Instead, the board voted unanimously to enter into consent agreements designed to bring the two Phoenix charter schools —NFL YET College Prep Academy and Reyes Maria Ruiz Leadership Academy — back into compliance.
Board staff told members the problems appeared in annual audits for five consecutive years, progressing from a minimal-impact finding in fiscal year 2021 to a serious-impact finding in fiscal year 2025.
The two contracts operate schools serving grades K-6 and 7-12 in Phoenix. Both were placed before the board because the repeated financial reporting problems reached the serious impact level under the board's audit and compliance policies.
Espiritu CEO Armando Ruiz acknowledged the problems rather than disputing the findings.
“If you break it, you own it. We broke it. And so, I’m not here to offer any excuses," Ruiz told the board.
Ruiz said the problems began during the COVID-19 pandemic as Espiritu responded to increased needs among families while also dealing with an influx of federal relief money and changes in its accounting support.
He said Espiritu served roughly 2 million meals during a three-year period and used federal relief funding and reserves to address learning loss and social-emotional needs in its community.
Ruiz described the period as a "tsunami of financial activity" for an organization that had not staffed its finance operation for that level of spending.
He said Espiritu's longtime accountant also retired during the pandemic, leading the organization through several accounting teams before finding its current outside accountant.
Ruiz told the board Espiritu eventually made a deliberate decision to spend additional federal Elementary and Secondary School Emergency Relief funds, known as ESSER, and draw down reserves rather than preserve the money while students and families were still struggling with the effects of the pandemic.
He said the investment contributed to improved academic performance and an 18% increase in enrollment.
Espiritu has since added several layers of financial review, Ruiz said, including staff reviews every two weeks, a financial subcommittee, an external accountant and governing board oversight.
Board members responded favorably to the organization's willingness to acknowledge problems and outline corrective steps.
When board member James Swanson asked staff whether there was a strong level of confidence that Espiritu could correct the problems, a board staff member responded, "I do."
The board ultimately found both Espiritu entities failed to establish and maintain effective internal controls over financial reporting, properly record and reconcile transactions and prepare financial statements in accordance with generally accepted accounting principles.
The motion stated those failures violated the charter contracts and state law and provided sufficient grounds for notices of intent to revoke the charters.
However, the board exercised its discretion to instead offer consent agreements aimed at bringing the schools into compliance.
If Espiritu does not accept the agreements or fails to provide the required governing board approval by the deadline established by staff, the charter contracts could return to the state board for consideration of notices of intent to revoke.
The motion passed unanimously.
"We'll make you proud," Ruiz told the board after the vote.
Editor’s note: A grant from the Arizona Local News Foundation made this story possible. The foundation awarded 15 newsrooms to pay for solutions-focused education reporters for two years. Please submit comments at yourvalley.net/letters or email them to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.
Meet Stacy Stacy Mantle is joining the team at Independent Newsmedia, Inc. as an Education Solutions journalist, thanks to a grant from the Arizona Community Collaborative. She has a long history in education that ranges from teaching junior high and middle school to developing curriculum and standards-based assessments.
Community: A longtime advocate for animal welfare, Stacy is deeply involved in rescue efforts and volunteers with several nonprofit organizations.
Random Fact: Once upon a time, she shared her home with a pet coyote and two wolf hybrids. The experiences were wild enough to become the subject of her first book!
Education: She holds a BA in English with a minor in Political Science, a Post-baccalaureate in Secondary Education, and an MBA with a emphasis on Marketing.
Hobbies: In her spare time, Stacy writes fast-paced urban fantasy novels, crafts small-batch artisan soap, and is always up for hiking or off-roading through the Arizona wilderness with her husband of 23 years.
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