Phoenix charter school to close due to 'egregious financial mismanagement'

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The Arizona State Board for Charter Schools voted Tuesday to begin revoking the charter of StarShine Academy, the second time this year the board has voted to close a charter school for financial malpractice. (Source: 3TV/CBS 5) The Arizona State Board for Charter Schools voted Tuesday to begin revoking the charter of StarShine Academy, the second time this year the board has voted to close a charter school for financial malpractice. (Source: 3TV/CBS 5)
StarShine Academy, a K-12 school near McDowell Road and 35th Street, will close after this school year, according to a board spokesman. (Source: 3TV/CBS 5) StarShine Academy, a K-12 school near McDowell Road and 35th Street, will close after this school year, according to a board spokesman. (Source: 3TV/CBS 5)
PHOENIX (3TV/CBS 5) -

State regulators plan to shut down a Phoenix charter school for “egregious financial mismanagement” after investigators determined the school’s president spent thousands of dollars of school funds on personal trips and her own bills, among other violations.

The Arizona State Board for Charter Schools voted Tuesday to begin revoking the charter of StarShine Academy, the second time this year the board has voted to close a charter school for financial malpractice.

[RELATED: Sudden closure of charter school renews calls for stricter oversight]

StarShine Academy, a K-12 school near McDowell Road and 35th Street, will close after this school year, according to a board spokesman.

About 90 students currently attend the school, which is run by Patricia McCarty. McCarty did not return a call seeking comment Wednesday.

StarShine filed for bankruptcy protection in February 2016. However, the school has fallen behind on debt payments and the court contacted the State Board last month to recommend that StarShine be closed “in order to stem the tide of state assets being squandered for Ms. McCarty’s personal use.”

[RAW VIDEO: Teachers, staff hold press conference after Goodyear charter school closes]

Investigators with the Charter Board examined 102 of the school’s expenses from 2017 and 2018 and found that McCarty spent nearly $15,000 on personal expenses including a trip to New Mexico; her home APS bill; cash withdrawals; and items at Walmart like panties, sleepwear and mouthwash.

McCarty didn’t have proper documentation for a number of expenses. She told investigators some of her receipts, which she kept in plastic baggies, were accidentally discarded.

“It's kind of shocking to hear that,” said Christopher Hills, a parent of a 7th grader at the school. Hills said he was not aware the school was in bankruptcy, nor that its charter was being revoked.

The trouble at StarShine is emerging two months after a charter in Goodyear called Discovery Creemos suddenly closed its doors, leaving parents scrambling.

[RELATED: Charter school transferred nearly $1 million to CEO in years prior to closing]

“We think Discovery Creemos was one of the worst ones, as was Starshine, but they're not alone,” said Dave Wells of the Grand Canyon Institute.

GCI released a report Wednesday identifying red flags in other charter schools and calling for stricter oversight by the state. According to GCI’s analysis, one-third of charter schools do not meet the Charter Board’s financial performance expectations.

Meghan Gilbertson of the Arizona Charter Schools Association contested GCI’s findings, saying they painted an unnecessarily bleak picture of a stable industry. She said charter schools would not be able to secure bond funding, for example, if the lending market didn’t think charter schools were in healthy financial shape.

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Derek StaahlDerek Staahl is an Emmy Award-winning reporter and fill-in anchor who loves covering stories that matter most to Arizona families.

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Derek Staahl

This once-uncompromising "California guy" got his first taste of Arizona in 2015 while covering spring training baseball for his former station. The trip spanned just three days, but Derek quickly decided Phoenix should be his next address. He joined CBS 5 and 3TV four months later, in August 2015. Before packing his bags for the Valley of the Sun, Derek spent nearly four years at XETV in San Diego, where he was promoted to Weekend Anchor and Investigative Reporter. Derek chaired the Saturday and Sunday 10 p.m. newscasts, which regularly earned the station's highest ratings for a news program each week. Derek’s investigative reporting efforts into the Mayor Bob Filner scandal in 2013 sparked a "governance crisis" for the city of San Diego and was profiled by the region’s top newspaper. Derek broke into the news business at WKOW-TV in Madison, WI. He wrote, shot, edited, and presented stories during the week, and produced newscasts on the weekends. By the end of his stint, he was promoted to part-time anchor on WKOW’s sister station, WMSN. Derek was born in Los Angeles and was named the “Undergraduate Broadcast Journalism Student of the Year” in his graduating class at USC. He also played quads in the school’s famous drumline. When not reporting the news, Derek enjoys playing drumset, sand volleyball, and baseball.

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