Energized to Exploit

Researched and written by Sarah Terrell and Ann Eagleton

The HISD Board of Trustees is set to vote on renewing the in-district charter school contracts for Energized for Excellence Academy and Energized for STEM Academy at the May 14, 2020 board meeting. (Agenda item F-2).

Last year the HISD board voted 5-4 to renew these in-district charter contracts despite an exposé in the Chronicle that began “A trio of intertwined charter school networks operating within Houston ISD have paid or lent at least $17 million during the last five years to a company owned by their highest-ranking employee.”  Using her management company, Educational Learning and Enrichment Center (ELEC), Bullock has siphoned millions through fees, rent, and loans to herself. 

By the end of FY 2018, according to the schools’ audited financial statements, ELEC owed the schools $8.3 million:

 

Loans/Advances
to ELEC 
(end of 2018)

Energized for Excellence Academy (EEA):

 

Note receivable from ELEC in 2030

             $4,156,102

General unsecured cash advances to ELEC

             $2,676,712

Total owed to EEA

             $6,832,814

   

Energized for STEM (ESTEM):

 

Note rec from ELEC, installments due 2020-2024

             $1,517,007

   

Total loans to ELEC (Lois Bullock)

             $8,349,821

Despite the Chronicle exposé, HISD renewed Bullock’s contracts in 2019.  HISD did not even place the schools on probation. 

Emboldened, Bullock charged the schools $12 million in fees and rent in 2019. Most eye-catching is the $4,156,102 in retroactive management fees for the years 2012-2018.  It EXACTLY equals the balance of the note due to EEA in 2030. What a coincidence!  The high fees also wiped out all the other debts ELEC owed to EEA.

By the end of FY 2019, ELEC had gone from owing EEA $6.8M to ZERO, and had not paid back one dime to the students. EEA is 100% Title I and 97% of the students are economically disadvantaged. Houston’s poorest children have unknowingly been relegated to serving as Ms. Bullock’s benefactor.

Management Fees charged by ELEC:

2018

 

2019

% increase

EEA *

         $400,000

 

     $6,979,481

 

ESTEM

         $100,000

 

     $1,113,189

 

Inspired for Excellence Academy (IEA)

                   -  

 

        $218,007

 

Total

         $502,018

 

     $8,312,696

1,556%

         

Rent ELEC charged to EEA

      $2,075,940

 

     $3,641,754

75%

Total rent and fees charged by ELEC

      $2,577,958

 

   $11,954,450

 

* 2019 includes $4.2 million retroactive fees.

HISD’s job is to educate children.  Yet they do not hesitate to hire a charter school group that spends more money on General Administration than on Instruction.

FY 2018 Energized for Excellence’s Instruction expense:   $  8,210,808

FY 2019 Energized for Excellence’s General & Administration expense:   $  8,495,817

EEA General  Administration cost is 103.5% of Instruction expense

----

HISD 2018-19 Instruction expense $ 1,000,417,027

HISD 2018-19 General & Administration expense $ 35,679,582

HISD General Administration expense is 3.5% of Instruction cost

The General Administration expense does not include the rent. That is a separate item (“occupancy expense.”) Let this sink in. Energized for Excellence spent more money in 2019 on “management” than they spend on instruction.  That fact alone should be a disqualifier for the Energized group. But HISD Admin doesn’t think so!  Admin recommends renewing all these contracts. 

What about our trustees' fiduciary obligation to make sure education dollars are spent on actually educating our children?  Even if HISD Admin is not willing to protect the students’ funds from being looted, our trustees should.

After last year, this is like deja vu all over again. The corruption and self-dealing are now so obvious it is almost comical, and yet there are trustees prepared to renew her contracts again. The HISD Finance department has abdicated their financial oversight responsibilities and is relying on Ms. Bullock’s accountant to sound the alarm for them.  When has putting the fox in charge of the hen house ever been a good idea? Especially when the “hens” are Houston’s poorest children.

We must stop the theft and corruption. Our trustees must vote NO on the Energized contracts.  It’s not too late to contact the HISD Board of Trustees or register your comments for tomorrow’s board meeting.

 

 

 

  • Ann Eagleton
    published this page in Blog 2020-05-13 17:50:19 -0500

Donate Find an Event Volunteer

connect

get updates