In recent months, a Los Angeles-based non-profit organization — Celerity Educational Group — has become a poster child for critics of charter schools.
Last October, L.A. Unified School District officials voiced unease about the charter network's too-close-for-comfort ties to another entity, Celerity Global Development. The charter school's leaders have denied anything improper about those ties, but district officials essentially raised the possibility that public money intended for the network's charter schools could have been diverted for Celerity Global's private profit.
But Celerity Educational Group leaders say the organization has put a plan in place to right the ship — and on Tuesday, the L.A. Unified School Board tentatively blessed that plan.
Under the “material revision” to the charter agreement that L.A. Unified board members unanimously approved Tuesday, Celerity Educational Group is severing ties with Celerity Global — the outside entity that at one point provided “day-to-day management” and a suite of management services for the network’s charter schools.
That arrangement — and an agreement giving Celerity Global control over Celerity Education Group’s board — had been central to district officials’ concerns. Contracts with Global are being cancelled.
Several personnel changes appear to be key to the de-escalation between Celerity and L.A. Unified, even if they're not technically part of the material revision board members approved Tuesday. The charter network’s founder, Vielka McFarlane, is CEO of Celerity Global and no longer involved with the schools themselves.
Celerity Educational Group CEO Grace Canada also told school board members Tuesday she plans to step aside.
"It is a new day at Celerity," Canada said in her prepared remarks.
'This is oversight at its best'
A statement from Celerity Educational Group said the charter network is "is grateful for the vote of confidence by the LAUSD Board of Education. The material revisions reflect the changes our Board has been diligently making to ensure the future for all our schools."
There are seven schools in the Celerity network, four of which are overseen by L.A. Unified. At its meeting on Wednesday, the California State Board of Education will consider similar material revisions to the charters of the two Celerity schools it oversees. (Compton Unified authorizes one Celerity school.)
The entire Celerity saga has shined a spotlight on L.A. Unified's Charter Schools Division, whose oversight practices have been criticized in pro-charter camps as capricious and overly punitive — and in anti-charter corners as too permissive.
School board member Scott Schmerelson noted the problems with Celerity only came to light because of oversight from district officials — including from the Office of the Inspector General.
"I do remain very, very concerned," he said, "about the years of misuse of public funds and conflicts of interest [with Celerity] that were identified by our own charter division, by our own Inspector General."
Schmerelson voted for the deal, but noted Celerity officials would need to demonstrate their commitment to transparency — warning that if they didn't, Schmerelson "will not be voting for future renewal of the charters unless these items are taken care of."
Board member Kelly Gonez, too, left the possibility that Celerity charter schools might not be approved for renewal if they don't reform — but overall called the material revision a "positive step."
"This doesn't necessarily solve the bigger issues and concerns that we have," Gonez said. "We'll have the opportunity to look at that when the schools are up with renewal, but this is a step in the right direction for today."
Fellow board member Nick Melvoin praised the deal.
"This is oversight at its best," he said. "We're using our oversight authority to leverage change. The Charter Schools Division laid out specific changes that needed to happen. Celerity has gone forward to actualize those changes."
Twists for Celerity
Tuesday's material revision is a twist in the Celerity saga, which district officials first detailed publicly in an Oct. 2016 report.
In that report, district officials described how, in 2012, Celerity Educational Group handed over day-to-day management of its schools, effective control over its board, and perhaps as much as $2.3 million in cash reserves over to Celerity Global.
Lines between the two became so blurry that it was impossible to "which staff … at its individual schools are employees of [Celerity Educational Group] and which are employees of Global," L.A. Unified's 2016 report concluded.
What's more, L.A. Unified officials claimed Celerity never informed them of the new governance arrangement. When L.A. Unified officials requested contracts between the schools and Celerity Global, the district's report said Celerity Educational Group refused to provide them.
And there were other findings L.A. Unified officials said Celerity leaders could not adequately explain. During the 2015-16 school year, Celerity Educational Group wrote checks totaling $5.6 million dollars to Celerity Global and other entities with similar names.
While the network's founder, Vielka McFarlane, had nominally "removed herself from positions within [Celerity Educational Group]," district officials found tax forms from both Celerity Global and Celerity Educational Group listing her name. To district officials, this raised concerns her involvement in both organizations could raise potential conflicts of interest.
And, district officials wrote, "checks were identified with her as an authorized signatory which suggests that she continues to be involved with the fiscal operations of the Celerity schools."
In Oct. 2016, district officials wrote Celerity's refusal to answer L.A. Unified's questions "interferes with the district’s assessment of the fiscal condition of [Celerity Educational Group] and its schools … including identifying and managing risks to prevent and detect fraud, waste, and abuse."
(Now, a school spokesman said the remaining schools' ties to Celerity Global are in the process of being severed completely. Celerity Educational Group is taking bids for new contracts for services once filled by Celerity Global, and according to a spokesman, "neither Global nor any Global affiliates submitted proposals, and none were chosen.")
Last October, L.A. Unified board members, faced with district officials' concerns over the relationship with Celerity Global, voted to deny charter renewals to two Celerity schools — Celerity Dyad and Celerity Troika.
On appeal, the state Board of Education ultimately agreed and the schools closed — but two other state board-authorized Celerity charter schools later opened on the same properties.
School board president Ref Rodriguez abstained from that vote last October, and on Tuesday, he did offer comments from the dais on the material revision. When reached by KPCC earlier this week, Rodriguez's office said the board member would not comment on this issue.