Auditor General: Propel Schools Wrongfully Reimbursed By Education Dept.

HARRISBURG (KDKA) -- The Propel Charter Schools of Pittsburgh gets reimbursed tax dollars to lease school buildings for their schools around the region.

But the rules prohibit reimbursement when you lease from yourself.

In an audit just released, Auditor General Eugene DePasquale found four Propel leases were for buildings arguably owned by an entity controlled by the founder and executive director the Propel Schools, Jeremy Resnick.

"Buildings owned by the charter school are 'not eligible for the lease reimbursement,' and what we found in some of our audits is the same people who own and operate charter schools, they themselves create separate legal entities to own buildings and lease them to charter schools," DePasquale told a press conference in Harrisburg on Wednesday.

DePasquale said the Pennsylvania Department of Education wrongfully reimbursed propel over $376,000; and, statewide, shelled out over $2.5 million to nine charter schools that allegedly leased property from themselves.

"That $2.5 million literally doesn't help educate one single child across the state," said the Auditor General.

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But attorney Alan Shuckrow, who represents Propel, denies that either Propel or Resnick has done anything improper, telling KDKA money editor Jon Delano that Propel's landlord was a separate 501(C)(3) charitable entity.

Delano: "And the people who run that 501-c-3 are not the same people running the Propel Schools?"

Shuckrow: "That's correct. Mr. Resnick was never employed by or a board member or a director of the landlord."

Delano: "Has he ever received any form of compensation or benefit as a result of this?"

Shuckrow: "Absolutely not."

But DePasquale says legal documents suggest a connection; and that, in any case, the Education Department needs to do a better job reviewing these leases before releasing tax dollars.