CPS cites Urban Prep, celebrated all-boys Chicago charter school, for ‘dismal’ financial management

The privately operated, publicly funded school has used cash advances and “predatory loans” for funding, city school officials say. Urban Prep leaders say its financial issues are resolved.

SHARE CPS cites Urban Prep, celebrated all-boys Chicago charter school, for ‘dismal’ financial management
Urban Prep Academies graduating seniors gathered May 19 at Daley Plaza for a college signing-day ceremony. The school is known for getting 100% of its graduates admitted to college but has faced financial struggles.

Urban Prep Academies graduating seniors gathered May 19 at Daley Plaza for a college signing-day ceremony. The school is known for getting 100% of its graduates admitted to college but has faced financial struggles.

Pat Nabong / Sun-Times

For years, the Urban Prep Charter Academies charter school network in Chicago has gotten national attention for getting 100% of its Black male graduates admitted to college. People magazine once named its founder “hero of the year.”

But Urban Prep has been mired in such deep financial trouble that Chicago Public Schools officials say they have “grave concerns” about its sustainability.

Urban Prep, which once was looking into expanding across the country, has struggled to meet its payroll, operating on credit cards, “predatory loans” and cash advances from the Chicago school system, according to a CPS memo obtained by WBEZ.

At the same time, students who legally are mandated to receive special education services have suffered. CPS officials said they have no evidence that those required services were provided at least for months at a time, possibly for years, according to the memo.

Urban Prep is the subject of an investigation by CPS’ inspector general’s office, which is looking into how its financial problems, which date to 2015, started and why they persisted.

Urban Prep was part of another investigation that looked into charter schools receiving federal Paycheck Protection Program funding. Urban Prep got a $3.1 million loan, meant to help organizations avoid layoffs during the coronavirus pandemic, according to the memo. CPS officials said Urban Prep overstated the number of staff members on its payroll in applying for the PPP loan.

Tim King, Urban Prep’s leader, didn’t respond to an interview request.

Other Urban Prep officials defended the open-enrollment charter school, which has three campuses — in Englewood, Bronzeville and downtown — and about 500 mostly low-income young men.

They said the CPS memo, written in January, details problems that are years old and that Urban Prep’s finances are now in order.

The Urban Prep officials said factors outside their control drained their budget but that they were unwilling to scale back on the education they say their students deserve.

Harold Stuckey, 18 (left), who is going on to the University of Illinois Springfield, and Tyler McKenzie, 18, who’s headed to the University of Illinois at Urbana-Champaign, at Urban Prep Academies’ College Signing Day May 19 at Daley Plaza.

Harold Stuckey, 18 (left), who is going on to the University of Illinois Springfield, and Tyler McKenzie, 18, who’s headed to the University of Illinois at Urbana-Champaign, at Urban Prep Academies’ College Signing Day May 19 at Daley Plaza.

Pat Nabong / Sun-Times

A turning point came when CPS — through which such privately operated, publicly funded charter schools in Chicago get most of their funding — cut budgets starting in 2015.

“We were committed to making sure that our students and staff did not feel the budget cuts,” said Troy Boyd, Urban Prep’s chief operating officer. “We didn’t cut programs. We didn’t cut services. We gave salary increases to our staff because we felt like they deserved it. But, as you can imagine, there was a hole, and it didn’t go away. It got deeper and deeper.”

Also, its staff unionized in 2015, which Boyd said meant Urban Prep had to “expend a tremendous amount of resources on lawyers.”

Urban Prep officials said that, from the beginning, as the only charter school in Chicago run entirely by Black men, they have faced discrimination working with CPS and in trying to tap the same resources as other charter schools.

According to charter school advocates, public school districts historically haven’t funded charter schools on a par with traditional schools, and that it’s especially difficult to work with hard-to-serve students, as Urban Prep does, without adequate funding.

“When you’re piling everything else up on top of that and trying to pay it all out of your general budget, you get behind very quickly, and you’re treading water and starting to slip beneath the waves very easily,” said Michael Musante, senior vice president of the Center for Education Reform, an advocacy group that promotes school choice.

Boyd and Dennis Lacewell, Urban Prep’s chief academic officer, said they will keep fighting to keep Urban Prep open. Lacewell said Black male students do better at Urban Prep than at other schools.

“Young Black men [are] at the bottom of the positive statistics and at the top of the negative,” he said. “So it is essential that Urban Prep exists for our community.”

Urban Prep isn’t just struggling financially. It also isn’t attracting students. At its peak after opening in 2006, it had 1,500 students — three times the number it now has.

Lacewell and Boyd said the network is losing enrollment because some Black families have fled the city to escape the same problems Urban Prep is attempting to help solve, foremost among them the lack of opportunities for boys and teenagers who are Black.

Tim King, founder and CEO of Urban Prep Academies, speaking May 19 during Urban Prep Academies’ College Signing Day at Daley Plaza.

Tim King, founder and CEO of Urban Prep Academies, speaking May 19 during Urban Prep Academies’ College Signing Day at Daley Plaza.

Pat Nabong/Sun-Times file photo

CPS’ issues with Urban Prep

Tim King not only graced the cover of People as its “Hero of the Year” but also was named “Chicagoan of the Year” in 2010.

But CPS officials question King’s influence over the charter school and how accountable he is. The CPS memo says it’s problematic that King serves both as the executive director and chairman of the board for Urban Prep.

“It fosters conflicts of interest and is an inappropriate model for an organization that receives public funding,” the memo says.

Urban Prep officials said the dual roles are allowed under Illinois law.

This arrangement was especially concerning to CPS given the organization’s “dismal” financial management, according to the memo, which says the charter network requested advance payments from CPS in five of eight quarters between September 2017 and March 2020 “to remain solvent.” A final request at the start of the 2021 fiscal year was denied.

“The district is unsure why Urban Prep is unable to utilize its funds efficiently enough to ensure that its staff is paid — no other operator has issues in doing so,” the memo says.

The memo also cites $900,000 in loans that Urban Prep took out in 2019 by selling a portion of its future revenue streams, agreeing to pay back $1.3 million — a 45% markup.

And, in 2020, a collection agency contacted CPS because Urban Prep owed nearly $200,000, which CPS paid, then withholding a future payment.

The memo says taxpayer money meant for educating children was used to cover the high interest rates.

But Urban Prep said it raised $1.5 million from private sources during this time and that taxpayer money wasn’t “wasted.”

Still, students were affected by the charter school network’s financial issues. In February 2020, Urban Prep didn’t pay two vendors. As a result, a vendor stopped providing special education services, according to the memo. After two months, CPS stepped in and paid the bill.

That wasn’t the only time the charter school has had problems providing legally required special education services, according to CPS, which said in a report that it received no documentation that any Urban Prep student saw a social worker or a psychologist during the 2020 or 2021 school years.

Also, during many months, nursing and speech language pathology services were greatly limited, according to CPS. Asked for details, CPS officials said they had “no evidence” that services were provided.

That’s unacceptable, said Chris Yun of Access Living, a disability rights group.

“The lack of the service delivery records most likely means no service was even given to students even though their [Individualized Education Program] requires such supporting services,” she said. “If that’s the case, these are massive violations.”

Under the law, students and their families must be notified if a required service is not provided and told they are entitled to makeup services.

Yun said it’s ultimately CPS’ responsibility to ensure that the services are provided and that it isn’t enough to say they don’t have documentation.

“They have to ask what is going on here,” she said.

Urban Prep officials did not respond to questions about the lack of documentation.

But they said CPS has never provided sufficient funding for special education and indicated that providing these services is a huge financial weight on them. More than a quarter of the students at the Englewood campus require special services. The citywide high school average is 15%.

Parents spoke up for Urban Prep

Urban Prep’s financial difficulties came up at a Chicago Board of Education meeting this past winter when the board was considering renewing the contract that allows the school to run its Englewood campus.

It wasn’t the first time the Board of Ed took issue with Urban Prep. In 2018, it revoked the charter of Urban Prep’s West Side campus in Garfield Park, saying it was failing students academically.

Urban Prep officials appealed to the state, arguing that, although they don’t outperform CPS students in general, they outperform other schools with Black male students. The state took over the campus, allowing it to stay open and funding it.

This past February, the Board of Ed was approaching the renewal of the flagship Englewood campus. For months, parents and students had testified on Urban Prep’s behalf at board meetings.

“I feel like they care about my son and not just his academics but his social and emotional well-being,” one mother told the Board of Ed, saying her son hadn’t been noticed or nurtured at his previous school.

Urban Prep officials reminded the board that, compared to CPS’ own record with Black male students, its charter campuses did far better on many measures. When they founded the school in 2006, only 2.5% of Black male high school freshmen had a college degree a decade later.

They said the school’s emphasis on building confident, college-bound young men was of utmost importance.

Graduating senior Terrell Morrison, who is going to Southern University and A&M College, adjusts his cap May 19 during Urban Prep Academies’ College Signing Day at Daley Plaza.

Graduating senior Terrell Morrison, who is going to Southern University and A&M College, adjusts his cap May 19 during Urban Prep Academies’ College Signing Day at Daley Plaza.

Pat Nabong / Sun-Times

Before voting on Urban Prep’s future in February, Board of Ed member Elizabeth Todd-Breland said the experiences of families couldn’t be ignored but neither could the need to hold the charter school accountable.

“What we are hearing is a deep value for the school community, but we still have responsibility here,” Todd-Breland said.

Board members had the memo and report detailing Urban Prep’s difficulties at that meeting but did not talk about it publicly.

Other board members pointed out that CPS officials visited Urban Prep and found some “structural improvements to its academic program.”

Ultimately, for a second straight year, the board gave Englewood campus a one-year renewal, rebuking pleas by Urban Prep officials to do that for a longer period to give freshmen confidence that they would be able to graduate from the school. Charters usually get three- to seven-year renewals.

“We believe the Urban Prep one-year renewal allows the district to continue to monitor the progress made in academics and operations while also setting a clear expectation for the school to improve its financial operations,” CPS officials said.

The board placed a long list of conditions on the renewal, among them that, if there were any findings of wrongdoing against the school by an investigative body, Urban Prep would have to implement recommendations by that body.

The memo obtained by WBEZ doesn’t accuse anyone at Urban Prep of malfeasance or of personally profiting.

Survival mode

Urban Prep’s leaders said they did what was necessary to survive even as they faced increasing challenges.

They said their finances started to deteriorate in 2015, during the budget stalemate in Springfield when Gov. Bruce Rauner held office. Without state money coming in, CPS twice cut budgets for all schools midway through school years.

Lacewell said Urban Prep officials at first maintained programs, expecting a quick resolution. But that didn’t happen.

At the same time, other forces were shrinking their bank account. Their plummeting student enrollment hurt because CPS funds schools on a per-pupil basis.

Also, Urban Prep had once brought in more than $100,000 a year in student fees. Fewer students meant less money in fees.

And pprivate fundraising the school had been counting on didn’t materialize as Urban Prep and, more generally, charter schools lost some of their earlier luster.

In 2019, Urban Prep’s revenue from CPS funding, private fundraising and student fees was $5 million less than it was five years earlier, according to tax documents.

“We are not blind to the fact that we are the only charter school that is operated and managed entirely by African American men in the city or the state,” Lacewell said. “There are no endowments or rich benefactors who can come in.”

According to Andrew Broy, president of the Illinois Network of Charter Schools, the Board of Education treats charter schools differently than traditional schools.

“Whenever the board seems to talk about underperforming district schools, the framing of the discussion is about how they can push in more support, provide more resources and make sure those schools have what they need,” Broy said. “When they bring up an underperforming charter public school, their discussions are more about, ‘How do we hold those schools accountable?’ There’s no commensurate support, no idea of providing more support and service to help those schools get better.”

Broy said he doesn’t think the current board recognizes that charter schools have helped drive the overall improvement of Chicago students. During Mayor Lori Lightfoot’s tenure, no new charter schools have opened in Chicago.

Deontae Moore (center) was in the first class to graduate from Urban Prep.

Deontae Moore (center) was in the first class to graduate from Urban Prep.

Provided

Praise from a former student

Deontae Moore enrolled at Urban Prep looking for a good high school that would set him up for a successful future. He had been rejected by his first choice, a selective-enrollment school, and his mother didn’t want him to go to their neighborhood high school, where fewer than half of the Black male students earned a diploma.

As a 14-year-old freshman, Moore remembers how hard it was to adjust to the new rules and rituals at Urban Prep. The students wear blue blazers, red ties and khaki pants. They recite the Urban Prep creed every morning.

“We believe,” the students declare, followed by a series of chants: “We are college-bound. We will never succumb to mediocrity, uncertainty or fear. We are our brother’s keeper.”

These messages set in over time, Moore said, countering the negative messages that can come at young Black men.

“It allows you to really start to change your mindset and how you live your life,” Moore said. “There is a lot on the line for ourselves as Black men. We can go on the path of distraught — dead at 25 or have a hard time finding a job or don’t finish school at all. So they always enforced the creed because they didn’t want us to live by certain stereotypes of Black men.”

The public also took notice of Urban Prep students, seeing professionally dressed teenagers riding trains and buses to school, heads held high.

Moore’s class, the first class to graduate from Urban Prep, was the first with all seniors admitted to a four-year university. Moore went on to Northwestern University.

“It was a really big deal because it was finally like validation that all my mom’s hard work and reenforcement to have me stay in school and out of trouble paid off,” Moore said. “Urban Prep was a big part of not only how I got into Northwestern but just my life in general. It really changed the scope of my life in a big way.”

Family members cheer on Urban Prep Academies graduating seniors at its College Signing Day May 19 at Daley Plaza.

Family members cheer on Urban Prep Academies graduating seniors at its College Signing Day May 19 at Daley Plaza.

Pat Nabong / Sun-Times

For 13 years, according to Urban Prep, every one of its graduates has been accepted to a college. But it has been criticized for not discussing the students who transfer out, including some who say they were pushed out, and the fact that far fewer graduates actually enroll in or complete college than are admitted.

Still, King has stood behind his vision for creating a school that drills pride and confidence into students.

This spring, at the school’s annual college signing day ceremony, he told the students gathered at Daley Plaza how powerful it is to show the world a picture of young Black men who are college-bound.

A few days earlier, a Black 16-year-old was fatally shot a few blocks away when a large number of teenagers gathered in Millennium Park. Many were there just to hang out. But TV stations flashed images of the teenagers, some standing atop cars, others twerking in the street.

King told the graduating seniors they were replacing these negative images in the public’s eye.

Then, one by one, the young men stepped to the microphone to announce their college choices. Some shared their achievement quietly. Others shouted for all to hear.

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