NY1 [via Brownstoner] is reporting that the Williamsburg Charter High School has been put on probation by the Department of Education “for a string of violations”, including “illicit spending” and “misallocating funds”, all of which has left the school with $4 million in debt. According to the Times’ SchoolBook site, which originally broke the story (and whose post includes the DOE probation letter in full), the school was already under investigation by State Attorney General Eric Schneiderman.

The financial problems seem to be a combination of overspending and under enrollment. WCHS – which has been in operation for seven years – is part of the Believe High Schools Network, which also operates the Southside Charter High School and the Northside Charter High School (both of which are located in on the Ericsson J.H.S. Campus in Greenpoint). According to Gotham Schools, all three schools spent about 30% more per student than they brought in through state funding, a gap that was not covered by private fundraising. In the case of WCHS, the school needed an enrollment of 1,000 students in order to cover its $2.3 million annual rent, but was only able to enroll 850 students. Another big issue in the DOE review is the relationship between the Believe network – which received $2.34 million in management fees from WCHS last year – and the school. Half of the school’s 6-member board is employed by Believe or other schools in its network.

To compensate for the missed rent and loan payments, the school has apparently cut back on the number of teachers.

WCHS is located on Varet Street in East Williamsburg. The school’s landlord received a number of variances in order to allow the conversion of a former factory building for a school use. After the school fell behind on rent, the landlord put the property on the market for $30 million. (That price tag seems a bit steep, given that the property is zoned for manufacturing and subject to a variance [Word document] that specifically allows Williamsburg Charter to occupy the building, but requires BSA approval for any change in school operator.)

For its part, the school says that the DOE charges contain “many inaccuracies and misstatements of fact” that the school has “challenged time and time again”. WCHS doesn’t have any specific response to the DOE allegations, but promises to post “links to a series of documents that outline the concerns that the City and State have addressed us on and our responses to them. In addition, [we will post] relevant timelines and information regarding the school’s attempt to set the record of facts straight over the course of time”.