Perry Street Prep PCS Renewal Report 2.19.14

2013-14 Preliminary Charter Renewal Report

Perry Street Preparatory

Public Charter School

February 19, 2014

DC Public Charter School Board 3333 14th Street, NW, Suite 210

Washington, DC 20010 (202) 328-2660

www.dcpcsb.org

TABLE OF CONTENTS

FINDINGS AND RECOMMENDATION .................................................................................. 1

INTRODUCTION ........................................................................................................................ 2

ANALYSIS .................................................................................................................................... 6

SECTION ONE: GOALS AND ACADEMIC ACHIEVEMENT EXPECTATIONS ............... 6

SECTION TWO: COMPLIANCE WITH APPLICABLE LAWS ........................................... 29

SECTION THREE: FISCAL MANAGEMENT AND ECONOMIC VIABILITY ................. 35

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FINDINGS AND RECOMMENDATION After reviewing the renewal application1 submitted by Perry Street Preparatory Public Charter School (“Perry Street Prep PCS”), as well as the school’s record established by the District of Columbia Public Charter School Board (“PCSB”), PCSB staff has determined that Perry Street Prep PCS, as a Local Education Agency (“LEA”), did not meet its goals and student academic achievement expectations (“academic expectations”).

Perry Street Prep PCS consists of one campus serving multiple grade levels: early childhood (pre-kindergarten-three through second grade), elementary and middle school (third through eighth grade), and high school (ninth through twelfth grade), each with varying academic quality.

The analysis in Section One of this report supports that:

• Perry Street Prep PCS’s Early Childhood program has met its goals and academic expectations, but with a decidedly mixed performance that included scoring in the lowest decile on the Early Childhood PMF pilot for 2012-13;

• Perry Street Prep PCS’ third through eighth grade program has fully met its goals and academic expectations; and

• Perry Street Prep PCS’s high school has not met it goals and academic expectations.

Staff therefore recommends that Perry Street Prep PCS’ charter be renewed, but on the conditions that the school close its high school at the end of the 2014-15 school year.

In materials submitted to PCSB by the school, the school acknowledged weaknesses in its early childhood program and committed to contract with a high-quality early childhood operator to deliver educational services for its pre-school and therefore the renewal report memorializes this commitment. 2

Additionally, given the disturbingly high number of findings by the Office of the State Superintendent of Education (“OSSE) of special education non-compliance, staff recommends that any renewed charter agreement contain a specific and quantitative goal around special education compliance.

Finally, given the school’s history of failing to accurately and timely report data to PCSB, staff recommends that any renewed charter agreement contain a specific and quantitative goal around timely and accurate submission of required data and documents to PCSB.

1 See Perry Street Prep PCS Renewal Application and Addendum, attached to this report as Appendix A. 2 See “Official Perry Street Response to PCSB Staff Report,” attached to this report as Appendix P.

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INTRODUCTION

School Overview Perry Street Prep PCS began operation in 1999 as Hyde Leadership Public Charter School (“Hyde Leadership PCS”), under authorization of the District of Columbia Board of Education (“DC BOE”). As originally chartered, Hyde Leadership PCS was managed by the Hyde Foundation, a private nonprofit foundation with an emphasis on character development. In its first year in operation, the school offered a fifth through ninth grade program, then expanded both its lower and upper grades each year until it offered a pre-kindergarten through twelfth grade program.

In 2007, after the passage of the Public Education Reform Amendment Act dissolved the DC BOE, PCSB became the authorizer of Hyde Leadership PCS. In June 2011, the PCSB Board voted to approve a charter amendment petition from the school to end its affiliation with the Hyde Foundation, revise its mission to focus on college preparation, adopt new goals and academic expectations, and change the name of the school to Perry Street Preparatory Public Charter School.3 In school year 2012-2013, one year before the school was eligible to submit a renewal application, Perry Street Prep PCS submitted a petition to amend its goals and student achievement expectations again. On July 29, 2013, after a public hearing on June 24, 2013, the PCSB Board voted to approve the school’s amended goals and expectations.4 Further detail about this amendment can be found in Section One of this report below.

Perry Street Prep PCS currently operates one campus with grades pre-kindergarten-three through twelfth grade. For accountability purposes, PCSB separately evaluates three grade bands at Perry Street Prep PCS: (1) pre-kindergarten-three through second grade, collectively referred to as the “early childhood program;” (2) third through eighth grade, collectively referred to as its “elementary and middle school;” and (3) ninth through twelfth grade, collectively referred to as its “upper school” or “high school.”5 Information about each of these grade levels is included in the table below.

Ward Year Opened

Grades Served

2013-14 Enrollment

10-11 PMF

11-12 PMF

12-13 PMF

Early Childhood Program6

5 1999

PK3 – 2 168 0 of 5 targets

2 of 4 targets

3 of 7 targets

Grades 3-8 Program 3 – 8 294 35.6%

Tier 2 43.4% Tier 2

47.2% Tier 2

High School 9 – 12 371 46.6%

Tier 2 37.6% Tier 2

31.7% Tier 3

s3 See Board Proposal, Hyde Leadership Academy PCS Request for a Charter Amendment, dated June 20, 2011, attached to this report as Appendix B; see also Letter to Mr. Joseph Fanone, Board Chair, Hyde Leadership PCS, from Brian Jones, Board Chair, PCSB, dated June 28, 2011, attached to this report as Appendix C. 2 See PCSB Board Meeting Minutes, dated June 24, 2013, p. 1-2, attached to this report as Appendix D; PCSB Board Meeting Minutes, dated July 29, 2013, p. 217-220, attached to this report as Appendix E. 5 This is consistent with the terms of the Second Amendment to the school’s charter, attached to this report as Appendix F. 6 For years 2010-11 and 2011-12, accountability plans, and not the Performance Management Framework, were used as an annual measure of early childhood program performance.

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Previous Charter Reviews The school has undergone three charter reviews since opening in 1999, as described below.

Five-year Charter Review In 2002-03, the DC BOE conducted a charter review of the school and recommended that its charter be continued, noting the school’s strong academic performance and programmatic design. However, the DC BOE also made several recommendations for improvement, including that the school undertake significant repairs to its facility, execute bylaws, create a risk management plan, and, because the school operated with a net asset deficiency, create a finance committee within its Board of Trustees.7

Ten-year Charter Review In 2006-07, as it transitioned from the DC BOE to PCSB’s authorization, the school underwent a second charter review, in which it was noted that the school’s academic performance was strong and the school had implemented an effective character development program. The review also included recommended improvements, including that the school should address its high school’s high attrition rate and also improve its teacher attendance rate.8

Additional Charter Review In January 2012, after the school separated from the Hyde Foundation, PCSB conducted a third charter review of the school.9 PCSB found that the school had not met any of its Accountability Plan targets in place at that time. Nevertheless, the PCSB Board voted to continue the school’s charter.10

2013-14 Renewal Process On June 30, 2014, Perry Street Prep PCS’ charter will expire and it has submitted to PCSB an application to renew its charter for a second fifteen-year term. The standard for charter renewal, as established by the SRA, is that “PCSB shall approve a school’s renewal application, except that PCSB shall not approve the application if it determines one or both of the following:

(1) The school committed a material violation of applicable laws or a material violation of the conditions, terms, standards, or procedures set forth in its charter, including violations relating to the education of children with disabilities; or

7 See Hyde Leadership PCS, 2002-03 Monitoring Report of Hyde Public Charter School, p. 6, attached to this report as Appendix G. 8 This report was completed by a consulting firm, according to PCSB’s review process in place at that time. The consultant conducted the charter reviews that year for all schools transitioning from the DC BOE to PCSB. See Hyde Leadership PCS Comprehensive Review Report, dated June 29, 2007, attached to this report as Appendix H. 9 As authorized by SRA §38-1802.12(a)(3). 10 See Board Proposal, Perry Street Preparatory PCS Candidacy for Charter Continuance, dated January 23, 2012, attached to this report as Appendix I. It should be noted that during the term of the charter, when conducting a SRA-required charter review, PCSB has the discretion to continue a charter even if it finds that the school has not met its goals and academic achievement expectations. The SRA does not allow such discretion during the renewal process.

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(2) The school failed to meet the goals and student academic achievement expectations set forth in its charter.”11

Separate and apart from the renewal process, PCSB is required by the SRA to revoke a school’s charter if PCSB determines that a school (1) has engaged in a pattern of nonadherence to generally accepted accounting principles; (2) has engaged in a pattern of fiscal mismanagement; and/or (3) is no longer economically viable.

Given the SRA’s standard for charter renewal, as well as PCSB’s obligation to revoke a school’s charter if PCSB determines that the school engaged in fiscal mismanagement (as defined by the SRA), this report is organized into three sections. Section One and Section Two are PCSB’s analyses of the school’s academic performance and legal compliance, respectively, and serve as the basis for PCSB staff’s renewal recommendation. Section Three is an analysis of the school’s fiscal performance, included so that if a school is found to have met the standard for charter renewal but also found to have engaged in fiscal mismanagement, PCSB staff can advise the PCSB Board accordingly. PCSB staff renewal analysis and recommendation PCSB staff’s analysis supports that:

• Perry Street Prep PCS’s Early Childhood program has met its goals and academic expectations, but with a decidedly mixed performance that included scoring in the lowest decile on the Early Childhood PMF pilot for 2012-13.

• Perry Street Prep PCS’ third through eighth grade program has fully met its goals and academic expectations.

• Perry Street Prep PCS’s high school has not met it goals and academic expectations.

Additionally, PCSB found numerous instances of fiscal mismanagement, including findings on the school’s Single Audit relating to expenditures of federal grant dollars, and failure to comply with legal requirements around the competitive bidding of procurement contracts. These issues, detailed below, do not at this time rise to a pattern of fiscal mismanagement. Important to this determination is the schools’ stronger, unqualified FY2013 audits.

However, if any future audits or other findings identify the school’s nonadherence to GAAP and/or fiscal mismanagement, such findings – taken together with the findings described in this report – could rise to a pattern requiring revocation of the school’s charter.

Staff therefore recommends that Perry Street Prep PCS’ charter be renewed, but, for reasons given above, on the following conditions:

1) The school close its high school at the end of the 2014-15 school year;

11 SRA §38-1802.12(c).

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2) The school engages with a high quality early childhood operator, to be approved by PCSB, beginning in the 2014-15 school year;

3) The renewed charter agreement contain a specific and quantitative goal around special education compliance; and

4) The renewed charter agreement contain a specific and quantitative goal around timely and accurate submission of required data and documents to PCSB.

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SECTION ONE: GOALS AND ACADEMIC ACHIEVEMENT EXPECTATIONS

The SRA requires that PCSB shall not approve a charter renewal application if the school has failed to meet the goals and academic expectations set forth in its charter.12 Goals are general aims (usually related to a school’s mission), which may be categorized as academic, non-academic, and organizational, whereas expectations are student academic aims measured by assessments. Goals and expectations are only considered as part of the renewal analysis if they were included in a school’s charter, charter amendment, or accountability plans approved by the PCSB Board (collectively, the “Charter”).

In July 2013, Perry Street Prep PCS amended its charter to adopt two goals related to its special education students and English language learners, as well as goals and expectations related to three separate PCSB Performance Management Frameworks (“PMFs”):

• Early childhood PMF indicators as the goals and academic expectations for its early childhood program;

• Elementary/middle school PMF as the goals and academic expectations for its third through eighth grades; and

• High school PMF as the goals and academic expectations for its ninth through twelfth grades.13

Consistent with PCSB policy, when a school adopts the PMF as its goals and academic expectations, PCSB will assess whether a school has met its goals and academic expectations starting in the school year that the respective PMF was formally adopted by the PCSB Board. As such, the Elementary/Middle School PMF and the High School PMF are considered to be Perry Street Prep PCS’ goals and academic expectations for its third through eighth grades, and ninth through twelfth grades, respectively, starting in school year 2010-11.14 Per PCSB policy and the school’s 2013 amendment, each of these grade levels will be deemed to have met their goals and academic expectations if it fulfills either or both of the following:

(a) Demonstrates annual consistent improvement in performance on the PMF, with no PMF score below 40% in the two academic years preceding its fifteenth year in operation; and/or

(b) Earns a PMF score of 45% or more in the two academic years prior to renewal assessment.15

12 SRA §38-1802.12(c)(2). 13 See PCSB Board Proposal, Charter Amendment Request to Adopt the PMF as its Goals and Academic Achievement Expectations—Perry Street Prep PCS, dated July 29, 2013, attached to this report as Appendix J. 14 While PCSB’s typical analysis of a school applying for renewal this year would start with the 2009-10 school year, given the school’s change in mission and management at the end of the 2010-11 school year as well as transition in leadership in the middle of the 2011-12 school year, this renewal analysis starts in the 2010-11 school year. 15 See Appendix J.

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Per the school’s 2013 amendment, it adopted the Early Childhood PMF indicators as its goals and academic expectations for its early childhood grades. However, consistent with PCSB policy, because the Early Childhood PMF was in pilot status at the time the 2013 amendment was approved, the amendment details that “…[PCSB]’s assessment for charter renewal purposes of [Perry Street Prep PCS’] early childhood program for the 2010-11, 2011-12 and 2012-13 school years shall be based on whether the [school] demonstrated annual consistent improvement in performance (as determined by the selection of more meaningful goals over time and better student performance on those goals).”16

The chart below summarizes PCSB’s determinations of whether each of the three academic programs met their respective goals and academic expectations, as well as whether the school met its two other goals. These determinations are further detailed in the body of this report.

Goals and Academic Expectations Met?

Early Childhood

1 Perry Street Prep PCS will demonstrate annual consistent improvement in performance in pre-kindergarten literacy progress. Yes

2 Perry Street Prep PCS will demonstrate annual consistent improvement in performance in kindergarten through second grade literacy progress. N/A

3 Perry Street Prep PCS will demonstrate annual consistent improvement in performance in kindergarten through second grade math progress. Partially

4 Perry Street Prep PCS will demonstrate annual consistent improvement in performance in kindergarten through second grade literacy achievement. Yes

5 Perry Street Prep PCS will demonstrate annual consistent improvement in performance in kindergarten through second grade math achievement. Partially

6 Perry Street Prep PCS will demonstrate annual consistent improvement in performance in pre-kindergarten attendance. No

7 Perry Street Prep PCS will demonstrate annual consistent improvement in performance in kindergarten through second grade attendance. Yes

Third through Eighth Grades

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Perry Street Prep PCS’ third-eighth grade program will demonstrate annual consistent improvement in performance on PCSB’s Elementary/Middle School PMF, with no PMF score below 40% in the past two years; or earn at least 45% of the possible points on the PMF for the two academic years prior to review.

Yes

Ninth through Twelfth Grades

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Perry Street Prep PCS’ upper school (ninth through twelfth grades) will demonstrate annual consistent improvement in performance on PCSB’s High School PMF, with no PMF score below 40% in the past two years; or earn at least 45% of the possible points on the PMF for the two academic years prior to review.

No

Subgroup Goals

10 All students with disabilities will make at least 5% growth in the areas of reading and math on the district approved statewide assessment annually. Partially

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Eighty percent of non-proficient English Language Learners will make improvements within their English language proficiency level as demonstrated on the annual ACCESS exam, which measures students’ speaking, writing, reading, and listening comprehension skills.

Yes

16 See Appendix F.

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EARLY CHILDHOOD PROGRAM Pre-Kindergarten-Three through Second Grade

Per the school’s 2013 amendment, Perry Street Prep PCS adopted the Early Childhood PMF indicators as its goals and academic expectations for its early childhood grades. Because the Early Childhood PMF was in pilot status at the time the 2013 amendment was approved, the amendment details that “…[PCSB]’s assessment for charter renewal purposes of [Perry Street Prep PCS’] early childhood program for the 2010-11, 2011-12 and 2012-13 school years shall be based on whether the [school] demonstrated annual consistent improvement in performance (as determined by the selection of more meaningful goals over time and better student performance on those goals).”17

In accordance with the above standard, PCSB analyzed the school’s performance in each Early Childhood PMF indicator from 2010-11 to the present, determining for each (1) whether student performance has annually and consistently improved; and (2) whether the school has selected more “meaningful” – i.e., more rigorous – early childhood goals over time.18

As shown in the table above, and as detailed below, of six applicable early childhood goals Perry Street Prep PCS fully met three, partially met two and failed to meet one. A seventh goal was deemed non-applicable as further described below.

Perry Street Prep PCS’ 2012-13 Early Childhood Performance on the Early Childhood PMF Pilot Although staff determines that based on the above results that Perry Street Prep PCS has met its early childhood goals as agreed to in its 2013 charter amendment, it should be noted that the school’s 2012-13 performance on the pilot Early Childhood PMF (“EC PMF”) indicates that the school’s early childhood program is not strong. This pilot set a 60% floor for a school to be considered having met minimum proficiency in each indicator. Perry Street Prep PCS missed four of the seven EC PMF minimum thresholds.

To provide some context to the school’s performance on the EC PMF pilot, 51 campuses participated in the 2013 EC PMF pilot, and more than two-thirds met the 60% threshold for all indicators. Only three campuses, including Perry Street Prep PCS, missed as many as four thresholds. Indeed, the school’s early childhood program was in the bottom tenth percentile of performance on the EC PMF pilot, consistent with the school’s trend since the 2010-11 school year of failing to meet the majority of its early childhood targets.

17 See Appendix F. 18 While PCSB’s typical renewal analysis includes a detailed analysis of the school’s previous five years in operation, given the school’s change in mission and management at the end of the 2009-10 school year as well as its 2013 amendment to adopt the PMF, PCSB’s analysis of the school’s early childhood performance begins in 2010-11, as opposed to 2009-10.

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Analysis of Early Childhood Goals Student Progress Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance in pre-kindergarten literacy progress. The school will be deemed to have met this goal if (1) student performance has annually and consistently improved; and (2) the school selected more meaningful goals over time.

Assessment: The school has met this goal. The school showed improved performance between 2010-11 and 2012-13 on a comparable goal. While, the school did not select more meaningful goals over time, it did select a goal in 2012-13 that was part of the EC PMF pilot program.

3 of 7 benchmarks

8% 4 of 7

benchmarks 6%

5 of 7 benchmarks

18%

6 of 7 benchmarks

2%

7 of 7 benchmarks

66%

0%

Early Childhood PMF Pilot Benchmarks Met

Perry Street PCS Pre-Kindergarten Literacy Progress Year Annual Goal Performance

2010-2011

70% of pre-kindergarten students will score at or above grade level on Brigance Developmental Inventory Standardized Assessment

66.7% of students scored at or above grade level.

2011-2012

70% of pre-kindergarten-4 students will demonstrate 10 points of growth, or score at least 90 points, by the spring administration on the Brigance Preschool Screen II.

66.7% of students demonstrated growth or scored at least 90.

This assessment is substantially different and less extensive than the assessment used by the school to

measure Pre-K literacy progress in 2010-11 and 2012-13, making the results non-comparable.

2012-13

60% of pre-kindergarten-3 and pre-kindergarten-4 students will progress to age equivalency in literacy/language on the Brigance Developmental Inventory Standardized assessment.

92.0% of students progressed to age equivalency.

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2013 EC PMF Goal Attainment (not a renewal standard)19

Did the school meet the EC PMF minimum threshold in 2012-13?

Yes Perry Street Prep PCS exceeded this goal’s 60% minimum threshold

that was established by the EC PMF Task Force. 2. Goal: Kindergarten through second grade literacy progress. The school will be deemed to have met this goal if (1) student performance has annually and consistently improved; and (2) the school has selected more meaningful goals over time.

Assessment: This goal was determined to be not applicable to the analysis. Because the performance standard changed each year, and because of missing raw data at the school, it was impossible to evaluate whether student performance had annually and consistently improved. Further, while this goal did not become more meaningful over time, the school did select a goal for 2012-13 that was part of the EC PMF.

Perry Street PCS K-2nd Grade Literacy Progress Year Annual Goal Performance

2010-11 67% of first- and second-grade students will demonstrate 10% growth from the fall administration to the spring administration in reading on the Terra Nova assessment.

38% of first grade and 37% of second-grade students

demonstrated 10% growth.

2011-12 70% of kindergarten through second-grade students will advance at least one level, or score Low Risk, by the spring administration on the DIBELS20 assessment.

70.6% of students advanced one level or scored Low Risk.

2012-13 60% of kindergarten through second-grade students will advance at least one level in reading on the DIBELS assessment.

68.0% of students advanced at least one level.

Renewal Standard

Did the school demonstrate annual consistent improvement in performance?

N/A The school’s performance decreased from 2011-12 to 2012-13,

however the standard was different. The school is unable to produce raw data permitting an apples to apples comparison.

19 Attainment of the EC PMF goal is not a standard for renewal and is included in this report for illustrative purposes only. 20 Dynamic Indicators of Basic Early Literacy Skills (“DIBELS”) assessment.

Renewal Standard


Yes While the school showed neither annual nor

consistent progress due to a change in assessment in SY11-12, the school showed an increase in

proficiency from 2010-11 to 2012-13.

Did the school select a more meaningful goal over time?

N/A The 2011-12 assessment was less rigorous than the 2010-11 assessment; the school then switched back

to the 2010-11 assessment in 2012-13.

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N/A Replacing the Terra Nova assessment with the DIBELS

assessment is not more meaningful; Terra Nova assesses a larger number of literacy skills. However the goal adopted for 2012-13

was one approved as part of the Early Childhood PMF.

2013 EC PMF Goal Attainment (not a renewal standard)


Yes Perry Street Prep PCS exceeded this goal’s 60% minimum threshold that was established by the EC PMF Task Force.

3. Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance in kindergarten through second grade math progress. The school will be deemed to have met this goal if (1) student performance has annually and consistently improved; and (2) the school has selected more meaningful goals over time. Assessment: Perry Street Prep PCS partially met this goal. It is impossible to assess annual consistent improvement because 2012-13 was the first year for the school to adopt a math progress goal. However the school did adopt a math goal, which was more meaningful than not having any math progress goal in place.

Perry Street PCS K-2nd Grade Math Progress Year Annual Goal Performance

2010-11 No math progress goal. None

2011-12 No math progress goal. None

2012-13 60% of kindergarten through second-grade students will make 0 or greater NCE in mathematics on the Terra Nova Assessment.

52.0% of students met this goal.

Renewal Standard Did the school demonstrate annual consistent improvement in performance?

N/A 2012-13 was the first year that the school adopted a mathematics

progress goal.


Yes It is more meaningful to have a math progress goal than to not have

one.



No Perry Street Prep PCS failed to meet the goal’s 60% minimum

threshold that was established by the EC PMF Task Force.

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Student Achievement 4. Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance in kindergarten through second grade literacy achievement. The school will be deemed to have met this goal if (1) student performance has annually and consistently improved; and (2) the school has selected more meaningful goals over time.

Assessment: Perry Street Prep PCS has met this goal. The school submitted supplemental data21 that demonstrated consistent annual improvement over time. While the school did not select a more meaningful goal over time it did adopt for 2012-13 a goal that was part of the EC PMF.

Perry Street PCS K-2nd Grade Literacy Achievement Year Annual Goal Performance

2010-11 70% of first and second-grade students will score in the low risk range on the DIBELS assessment.

The school only submitted data for 2nd grade students, of whom 41% were proficient.

2011-12 70% of first and second-grade students will score at or above 50 NCE in reading on the Terra Nova assessment.

60.0% of students scored at or above 50 NCE.

2012-13 60% of kindergarten through second grade students will score proficient or higher in reading on the DIBELS assessment.

67.0% of K-2 scored proficient or higher in reading on DIBELS.

Renewal Standard


Yes The school submitted supplemental data that show

improvement from 2010-11 to 2012-13 in the percent of students rated “low risk” on DIBELS assessment from 55% to

67%.


N/A Replacing the Terra Nova assessment with the DIBELS

assessment is not more meaningful; Terra Nova assesses a larger number of literacy skills. However this assessment was

approved under the Early Childhood PMF.



Yes The minimum threshold for this goal was established by the EC

PMF Task Force to be 60%. Perry Street Prep PCS exceeded this threshold.

21 See Appendix P.

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5. Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance in kindergarten through second grade math achievement. The school will be deemed to have met this goal if (1) student performance has annually and consistently improved; and (2) the school has selected more meaningful goals over time.

Assessment: Perry Street Prep PCS partially met this goal. While it is impossible to assess annual consistent improvement because 2012-13 was the first year for the school to adopt a math achievement goal, adopting this goal was more meaningful than not having any math achievement goal in place.

Perry Street PCS K-2nd Grade Math Achievement Year Annual Goal Performance

2010-11 No math assessment was given None

2011-12 No math assessment was given None

2012-13

60% of kindergarten through second-grade students will score at the 40th percentile or higher in mathematics on the Terra Nova assessment.

50.0% of students met this goal.

Renewal Standard


N/A 2012-13 was the first year that the

school adopted a math achievement goal.


Yes It is more meaningful to have a math

achievement goal than to not have one.



No The minimum threshold for this goal was established by the EC PMF Task Force to

be 60%. Perry Street Prep PCS did not meet this threshold.

Leading Indicators 6. Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance in pre-kindergarten attendance. The school will be deemed to have met this goal if (1) student performance has annually and consistently improved; and (2) the school has selected more meaningful goals over time.

Assessment: Perry Street Prep PCS has not met this goal. The school’s pre-kindergarten attendance rate did not improve consistently from year to year, and the school did not adopt more meaningful goals over time: it did not set a goal regarding pre-kindergarten attendance in 2011-12.

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Perry Street PCS Pre-Kindergarten Attendance Year Annual Goal Performance (prekindergarten only)

2010-11 On average, pre-kindergarten through second graders will attend school 92% of the days

Average Daily Attendance (“ADA”): 89.7% In-School Attendance (“ISA”): 89.2%

2011-12 No attendance PK attendance goal ADA: 92.8% ISA: 92.2%

2012-13 On average, pre-kindergarten-3 and pre-kindergarten-4 students will attend school 88% of the days

ADA: 87.8% ISA: 84.8%

Renewal Standard


No The school’s pre-kindergarten attendance rate did not

improve consistently from year to year.


No The school had a combined attendance goal for PK-2 with a

higher threshold in SY2010-11 and did not set a PK attendance goal in 2011-12.



No The minimum threshold was 88% ADA. The school missed

this threshold.

7. Goal: Perry Street Prep PCS will demonstrate annual consistent improvement in performance in kindergarten through second grade attendance. The school will be deemed to have met this goal if (1) student performance has annually and consistently improved; and (2) the school has selected more meaningful goals over time.

Assessment: Perry Street Prep PCS has met this goal. The school’s kindergarten through second grade attendance rate as measured by average daily attendance improved consistently from 2010-11 to 2012-13 while in seat attendance stayed flat. While the school did not adopt a more meaningful goal over time the goal it did adopt was part of the EC PMF.

Perry Street PCS K-2nd Grade Attendance Year Annual Goal Performance

(grades K-2 only)

2010-11 On average, pre-kindergarten through second graders will attend school 92% of the days

ADA: 89.8% ISA: 89.3%

2011-12 On average, kindergarten through second grade students will attend school 92% of the days

ADA: 88.7% ISA: 87.9%

2012-13 On average, kindergarten through second grade students will attend school 92% of the days

ADA: 90.9% ISA: 89.2%

Renewal Standard Did the school demonstrate annual consistent improvement in performance?

Yes The school’s kindergarten through second

grade average daily attendance rate

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improved by 1.1% and its in-seat attendance rate stayed the same.


N/A In 2011-12 and 2012-13 the school had the same annual goal for K-2nd grade attendance and in SY2010-11 had a

combined goal for PK-2. However this assessment was approved under the Early

Childhood PMF.



No The minimum threshold was 92% ADA.

The school missed this threshold.

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2010-11 Early Childhood Performance Report

School Performance Report 2010–2011

DC Public Charter School Board School Performance Report © 2011

Progress Results Met Target?Student Progress 2010–2011 Targets

40% of students scored at or above grade level. No¡ 70% of pre-kindergarten students will score ator above grade level on the BriganceDevelopmental Inventory.

41% of students in second grade scored in the low No¡ 70% of first- and second-grade students willrisk range, at or above grade level.score in the low risk range on the Dynamic(Results unavailable for first grade*)Indicators of Basic Early Literacy Skills (DIBELS)

assessment.

Achievement Results Met Target?Student Achievement 2010–2011 Targets

38% of students demonstrated 10% growth. No¡ 67% of first-grade students will demonstrate10% growth from the fall administration to thespring administration in reading on the TerraNova assessment.

37% of students demonstrated 10% growth. No¡ 67% of second-grade students willdemonstrate 10% growth from the falladministration to the spring administration inreading on the Terra Nova assessment.

Leading Indicators Results Met Target?Leading Indicators 2010–2011 Targets

The average daily attendance was 90.8%. No¡ On average, pre-kindergarten throughsecond-grade students will attend school 92%of the days.

*Primary source data were not available at the time of review.

Targets Met: 0Targets Missed: 5

Perry Street Prep PCS - Lower School

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2012 School Performance Report

Perry Street Preparatory PCS

Progress Results Met Target?Student Progress Targets

66.7% of students demonstrated growth or scored No¡ 70% of pre-kindergarten-4 students willat least 90.demonstrate 10 points of growth, or score at

least 90 points, by the spring administration onthe Brigance Preschool Screen II.

70.6% of students advanced one level or scored Yes¡ 70% of kindergarten through second-gradeLow Risk.students will advance at least one level, or

score Low Risk, by the spring administration onthe Dynamic Indicators of Basic Early LiteracySkills (DIBELS) assessment.

Achievement Results Met Target?Student Achievement Targets

60.0% of students scored at or above 50 NCE. No¡ 70% of first and second-grade students willscore at or above 50 NCE in reading on theTerra Nova assessment.

Leading Indicators Results Met Target?Leading Indicators Targets

The average daily attendance was 92.8%. Yes¡ On average, kindergarten throughsecond-grade students will attend school 92%of the days.

TOTAL TARGETS MET OF

244 DC Public Charter School Board © 2013

18


(2012–13)



Perry Street Preparatory PCS – Lower School

Progress Results Met Target?Student Progress Targets

92.0% of students met this goal. Yes 60% of pre-kindergarten-3 andpre-kindergarten-4 students will progress toage equivalency in literacy/language on theBrigance Developmental InventoryStandardized assessment.

68.0% of students met this goal. Yes 60% of kindergarten through second gradestudents will advance at least 1 level in readingon the Dynamic Indicators of Basic EarlyLiteracy Skills assessment.

52.0% of students met this goal. No 60% of kindergarten through second gradestudents will make 0 or greater NCE inmathematics on the Terra Nova assessment.

Achievement Results Met Target?Student Achievement Targets

67.0% of students met this goal. Yes 60% of kindergarten through second gradestudents will score proficient or higher inreading on the Dynamic Indicators of BasicEarly Literacy Skills assessment.

50.0% of students met this goal. No 60% of kindergarten through second gradestudents will score at the 40th percentile orhigher in mathematics on the Terra Novaassessment.

Leading Indicators Results Met Target?Leading Indicators Targets

The average daily attendance was 87.9%. No On average, pre-kindergarten-3 andpre-kindergarten-4 students will attend school88% of the days.

The average daily attendance was 91.0%. No On average, kindergarten through secondgrade students will attend school 92% of thedays.

TOTAL TARGETS MET OF

Grades measured: PK3–2

19

LOWER SCHOOL Third through Eighth Grades

8. Goal: Perry Street Prep PCS’ third-eighth grade program will demonstrate annual consistent improvement in performance on PCSB’s Elementary/Middle School PMF, with no PMF score below 40% in the past two years; or earn at least 45% of the possible points on the PMF for the two academic years prior to review.

Assessment: Perry Street Prep PCS’ lower school has met its goals and academic expectations. Its PMF score has consistently improved, and in 2011-12 and 2012-13 its PMF score was above 40% - which satisfies the standard described below.

Standard to meet Elementary/Middle School PMF Goals and Academic Expectations Per the school’s July 2013 charter amendment,22 Perry Street Prep PCS’ third through eighth grade program will be deemed to have met its goals and academic expectations if it fulfills either or both of the two following conditions:

(a) Demonstrates annual consistent improvement in performance on the PMF, with no PMF score below 40% in the two academic years preceding its fifteenth year in operation; and/or

(b) Earns a PMF score of 45% or more in the two academic years prior to renewal assessment.

Perry Street Prep PCS’ Lower School has met its goals and expectations – it fulfilled the first of the above two renewal standards, with its PMF score consistently improving over three academic years, and in 2011-12 and 2012-13 PMF scores above 40%. The school’s Lower School PMF Scorecards are detailed in full on the following pages of this report.

Perry Street Prep PCS Lower School PMF Performance on

grades 3-8th grades

2010-11 2011-12 2012-13

35.6% Tier 2

43.4% Tier 2

47.2% Tier 2

22 See Appendix F.

20

2010-11 Third through Eighth Grade PMF Performance Report

Points EarnedPoints Possible

Percent of Possible Points

Student Progress (40 points): Academic improvement over time

Growth on DC-CAS Reading over time

Growth on DC-CAS Mathematics over time

Leading Indicators (20 points): Predictors of future student progress and achievement

Attendance0 100

Re-enrollment in this school0 100

TOTAL SCORE TIER



9055

0 100Floor Goal

ScoreKEY

85 95

Student Achievement (25 points): Meeting or exceeding academic standards

Elementary grades DC-CAS Reading

Proficient and Advanced0 100

Advanced only0 100

Elementary grades DC-CAS Mathematics


Advanced only0 100

Middle grades DC-CAS Reading


Advanced only0 100

Middle grades DC-CAS MathematicsProficient and Advanced

0 100

Advanced only0 100

Gateway (15 points): Outcomes in key subjects that predict future educational success

Proficient and Advanced 3rd grade Reading

0 100

Proficient and Advanced 8th grade Mathematics

0 100

22

25

25

25

25

18

17

22

25

10

For a more detailed explanation of the indicators, see our user guide.

0 100

0 100

30 70

7030

Perry Street Prep PCS - Lower School

46.0

46.8

8.020.0

8.420.0

1.015.0

0.121.25

0.725.0

0.191.25

0.875.0

0.241.25

1.845.0

0.271.25

1.837.5

4.177.5

4.210.0

3.710.0

35.6100.0

40.1%

42.0%

20.2%

9.2%

14.4%

15.4%

17.5%

19.0%

36.8%

21.4%

24.4%

55.6%

42.1%

37.4%

35.6%

37.7

2.3

23.1

37.5

89.2

67.8

2

3.8

38.1

4.8

48.2

5.4

65.2

Grades measured: 3–8

21





Growth on DC-CAS Reading over time0 100

13.620.0

68.1%

Growth on DC-CAS Mathematics over time0 100

18.620.0

93.2%




3.05.0

60.3%

Advanced only0 100

0.41.25

32.0%



2.85.0

55.5%

Advanced only0 100

0.61.25

44.0%



2.55.0

50.7%

Advanced only0 100

0.81.25

60.0%


0 100

3.25.0

64.6%

Advanced only0 100

0.61.25

48.0%



0 100

5.37.5

71.0%


0 100

4.67.5

61.7%


Attendance0 100

10.010.0

100.0%


10.010.0

100.0%

TOTAL SCORE TIER 55.6

100.055.6%

30 70

7030



24

25

25

25

25

24

17

22

9057

28

15

0 100Floor Goal

ScoreKEY

85 95


46.8

50.2

8.420.0

10.120.0

1.25.0

0.131.25

1.15.0

0.391.25

0.65.0

0.191.25

2.05.0

0.461.25

0.027.5

4.07.5

7.910.0

6.910.0

43.4100.0

42.0%

50.5%

23.4%

10.4%

22.0%

31.3%

12.3%

15.2%

40.2%

37.0%

0.3%

53.9%

79.0%

69.0%

43.4%

41.7

2.6

33.9

17.6

92.9

79.7

➋

7.8

36.4

3.8

54.3

9.2

63.9



22


(2012–13) Points EarnedPoints Possible








Advanced only0 100



Advanced only0 100



Advanced only0 100


0 100

Advanced only0 100



0 100


0 100


Attendance0 100


TOTAL SCORE

30 70

7030




27

25

25

25

25

31

17

29

9060

29

20

0 100Floor Goal

ScoreKEY

85 95


48.4

60.8

9.220.0

15.420.0

1.15.0

0.11.25

1.05.0

0.31.25

1.25.0

0.271.25

1.75.0

0.621.25

2.47.5

3.57.5

7.310.0

3.110.0

47.2100.0

46.0%

77.0%

22.0%

7.2%

20.0%

27.2%

24.0%

21.6%

34.0%

49.6%

32.0%

46.7%

73.0%

31.0%

47.2%

43.3

1.7

35.8

43.9

92.3

69.3

6.7

45.6

5.3

54.7

12.4

62.1


TIER 2

23

UPPER SCHOOL Ninth through Twelfth Grades

9. Goal: Perry Street Prep PCS’ upper school (ninth through twelfth grades) will demonstrate annual consistent improvement in performance on PCSB’s High School PMF, with no PMF score below 40% in the past two years; or earn at least 45% of the possible points on the PMF for the two academic years prior to review.

Assessment: Perry Street Prep PCS’ upper school failed to meet its goals and academic expectations. 23 It did not meet either of the renewal standards detailed below. Standard to meet PMF Goals and Academic Expectations Per the school’s July 2013 charter amendment,24 Perry Street Prep PCS--Upper School will be deemed to have met its goals and academic expectations if it meets either or both of the two following conditions:

(a) Demonstrates annual consistent improvement in performance on the PMF, with no PMF score below 40%; and/or

(b) Earns a PMF score of 45% or more in the two academic years prior to review.

Perry Street Prep PCS’ high school has not met its goals and expectations because it did not meet either of the above renewal standards. The school’s High School PMF Scorecards are detailed in full on the following pages of this report.

23 While PCSB’s typical renewal analysis includes a detailed analysis of the school’s previous five years in operation, given the school’s change in mission and management at the end of the 2009-10 school year, as well as its 2013 amendment to adopt the PMF, PCSB’s analysis of the school’s ninth through twelfth grade performance begins in 2010-11, as opposed to 2009-10. 24 See Appendix F.

Perry Street Prep PCS Upper School PMF Performance

2010-11 2011-12 2012-13

46.6% Tier 2

37.6% Tier 2

31.7% Tier 3

24

2010-11 Ninth through Twelfth Grade PMF Performance Report



Student Progress (15 points): Test score improvement over time

Growth on DC-CAS Reading over time

Growth on DC-CAS Mathematics over time


Attendance0 100


9th grade credits (on track to graduate)0 100

TOTAL SCORE TIER



9059

33

0 100Floor Goal

ScoreKEY

85 95

Student Achievement (30 points): Meeting or exceeding standards

Reading 10th DC-CAS

Proficient and Advanced 0 100

Advanced only0 100

Mathematics 10th DC-CAS


Advanced only0 100

Advanced Placement and International Baccalaureate performance (12th)

0 100

Gateway (30 points): Outcomes aligned to college and career readiness

Graduation rate0 100

PSAT performance (11th)0 100

SAT performance (12th)0 100

College acceptance rate0 100

24

20

25

25

82

10 75

50

63

15


0 100

0 100

6530

30 65

Perry Street Prep PCS - Upper School


64.9

62.1

89.2

76.2

2

7.57.5

6.97.5

6.410.0

1.12.5

3.910.0

0.62.5

0.05.0

1.77.5

3.17.5

1.77.5

3.87.5

4.210.0

5.510.0

0.05.0

46.6100.0

99.6%

91.8%

64.1%

45.2%

39.3%

25.8%

0.0%

23.1%

41.4%

22.9%

50.8%

42.0%

55.5%

0.0%

46.6%

72.6

11.3

51.6

6.5

0.0

86.0

20.7

24.6

82.0

23.6

25






1.57.5

68.1%


4.37.5

93.2%


Reading 10th DC-CAS


2.510.0

60.3%

Advanced only0 100

0.22.5

32.0%

Mathematics 10th DC-CAS


2.710.0

55.5%

Advanced only0 100

1.22.5

44.0%


0 100

2.35.0

50.7%



6.77.5

71.0%


3.07.5

61.7%


2.37.5

61.7%


6.77.5

61.7%


Attendance0 100

6.010.0

86.7%


10.010.0

100.0%


3.15.0

62.0%

TOTAL SCORE TIER

26

6530



30 65

20

25

25

57

10

3

75

50

63

9064

44

15

0 100Floor Goal

ScoreKEY

85 95

Perry Street Preparatory PCS – Upper School


44.1

44.9

92.0

79.7

➋

3.07.5

3.27.5

0.510.0

0.22.5

0.610.0

0.12.5

1.65.0

3.17.5

0.07.5

0.87.5

7.57.5

7.010.0

6.010.0

4.05.0

37.6100.0

40.3%

42.6%

5.0%

6.7%

6.2%

3.4%

32.1%

41.3%

0.0%

10.2%

100.0%

70.0%

60.4%

80.1%

37.6%

30.1

1.7

25.2

0.8

4.8

75.0

0.0

16.3

100.0

88.7


26


(2012–13) Points EarnedPoints Possible







Advanced only0 100


Advanced only0 100


0 100







Attendance0 100



TOTAL SCORE

26

6530



30 65

20

25

25

57

10

4

75

50

66

9065

51

15

0 100Floor Goal

ScoreKEY

85 95


High grades DC-CAS Reading

High grades DC-CAS Mathematics

Perry Street Preparatory PCS – Upper School


41.4

36.8

82.9

79.1

2.47.5

1.57.5

1.410.0

0.52.5

2.610.0

0.12.5

0.05.0

4.47.5

0.97.5

1.67.5

7.57.5

0.010.0

5.710.0

3.15.0

31.7100.0

32.0%

20.0%

14.0%

20.0%

26.0%

4.0%

0.0%

58.7%

12.0%

21.3%

100.0%

0.0%

57.0%

62.0%

31.7%

36.7

5.1

41.4

1.0

0.0

82.0

8.9

24.2

100.0

81.6

TIER ➌

27

SUBGROUP GOALS

In its 2013 amendment, the school adopted two other goals – one related to the academic performance of its students with disabilities, and the other related to the reading proficiency of its English language learners. For purposes of this renewal assessment, PCSB analyzed the performance of the school’s third through twelfth grades in determining whether the school had met these two school-wide goals because there is no data available to assess the school’s early childhood program. 10. Goal: All students with disabilities will make at least 5% growth in the areas of reading and math on the district approved statewide assessment annually.

Assessment: Perry Street Prep PCS has partially met this goal. The school met the goal in reading but did not meet the goal in math.

Overview of School’s Special Education Population Perry Street Prep PCS serves a slightly higher proportion of students with disabilities (“SWD”) than the charter sector average:

• 14.9% of Perry Street Prep PCS’ students have been identified as SWDs requiring special education services.

• 13.3% of all DC students have been identified as SWDs requiring special education services.

However, 83.8% of the school’s special education students are classified as “Level 1” or “Level 2”, which require a lesser level of special education services.

Percentage of students with disabilities identified at each special education service level25

Level 1 Level 2 Level 3 Level 4 Perry Street Prep PCS 29.8% 54.0% 6.5% 9.7%

District of Columbia 36.1% 32.1% 11.5% 20.3%

Special Education Reading and Math Proficiency While the reading proficiency rate of Perry Street Prep PCS’ students with disabilities (“SWD”) continues to be below the rate of the charter sector, the school met its goal of a 5% increase from 2011-12 (baseline) to 2012-13, experiencing a 10% rate increase in reading proficiency from 2011-12 to 2012-13.

25 Too few tenth grade special education students took the DC-CAS for their performance data to be reported separately.

28

The math proficiency rate of Perry Street Prep PCS’ students with disabilities is below the state average and it did not improve its percent proficient by 5%; instead, the school experienced a decline of 8% from its baseline performance in 2011-12 to 2012-13.

Math Growth 11-12 12-13 Percent of Perry Street Prep PCS SWD Scoring Proficient or Advanced on DC-CAS Math

10.8% 10.0%

Met Growth Target? (5% Increase over previous year

No (11.3%)

11. Goal: Eighty percent of non-proficient English language learners will make improvements within their English language proficiency level as demonstrated on the annual ACCESS exam, which measures students’ speaking, writing, reading, and listening comprehension skills.

Assessment: Perry Street Prep PCS has met this goal. 100% of the school’s English language learners (“ELL”) demonstrated improvement on the ACCESS exam from 2011-12 to 2012-13.26

Overview of School’s ELL Population Perry Street Prep PCS serves a significantly lower proportion of English language learners (“ELL”) than the charter sector average:

• 0.4% of Perry Street Prep PCS’ students have been identified as ELLs. • 8.8% of all DC students have been identified as ELLs.

Year

% of English language learners whose ACCESS

exam score increased from 2011-12 to 2012-13

Number of English language learners that both attended the school and took

this assessment in the prior academic year

Total Number of ELL students

2012-13 100% 10 24

26 The school submitted ACCESS exam reports to PCSB, but they are not included in this report’s appendices due to concerns for student privacy.

Reading Growth 11-12 12-13 Percent of Perry Street Prep PCS SWD Scoring Proficient or Advanced on DC-CAS Reading

7.7% 8.5%

Met Growth Target? (5% increase over previous year) Yes

(8.1%)

29

SECTION TWO: COMPLIANCE WITH APPLICABLE LAWS

The SRA requires that PCSB shall not approve a renewal application if it determines that the school has “committed a material violation of applicable laws or a material violation of the conditions, terms, standards, or procedures set forth in its charter, including violations relating to the education of children with disabilities.”27 The SRA contains a non-exhaustive list of applicable laws, and PCSB also monitors charter schools for compliance with additional laws in annual compliance reviews.

Since 2009-10, PCSB has found in its annual compliance reviews that Perry Street Prep PCS has been in substantial compliance with all applicable laws detailed in the table below.

Compliance Item Description School’s Compliance Status 2009-10 to present

Fair enrollment process SRA § 38-1802.06

DC charter schools must have a fair and open enrollment process that randomly selects applicants and does not discriminate against students.

Compliant since 2009-10

Notice and due process for suspensions and expulsions

SRA § 38-1802.06(g)

DC charter school discipline policies must afford students due process28 and the school must distribute such policies to students and parents.


Student health and safety SRA § 38-1802.04 (c)(4); DC Code §4-1321.02; DC Code § 38-651

The SRA requires DC charter schools to maintain the health and safety of its students.29 To ensure that schools adhere to this clause, PCSB monitors schools for various indicators, including but not limited to whether schools:

- have qualified staff members that can administer medications;

- conduct background checks for all school employees and volunteers; and

- have an emergency response plan in place and conduct emergency drills as required by DC code and regulations.


27 SRA § 38.1802.12(c). 28 See Goss v. Lopez, 419 U.S. 565 (1975). 29 SRA § 38.1802.04 (c)(4)(A).

30

Equal employment SRA §§ 38-1802(c)(5)

A DC charter school’s employment policies and practices must comply with federal and local employment laws and regulations.


Insurance As required by the school’s charter

A DC charter school must be adequately insured. Compliant since 2009-10

Facility licenses DC code § 47-2851.03(d); DC regulation 14-1401

A DC charter school must possess all required local licenses. Compliant since 2009-10

High Quality Teachers Elementary and Secondary Education Act (“ESEA”)

DC charter schools receiving Title I funding must employ “Highly Qualified Teachers” as defined by ESEA.


Proper composition of board of trustees SRA § 38-1802.05

A DC charter school’s Board of Trustees must have: an odd number of members that does not exceed 15; a majority of members that are DC residents; and at least two members that are parents of a student attending the school.


Articles of incorporation and by-laws SRA § 38-1802.02(8)

A DC charter school must have up-to-date articles of incorporation and by-laws.


Accreditation Status SRA § 38-1802.02(16)

A DC charter school must maintain accreditation from an SRA-approved accrediting body approved by the SRA.

Accreditation by Middle States Association of Colleges and Schools in progress

February 2013 Notice of Concern In February 2013 the PCSB Board issued a Notice of Concern to Perry Street Prep PCS, based on significant discrepancies that emerged when the school’s internal attendance records were compared against the records submitted to ProActive.30 The Board lifted the Notice of Concern in June 2013 after

30 See Board Action, Notice of Concern – Perry Street Prep PCS, dated February 25, 2013, attached to this report as Appendix K.

31

(1) a third attendance audit found five randomly selected records matched the ProActive attendance data, and (2) corrections were made to all attendance records so that the school’s truancy rate could be calculated accurately.31

DC CAS Testing Violations In March 2012, OSSE engaged a consulting firm to investigate Perry Street Prep PCS for possible DC CAS testing violations during the 2010-11 school year – the last year that the school had operated as Hyde PCS, and also the last year it partnered with the Hyde Foundation.32

The investigators found that two instances of testing irregularities had occurred at Perry Street Prep PCS: (1) the school’s Test Security Plan was incomplete (required sign-in/out sheets – necessary to confirm the school had followed test security procedures – were missing); and (2) two third grade students each described in separate interviews that the same teacher improperly assisted students on the exam.33

The consulting firm classified Perry Street Prep PCS’ testing violations as “critical,” basing this designation on “[o]verall, the relative severity of the findings at [the school].34 Perry Street Prep was one of only three schools in the District of Columbia to be identified as having a “Critical” testing violation, of the 70 total schools that had been flagged for investigation.35

Procurement Contracts SRA §38-1802.04(c)(1) requires DC charter schools to utilize a competitive bidding process for any procurement contract valued at $25,000 or more, and within three days of awarding such a contract, to submit to PCSB all bids received, the contractor selected, and the rationale for which contractor was selected. To ensure compliance with this law, PCSB requires schools to submit a “Determinations and Findings” form to detail any qualifying procurement contract that the school has executed. From FY2009-2011, Perry Street Prep PCS submitted determination and finding forms for twelve contracts valued at or above $25,000. In FY 2011, the school reported to PCSB 28 $25,000+ expenditures through annual reporting outside of the annual audits and submitted only one determination and findings form, and in FY2012 the school did not submit a schedule of $25,000+ expenditures nor any determination and finding forms. From the annual reports outside of the audits, it was unclear from the school’s submissions how many of these expenditures were procurement contracts required by the SRA to be competitively bid. In an effort to reconcile the record on fiscal years 2011 and 2012 contract submission, PCSB required Perry Street Prep PCS to submit documentation for expenditures identified in their annual audits for those fiscal years. Perry Street Prep PCS identified 74 expenditures that were

31 See Appendix D. 32 See School Summary Report, Hyde Leadership PCS, 2011 District of Columbia Comprehensive Assessment System, Test Security Investigation, p. 3-4, by Alvarez & Marshall, LLC, attached to this report as Appendix L. 33 See Appendix L, p. 3. 34 A “critical” designation means that “test tampering or academic fraud” have occurred. See OSSE 2011-12 DC-CAS Test Integrity Presentation, p. 13, attached to this report as Appendix M. 35 See Appendix M, p. 14.

32

procurement expenditures subject to the provisions of the SRA. Of those 74, 26 of the expenditures were renewal contracts for which PCSB did not have the original contracts. Perry Street subsequently submitted the required contracts for those expenditures for all but three expenditures; the remaining three expenditures were not executed pursuant to contracts, but rather pursuant to invoices that contained the terms and conditions of purchase which Perry Street Prep PCS provided to PCSB. As such, Perry Street Prep PCS has reconciled the record. For fiscal year 2013, Perry Street Prep PCS was in compliance with the contract and procurement requirements of the SRA. While fiscal years 2011 and 2012 appear to be anomalies in an otherwise history of compliance with the contract and procure requirements of the SRA, PCSB cannot ignore the seriousness of these transgressions. PCSB hereby notifies Perry Street Prep PCS that it considers these fiscal years of non-compliance the beginning of a pattern of fiscal mis-management, and that if such non-compliance occurs again, particularly in the next couple of fiscal years, PCSB will consider initiating revocation of the school’s charter.

Special Education Compliance

Charter schools are required to comply with all federal and local special education laws, including, among others, the Individuals with Disabilities Education Act36 (“IDEA”) and the Rehabilitation Act of 1973.37 The following section summarizes Perry Street Preparatory PCS’ special education compliance from 2010-11 to the present.

References to Special Education in School Charter References in a school’s Charter to special education must comply with special education laws. Perry Street Prep PCS’ description in its Charter of its special education programming complies with special education laws. OSSE Special Education Compliance Reviews The DC Office of the State Superintendent of Education (“OSSE”) monitors charter schools’ special education compliance and publishes three types of reports detailing these findings: (1) Annual Determinations; (2) On-Site Monitoring Reports; and (3) Quarterly Findings. OSSE’s findings of Perry Street Prep PCS’ special education compliance are summarized below.

Annual Determinations As required by federal regulation, OSSE analyzes annually each LEA’s compliance with 20 special education indicators, and publishes these findings in an Annual Determination report.38 Each year’s report is based on compliance data collected several years earlier. As such, OSSE does not require schools to cure any compliance issues detailed in these reports. In 2012, OSSE published its 2010 Annual Determination reports (based on the school’s 2009-10 performance). In this report, it found

36 20 USC §1413(a)(5). 37 20 USC §794. 38 As required by federal regulation 34 CFR § 300.600(c).

33

Perry Street Prep PCS to be 62% compliant with these indicators, and designated the school as “Need[ing] Assistance,” based on the school’s compliance in school years 2009-10.39

In August 2013, OSSE published its 2011 Annual Determination reports (based on the school’s 2010-11 performance). It found the school to be 53% compliant with these indicators, and designated the school as “Need[ing] Intervention,” based on the school’s compliance in 2007-08 and 2008-09.40

On-Site Monitoring Report OSSE periodically conducts an on-site assessment of an LEA’s special education compliance with student-level and LEA-level indicators, and publishes its findings in an On-Site Monitoring Report. If a school is found to be less than 80% compliant with a student-level indicator, it must implement corrections and report these corrections to OSSE within 365 days.

In 2011-2012, OSSE published an on-site Compliance Monitoring Report of Perry Street Prep PCS, finding the school to be less than 80% compliant in 27 of 28 student-level compliance indicators, and less than 100% compliant in 9 of 26 LEA-level compliance indicators.41

STUDENT-LEVEL COMPLIANCE LEA-LEVEL COMPLIANCE

Compliance Area

Number of indicators where

school was less than 80% compliant

Compliance Area

Number of indicators

where school was less than

100% compliant

Initial Evaluations and Reevaluations 6 out of 6

Data Verification 1 out of 1

IEP Development 10 out of 10

Dispute Resolution 0 out of 3

Least Restrictive Environment 1 out of 2 Access to Instructional

Materials 0 out of 1

Discipline 2 out of 2 Fiscal 8 out of 21

Data Verification 8 out of 8

Total 27 out of 28 Total 9 out of 26 As of October 2013, OSSE has verified that the LEA has implemented corrections for all student-level violations that were possible to remedy retroactively, and that OSSE is still in the process of reviewing some LEA-level corrections submitted by the school.

39 See FFY 2010 IDEA Part B LEA Performance Determination, attached to this report as Appendix N. 40 See Appendix N. OSSE assigns to each LEA one of the following “Determination Level”: (1) meets requirements, (2) needs assistance, (3) needs intervention, or (4) needs substantial intervention. 41 If the school was found to be less than 80% compliant with a student-level indicator that was impossible for the school to cure retroactively, OSSE would identify the point of noncompliance as an LEA-level violation as well. However, for purposes of this report PCSB did not include as an LEA-level violation any such student-level point of noncompliance.

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Quarterly Findings OSSE submits quarterly reports to the U.S. Department of Education’s Office of Special Education Programs detailing District of Columbia LEAs’ compliance in three areas: (1) Initial and Reevaluation Timeliness; (2) Early Childhood Transition Timelines; and (3) Secondary Transition Requirements.

In 2012 and 2013, OSSE found in all four of its Quarterly Findings reports that Perry Street Prep PCS was noncompliant with federal law in providing secondary transition requirements. The LEA has corrected the findings from the first three reviews, and has an August 2014 deadline to respond to FY13 Quarter One noncompliance finding regarding secondary transitions.42

42 As per the OSSE DC Corrective Action Tracking System Database.

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SECTION THREE: FISCAL MANAGEMENT AND ECONOMIC VIABILITY

Separate and apart from the standard for charter renewal, the SRA requires that PCSB Board shall revoke a school’s charter if PCSB determines that the school:

• Has engaged in a pattern of nonadherence to generally accepted accounting principles; • Has engaged in a pattern of fiscal mismanagement; or • Is no longer economically viable.

In the following section PCSB has analyzed Perry Street Prep PCS’ financial record in these areas. While the school is economically viable, it has engaged in fiscal mismanagement. These issues, detailed below, do not at this time rise to a pattern of fiscal mismanagement. Important to this determination is the schools’ stronger, unqualified FY2013 audits.

However, if any future audits or other findings identify the school’s nonadherence to GAAP and/or fiscal mismanagement, such findings – taken together with the findings below – could rise to a pattern requiring revocation of the school’s charter.

Adherence to Accounting Principles and Fiscal Mismanagement Audits of Perry Street Prep PCS’ federal funds establish that the school engaged in several incidents of fiscal mismanagement. While the schools adhered to generally accepted accounting principles, material weaknesses in internal control over financial reporting have been identified. These findings, detailed below, do not at this time rise to a pattern of fiscal mismanagement.

Scope of Single Audits A Single Audit is a federally-required audit that all entities expending in excess of $500,000 of federal funds must conduct43. Single Audits have two components: a review of the school’s (1) internal control over its financial reporting, and (2) its compliance with applicable laws and regulations in its management of federal funds.44 Single Audits identify any “material weaknesses”45 or “significant deficiencies”46 in either of these components.

43 Per the federal Single Audit Act of 1984, as amended by the Single Audit Act Amendments of 1996, 43 any entity that receives $500,000 or more in federal funding is required to undergo a “Single Audit” conducted by an independent, external auditor, in accordance with the Office of Management and Budget’s Circular A-133 (“OMB A-133”). 44 31 U.S.C.A. § 7502. 45 A “material weakness” is defined by PSP PCS’ auditor as “a deficiency, or a combination of deficiencies, in in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected on a timely basis.” See FY2013 Single Audit, p. 1. 46 A “significant deficiency” is identified by the auditor as existing “when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis.”

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Overview of Perry Street Prep PCS’ Single Audit Findings The chart below summarize the school’s single audit findings, and each finding is further detailed in Appendix Q of this report.47 An auditor identified material weaknesses in the school’s internal control of financial reporting in FY2010, FY2011, and FY2012.48

Auditor’s Findings of School’s Internal Control over Financial Reporting

Year

Qualified or unqualified

auditor’s report?

Material weaknesses identified?

Significant deficiencies identified?

FY10 Unqualified 1 1 FY11 Unqualified 4 3 FY12 Unqualified 2 0 FY13 Unqualified 0 0 The school received a qualified report regarding its legal compliance related to federal awards in FY2010 and FY2011, and the auditor identified material weaknesses in this area in FY2010, FY2011, and FY2012.

Auditor’s findings of school’s compliance with applicable laws and regulations in its management of federal funds

Year

Qualified or unqualified

auditor’s report?

Material weaknesses identified?

Significant deficiencies identified?

FY10 Qualified 1 0 FY11 Qualified 2 2 FY12 Unqualified 1 2 FY13 Unqualified 0 0 In two cases, the auditor identified similar findings related to the school’s internal financial controls in two consecutive fiscal years.

• In FY2010 and FY2011, general ledger accounts were not reconciled on a monthly basis; and • In FY2010 and FY2011, no review and approval of journal entries was posted by the chief

operating officer throughout the year.

Required corrective action following single audit findings Based on the school’s FY2011 and FY2012 findings, OSSE required the school to take extensive

47 See analysis of Perry Street Prep PCS’ single audit findings, attached to this report as Appendix Q. 48 See Perry Street Prep PCS single audits, attached to this report as Appendix R.

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corrective action regarding its management of federal funds. The required corrective action can be reviewed in full in Appendices R and S to this report.49

As part of this corrective action, Perry Street Prep PCS was required to repay $370,096 in federal Title I grant money after it was identified in its FY2011 single audit that it had not met federal requirements associated with this grant money.50 The school submitted to the federal government estimates of its employees’ hours to be charged to the federal programs rather than actual timesheets. This is disallowed by the regulations promulgated by the federal Office of Management and Budget.

Economic Viability Perry Street Prep PCS is economically viable, based on the school’s financial performance, sustainability, liquidity, and debt burden, as described below.51

Financial Performance PCSB assesses a school’s financial performance with two key indicators. The first indicator is a school’s “operating result” – how much its total annual revenues exceed its total annual expenditures. In general, PCSB recommends that a school’s annual operating results equal at least zero. Another indicator of a school’s financial performance is its earnings before depreciation (“EBAD”)52, a financial performance measure that eliminates the effects of financing and accounting decisions.

The school’s performance according to these two indicators was impacted by two separate events. First, in FY2009, as the school transitioned from Hyde Leadership PCS to Perry Street Prep PCS, the school invested in updating its academic program. Second, the school leased and moved into a new building in FY2011, which caused its building and grounds expenses to increase by approximately $1.8 million (from $1.1 million in FY 2010 to $2.9 million in FY 2011). This increase included several expenditures, such as paying for the school’s move into the newly leased building, constructing a building addition, and paying an outstanding $500,000 rent payment that the school had unintentionally not previously posted.

Given these expenses, the school has had fluctuating operating results and EBAD from FY 2009 to present. However, its financial performance was strong, with the school producing a $2.1 million operating surplus in FY2012 and $1.8 million operating surplus in FY2013. Perry Street Prep PCS had positive earnings before depreciation in three of the past five fiscal years, including the most recent FY2013.

49 See October 1, 2012 letter from Iris Bond Gill, OSSE Director of Federal Grants Compliance to Shadwick Jenkins, Perry Street Prep PCS Head of School, attached to this report as Appendix S; see also September 25, 2013 letter from Dr. Unique Morris, OSSE Deputy Director of Grants Management and Compliance, to Shadwick Jenkins, Perry Street Prep PCS Head of School, attached to this report as Appendix T. 50 See Appendix R; see also December 7, 2012 letter from Iris Bond Gill, OSSE Director of Federal Grants Compliance to Board of Directors of Perry Street Prep PCS, attached to this report as Appendix U. 51 See Perry Street Preparatory PCS, Activities and Financial Analysis Sheet, attached to this report as Appendix O. 52 EBAD is the change in net assets plus amortization and depreciation.

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Fiscal Period 2009 2010 2011 2012 2013

Operating Result $(490,534) $1,639,264 $(1,692,618) $2,075,710 $1,787,693

EBAD $(300,196) $1,836,254 $(935,021) $3,278,133 $2,888,370

Expenditures Perry Street Prep PCS’ spending decisions, illustrated in the graph below, are aligned with PCSB’s financial metrics for general education public charter schools. 53

Sustainability A school’s net assets54 and primary reserve ratio demonstrate its sustainability.55 PCSB recommends that schools accrue net asset reserves equal to three to six months of operating expenditures and PCSB would be concerned with net assets reserves below zero. In FY2013, the school’s net asset reserves of $8.6 million equaled approximately 6.9 months of operating expenditures (the school’s monthly expenditures are approximately $1.3 million).

The school’s FY2013 primary reserve ratio was 0.57, meaning that its net asset reserves equals 47% of its annual expenditures, an improvement from FY2012. The table below details the school’s net assets and primary reserve ratios over the past four years.

Fiscal Period 2009 2010 2011 2012 2013 Net Assets56 $4,551,999 $6,191,263 $4,498,645 $6,845,921 $8,603,107

Primary Reserve Ratio 0.38 0.51 0.32 0.47 0.57

53 Note that the percentage does not equal 100% because revenue exceeded expenditures in fiscal year 2013. 54 Net Assets equals total assets minus total liabilities. 55 Primary Reserve Ratio equals total net assets divided by total annual expenses. 56 Note that there were beginning balance readjustment in fiscal year 2012 due to a liability account error, which understated the beginning net assets by $271,566.

65% 15% 8% 11%

0% 20% 40% 60% 80% 100%

PERRY STREET PREPARATORY PCS Expenditures as % of Revenues (FY2013)

Personnel costs

Occupancy expenses

Direct student costs

General and administrative expenses

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Liquidity Two indicators of a school’s short-term economic viability are its current ratio57 and its days of cash on hand.58 A current ratio greater than one indicates a school’s ability to satisfy its immediate financial obligations. Since FY2009, Perry Street Preparatory PCS’s current ratio has been at least one (except for FY 2011), indicating that the school can meet its short-term financial obligations with current assets.

Typically, 90 days or more of cash on hand indicates a school can satisfy immediate obligations with cash. Less than 30 days of cash on hand is a liquidity concern. Perry Street Prep PCS’ days of cash on hand have fluctuated over the last four years, with the school’s days of cash on hand decreasing from 38 days in 2009 to zero days in FY2011 and increasing to 46 days in FY2012. At the end of FY2013, the school’s days of cash on hand stood at 75 days. The school’s current ratio and days of cash on hand trends are detailed in the table below.

Fiscal Period 2009 2010 2011 2012 2013 Current Ratio 1.8 12.4 0.9 2.1 1.9 Days of Cash

on Hand59 32 18 0 46 75

Cash flow from operations indicates whether a school produces adequate cash flow to meet its operating needs. Since FY2010, Perry Street Prep PCS has maintained positive cash flow from operations with about $4.0 million in FY2013, as detailed in the below table.

Fiscal Period 2009 2010 2011 2012 2013 Cash Flow from

Operations $(874,143) $1,250,710 $687,939 $3,775,722 $3,975,811

Debt Burden A school’s debt ratio60 indicates the extent to which a school relies on borrowed funds to finance its operations. A debt burden ratio in excess of 0.92 is a source of concern to PCSB. Perry Street Prep PCS’ debt ratio climbed to 0.75 in FY2010, but remained relatively stable over the last three fiscal years.

Fiscal Period 2009 2010 2011 2012 2013 Debt Ratio 0.16 0.75 0.81 0.74 0.69

57 Current assets divided by current liabilities. Current refers to the 12 months or normal operating cycles that a school can convert certain assets into cash or use up or settle certain obligations. 58 “Cash on hand” equals unrestricted cash and cash equivalents divided by total expenditures divided by 360 days. 59 Because there was no breakdown for unrestricted and restricted cash in FY2009, total cash was used. 60 Debt ratio equals total liabilities divided by total assets.

Perry Street Prep PCS Renewal Report 2.19.14

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