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Perpich Center facing major problems, legislative auditor says

Cecile Ferkul, deputy legislative auditor for the Office of the Legislative Auditor’s Financial Audit Division, outlines findings from the audit on the Perpich Center for Arts Education to the House Education Innovation Policy Committee Jan. 19. Photo by Paul Battaglia
Cecile Ferkul, deputy legislative auditor for the Office of the Legislative Auditor’s Financial Audit Division, outlines findings from the audit on the Perpich Center for Arts Education to the House Education Innovation Policy Committee Jan. 19. Photo by Paul Battaglia

The Perpich Center for Arts Education and accompanying Crosswinds Arts and Science School face their fair share of problems.

The House Education Innovation Policy Committee reviewed a scathing program evaluation and financial audit by the Office of the Legislative Auditor regarding the challenges facing the schools. No action was taken at Thursday’s meeting.

For all the opportunity that the center has created, the report found its leaders have been ineffective, unorganized and uncommunicative in many areas.

“We found significant problems with board oversight, agency leadership and management,” Deputy Legislative Auditor Judy Randall said. “We found a lot to be concerned about.”

“The ultimate goal is that the students’ needs come first, and adults have made a pretty good mess of meeting those needs,” said Julie Workman, a member of the Perpich board of directors. “I believe it can be corrected.”

 

Arts education for all

To understand its problems, you first have to understand what it is.

“Not every school around the state can offer classes in dance, media arts and theater,” Joel Alter explained. He managed the evaluation for the legislative auditor’s office.

The Perpich Center for Arts Education is a state agency with a mission of promoting the talent and creativity of K-12 students through arts education. Created by the Legislature in 1985, it operates a high school in Golden Valley and Crosswinds Arts and Science School in Woodbury. The center also has statewide outreach responsibilities and is governed by the board of directors.

The majority of its funding comes from the General Fund — nearly $14 million of its $21.9 million spent in Fiscal Years 2014 and 2015. Together the schools employ 113 full- and part-time staff.

“[Perpich] has nurtured the talent and creativity of many high school students,” Alter said. “Many students pursue college after [graduating], and some have received very good scholarships. There’s a lot of talent at the high school.”

 

Perpich’s problems

To start, the 2014 acquisition of the Crosswinds Arts and Science School has, in short, been chaotic.

The transition of ownership and operation has proven challenging, resulting in significant staff turnover and declining standardized test scores. Meanwhile, improvement efforts remain unclear.

“It’s very disappointing that Perpich took on an obligation that was certainly more complex than they were used to,” said Rep. Sondra Erickson (R-Princeton), who chairs the committee. “It’s concerning that we may see the demise of Crosswinds.”

WATCH The House Education Innovation Policy Committee recieves the Office of the Legislative Auditor's report

Enrollment decline at both schools is also a concern. At its Golden Valley location, the Perpich center is statutorily limited to 310 students. After peaking at 306 students in 2011, enrollment is 187 this year. At Crosswinds school, attendance has dropped from 349 students in 2012 to 129 this year.

“We didn’t find that the board had been discussing these declines very seriously,” Alter said.

It’s also pricey to teach the enrolled students, costing $20,000 per student (more than $21,000 with food and dorm expenditures) per year compared to $11,000 per public school students.

The Perpich center has had five executive directors since inception, four principals in the past four years and does not have a music specialist on staff, even though music is a primary focus.

The turnover has created something of a revolving door of educators.

Members and staff of the House Education Innovation Policy Committee listen to staff from the Office of the Legislative Auditor present an audit on the Perpich Center for Arts Education at a Jan. 19 hearing. Photo by Paul Battaglia

“We received overwhelmingly negative comments about [Perpich’s] management,” Alter said. “It’s a challenge for a board to move forward when there is turnover.”

And if one wanted to add insult to injury, there’s also the question as to whether either school is even needed.

The state already promotes arts education outreach through programs such as Turnaround Arts (focusing on low-income school opportunities), Arts Integration (developing lessons to combine arts in other subjects), regional centers (hosting school districts that coordinate regional programs) and the promotion of educational specialists (who provide assistance in arts instruction for schools and teachers). 

 

Financial fluidity

The financial audit wasn’t any friendlier. It found the center lacks internal control and support, sometimes resulting in compliance issues with the Department of Education. School officials risked losing nearly $500,000 in special education funding from the state due to missing a submission deadline last year.

“After it missed the initial deadline, the [department] had to follow up twice because it had not received adequate responses,” Deputy Legislative Auditor Cecile Ferkul said.

Further, the audit found that school leaders did not adequately review and document payroll and human resource transactions; did not have adequate internal controls over capital asset inventory and purchases; and did not appropriately use some of its Arts and Cultural Heritage Fund appropriations.

“Just about every area we looked at, we found a variety of errors and non-compliances; some of these issues are repeated findings from previous reports, too,” said Ferkul.

 

Not-so-simple solution

The report offered several recommendations, including having the center’s board of directors provide meaningful and transparent oversight of the agency while also adopting strategic goals, annually assessing the executive director, approving school policies and inviting greater public input. Annually, the board should review and evaluate trends in its schools’ enrollment and standardized test scores.

Additionally, the Legislature is recommended to consider changes to the board’s role, size and composition; amend state statute to include minimum requirements for school administrators; and specify outreach requirements.

Rep. Randy Jessup comments during a Jan. 19 presentation to the House Education Innovation Policy Committee from Office of the Legislative Auditor staff about an audit of the Perpich Center for Arts Education. Photo by Paul Battaglia

Alter cautioned against thinking changes will be immediate or all-inclusive.

“There’s going to be hard work to deal with some of these issues. … But we do think it’s a good time to start thinking about what would be best and how to provide solutions.”

The committee chair is optimistic a plan can be mapped.

“We have had these underlining concerns, and now we have gotten to the meat of these problems,” Erickson said. “We are going to make some changes to ensure students who seek to attend these schools are going to get that opportunity, and get the best support.”

However, other committee members cautioned that the future may not be as bright.

“We have waning enrollment, declining academic performance, poor board oversight, weak administrative leadership, substantial financial issues, minimal public visibility and excess cost for students. If Perpich were a business that would be many red flags to close,” said Rep. Randy Jessup (R-Shoreview).

“From a business perspective, perhaps the appropriate next step is to gracefully wind down these two schools and allow students to pursue other options. Sometimes businesses just die. Maybe it’s time.” 


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