The chairman of the El Camino Real Board of Directors, Jon
Wasser, said that he was comfortable raising Fehte’s pay based on a comparison
survey of other schools’ leaders. Provided to the board by one of Fehte’s
subordinates, that comparison included the heads of private schools and major
charter school networks. The CEO of High Tech High in San Diego, with 13
campuses from kindergarten through high school, was on the list. He was paid
$330,115. El Camino has one main high school campus and a continuation school.
“The truth is that a director with multiple schools would
have multiple principals and an army of assistant principals,” Wasser wrote in
response to questions. “The fact Mr. Fehte and other administrators handle a
large amount of work, with what is a relatively low number of administrators, I
believe the board’s decision was valid.”
●Mike Reicher is an investigative reporter for the Los Angeles News Group with a focus on government accountability. Reach the author at mike.reicher@langnews.com or follow Mike on Twitter: @mreicher.
