The Academy for Classical Education has consistently stellar academics, but fluctuations to the school’s financial health in its nine years of operation have largely gone under the radar.

ACE was issued a $34.9 million tax-exempt municipal bond by the Macon-Bibb County Urban Development Authority in 2017 to buy its 40-acre campus, which underwent millions in construction work to transform into a functional school. The campus was once a financial institution where credit cards were produced.

The school defaulted on its current bond covenant three times, according to the Electronic Municipal Market Access database. The school did not respond to a question about how it will afford to pay increasing principal and interest payments over the next three decades.

ACE is expected to pay back $72.6 million in debt service payments to bondholders by 2052. The debt schedule indicates annual payments by ACE, which are currently about  half a million, are set to rise to $2.4 million beginning in 2028, according to the school’s 2022 independent financial audit. The payments increase each period thereafter.

Public charter schools are funded based on the number of students enrolled. ACE’s enrollment was 1,790 in March, according to state data.

ACE received $26 million in taxpayer dollars for fiscal year 2023, including $14 million from the State Charter Schools Commission to cover operating costs, employee salaries and bond payments, according to state allotment sheets.

Also in fiscal year 2023, the school bought more property beside its campus, established its own state-certified three-person campus police department and built a press box for its new softball and baseball fields.

ACE Governing Board Chairperson Witt Gaither, who works as a wealth advisor, said in 2022 that the school had plans to expand its campus and possibly seek another bond from the Urban Development Authority. However, Gaither said more recently those plans have been put on hold as costs have become prohibitive.

“I am certain we will revisit expansion and replication from time to time, but it is not on our near-term radar,” Gaither said in an email. “The cost of money has grown substantially since we first began discussions.”

While increased student enrollment would mean more money for the school, ACE would have to find a way to pay for additional construction to increase its capacity.

The school’s governing board is ultimately responsible for the financial solvency of ACE, but an independent audit prompted by the first default event indicates board members could do a better job with financial oversight.

The audit report noted that the board was “made aware of the fact that the school would not meet its bond covenants, but did not take any concrete actions to fix the issue and work to meet the requirements immediately. Instead, additional spending has been considered,” such as a plan to spend $70,000 on a concession stand for its baseball team.

The auditor also noted board members were not being provided with detailed financial reports such as balance sheets, budgets or profits and losses, only a “three month cash-on-hand projection from the school’s CFO.”

The State Charter School Commission has previously docked points from ACE’s annual performance review because of its debt to income ratio.

Other items the auditor noted include excess spending for supplies and some expenses that exceeded board-approved amounts. For example, the board was told it would take $75,000 to repair a sinkhole on campus, but the cost increased to $125,000 and, “nowhere in the public meeting minutes does this increase of $50,000 get explained, discussed, or approved,” according to the auditor’s report.

If not for an influx of millions in federal money related to the pandemic, the school’s financial position might not be as stable. ACE received a paycheck protection payment of $1.3 million in 2020 that was forgiven in 2021. The school also received nearly $2 million in American Rescue Plan and CARES Act money.

The governing board has not discussed succession or how it might transition to new leadership after Perkins retires. Fuller noted in his 2019 audit that Perkins said she had “a few good years in her with regards to running the school.”

Gaither, who has been on the board since its inception in 2014, introduced an amendment to the governing board’s bylaws in 2021 that allows him to remain on the board for a third consecutive four-year term set to expire in 2026. The board approved the extended term limit in a 6-0 vote.

To contact Civic Journalism Fellow Laura Corley, call 478-301-5777 or email [email protected].

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