Ohio Supreme Court to decide whether charter school head liable for treasurer’s action

The CEO of a now-closed community school awaits the Ohio Supreme Court’s decision as to whether he can be held liable for funds the fiscal officer was convicted of stealing.

Robert Burns was the director of New City Community School from 2009, until the school closed in 2010.

The fiscal officer during Burns’ tenure was Carl Shye, Jr., who was not directly reporting to Burns, rather to the school’s board.

Community schools (also known as charter schools) get public funding from the state, but have their own boards that are independent of public districts.

In 2012, as a result of a six-year FBI investigation, Shye was convicted of stealing nearly half a million dollars from multiple charter schools in Ohio, resulting in a two-year prison sentence and restitution.

New City Community School was one of the schools which lost money from Shye. An audit conducted by the state auditor’s office found New City was on the hook for $51,670 in “questionable expenditures.”

It wasn’t until 2018 that the Ohio Attorney General’s Office turned their attention to Burns and other school officials, saying in a complaint that they were liable for the more than $50,000 identified in the audit.

Burns told the court he shouldn’t be held responsible for the money since he didn’t receive the funds or control over the money, unlike fiscal officer Shye. A trial court said the state could continue with the case against Burns, but a Second District Court of Appeals decision reversed that decision.

The Ohio Supreme Court heard arguments from Burns’ attorneys and the Attorney General, mainly whether or not the director of the school had any control over the money, therefore could have stopped the money from leaving through illegal means.

“If he knows, like any CEO, that the best laid plans of mice and men or of CEOs and treasurers might go awry, let’s set up controls about that,” said Stephen Carney, representing the Ohio Attorney General’s Office. “Because the alternative is, instead of putting the liability on (Burns), is to leave the public holding the bag.”

Shye was considered an independent contractor, but as attorneys for Burns and the Ohio Attorney General said, Burns “clicked” off on Ohio Department of Education grant funding along with Shye in a two-authorization system through the state.

“To me, that sounds like he was integral to securing those funds and directing where they got deposited, because that’s what Ohio required,” said Chief Justice Maureen O’Connor.

But Janet K. Cooper, attorney representing Burns, said while he may have signed off on money for the school, his job duties did not include overall supervision of fiscal business.

“He wasn’t responsible for misspending those funds, nor did he have any control over them being misspent,” Cooper told the court justices. “He approved the lawful expenditure of public funds, but he did not then carry those orders out because he had no authority to do that.”

Justice Patrick DeWine questioned the ability for an administrator to be held responsible for misspent funds merely because they have authorization to ask for money. He used the example of a state university where many administrators can fill out forms requesting grants and aid.

“I would be hard-pressed to think that we were going to hold some innocent bureaucrat liable just because someone else stole money through no fault of their own,” DeWine said.

A decision on the case could take several months as the Ohio Supreme Court reviews the court documents and arguments.