Report: Brooks school lost $1.1 million last fiscal year
Derrick Brooks created Brooks DeBartolo Collegiate High with the family of developer Eddie DeBartolo.
BY JAMES L. ROSICA Tribune staff
Published: August 17, 2013
Updated: August 18, 2013 at 08:29 AM
TALLAHASSEE — Former Buccaneers linebacker Derrick Brooks took many hits on the playing field, but the latest blow came from an unexpected source: The state's financial watchdog.
A new report from the Florida Auditor General's office says that the Tampa charter school bearing Brooks' name was more than $1.1 million in the red last fiscal year, despite its A grade from the Department of Education.
It also showed “material weaknesses” in its internal financial controls. The term is used when an auditor believes an organization could make significant financial reporting errors that it wouldn't catch.
Brooks DeBartolo Collegiate High School, which opened in 2007 and emphasizes college prep, was among the nearly 12 percent of Florida charter schools running deficits in the 2011-12 fiscal year, the report said.
But Brooks DeBartolo's 2011-12 shortfall was the largest of the 58 schools running deficits that were listed in the report. It was also among 25 schools showing material weaknesses.
“We are following up with them on the financials,” said Hillsborough Schools Superintendent MaryEllen Elia. “We want to find out exactly what the situation is.”
In fact, a summary released Friday afternoon by the school district shows that school officials sent a certified letter to Brooks DeBartolo's board on Feb. 8, “requesting a long term financial plan that would determine the school's ability to sustain operations and meet future obligations.”
Three months later, the district got a response from David Mallitz, treasurer of Brooks DeBartolo Charities, the organization that runs the school.
He said “the school refinanced with Wells Fargo, which resulted in strengthening (its) long term viability,” according to the summary.
“Additionally, he stated that the founders (including Brooks) guarantee the debt of the school and that the refinancing resulted in a cash balance in excess of $825,000 for future funding needs,” it said.
The school's financial disclosure to the federal government shows the school ended the 2010-11 fiscal year with a $181,000 operating deficit, though it did have a $14,000 surplus the year before that.
The school is nonprofit, but nonprofit groups still have to file disclosures with the Internal Revenue Service.
Brooks, a 14-season veteran who played his entire professional career with the Bucs, created the school with the family of developer Eddie DeBartolo to reach at-risk students.
An interview request emailed to Brooks resulted in a response from Ben Shotten, media relations coordinator for the Tampa Bay Storm, the Arena Football League team. Brooks is its president.
The request was renewed through Shotten, who said Brooks was busy interviewing candidates for team coach and referred questions to the school.
A call to Brooks DeBartolo principal Kristine Bennett was then referred to Mallitz.
In a written statement to the Tribune, he called the deficit cited in the audit “misleading” because it includes write-offs from improvements the school made at its previous location.
A write-off can occur when an organization invests in something but can't recoup its costs and thus claims a loss.
“Our operating deficit was $552,000, which includes (the) $181,000 carried over from 2010-11, resulting in a 2011-12 operating deficit of $371,000 on a school enrollment of 250 students,” Mallitz said. “We have since ... increased our enrollment by 58 percent.
“We will begin the 2013-14 academic year next week with 430-plus students and have a waiting list for both 9th and 10th grades,” he added. “Our increase in enrollment alone will erase the school's operating deficit moving forward.”
The auditor general's report did not cover fiscal year 2012-13, which ended recently. Mallitz did not address the school's 2012-13 finances in his statement.
Fiscal years generally run July 1-June 30, and it can take several months for accountants to reconcile the books for the preceding year.
Since the school's opening in 2007, Mallitz said, Brooks, the DeBartolo family and their associated foundations “have supported the school both financially through contributions and by assisting with the establishment of a permanent home, which is owned by the school.
“This support will continue currently and into the future,” he said.
Charter schools are public schools that are operated privately. They do not charge tuition because, like traditional public schools, they receive taxpayer dollars from the state.
Each charter school operates under a contract with the local school board, which can revoke a charter. According to Mallitz, Brooks DeBartolo recently received a 15-year charter extension.
Last year, Brooks DeBartolo moved into an 11-acre campus, renovated for $15 million, on North Central Avenue. Close to 300 students are enrolled, according to its website.
The school previously had been leasing space that once housed a Circuit City. The landlord there sued the school for falling nearly three years behind on rent. Brooks DeBartolo countered that there had been a rent-reduction agreement because of improvements it made to the property.
Now, the new main building includes 20 classrooms of 900 square feet each, a gymnasium, a media center, two science laboratories, a cafeteria, offices and other facilities.
The state Department of Education gave the school an “A” grade for 2010 and 2011, a major improvement over its earlier “D” grade.
The proportion of minority students is 78 percent, and its at-risk population has a graduation rate of 84 percent, according to the department.
Thirty-six charter schools were operating in Hillsborough County in 2011-12, the report said — the third highest number behind the two most populous counties, Miami-Dade and Broward counties, but ahead of the third most populous, Palm Beach County.
State law requires the auditor general to annually review the submitted audits of charter schools and report findings to the Department of Education and the Legislature.