ST. LOUIS — The sponsor of Kairos Academies, a charter school in the Marine Villa neighborhood, has raised red flags over the school’s financial and leadership practices involving a shadow group that employs nearly two-thirds of the staff.
The school’s founders created Kairos Academies Vanguard for “charitable and educational purposes” before the school opened three years ago, according to records with the Missouri Secretary of State. The nonprofit has since grown to employ 36 staff members out of 56 who work at the school, including 10 teachers and all administrators.
Kairos has funneled millions of taxpayer dollars to Vanguard for bookkeeping, human resources, student recruitment, special education and other services, all without a contract. While Vanguard staff members work full time at Kairos, are listed in the school directory and share a staff handbook, school leaders say they are exempt from state laws requiring the release of financial information and participation in an educators’ pension fund.
Vanguard qualifies as a quasi-governmental body subject to Missouri Sunshine Law because its primary purpose is to contract with a taxpayer-funded school, said St. Louis lawyer Elad Gross.
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“Schemes like this one to spin off a nonprofit organization are trying to do what a lot of corporations do,” Gross said. “Folks are using those same Wall Street-type practices to avoid liability and public transparency.”
In a “letter of concern” sent this month, the Missouri Charter Public School Commission that sponsors Kairos outlined a 13-point correction plan for the school to complete by March 31. The plan calls for an approved contract with Vanguard, separate audits of the school and the nonprofit, and legal oversight and training on open records laws.
Kairos violated Missouri regulations by not following policies regarding its relationship with Vanguard including approval from its sponsor, according to Robbyn Wahby, the charter school commission’s executive director.
“These requirements exist to ensure that public funds for the education of Missouri students are managed transparently and appropriately,” Wahby wrote in the Feb. 4 letter.
After receiving Wahby’s letter, Kairos set up a mailbox for Vanguard at a coworking space across the street from the school on south Jefferson Avenue. The Kairos board held a special meeting Wednesday to approve a temporary contract through March that pays Vanguard $282,480 per month. Clayton lawyer Hugh Eastwood serves as president of the board of both organizations.
The charter commission “is demanding that the school have a detailed contract with Vanguard so that the commission and taxpayers will know how public funds are used” by the March 31 deadline, Wahby said. “We are pleased that Kairos Academies’ board agrees with our findings and is working to put in place the remedies we are requiring of them.”
Kairos Academies opened in fall of 2019 led by CEO Gavin Schiffres and chief strategy officer Jack Krewson, son of then-mayor Lyda Krewson. The founders were both 25 at the time and graduates of the two-year Teach for America program. The education reform group Opportunity Trust contributed more than $300,000 in startup costs and continues to provide annual grants.
Kairos now enrolls about 400 students in fifth through eighth grades and will start a high school with ninth graders in the fall. Last spring, 35% of students tested proficient in English and 33% in math on state standardized tests. Only eight current staff members, including Krewson and Schiffres, were with the school when it opened in fall of 2019, according to the school directory.
Schiffres said Vanguard was formed with the “idea of creating a vehicle where we could take what we learned and potentially bring it to other regions, take the Kairos method and proselytize that.”
Charter schools are publicly funded and independently operated. Under Missouri law, charter school employees are required to participate in the Public School Retirement System of the City of St. Louis. Kairos pays 15% of the salaries of 20 teachers into the retirement fund, according to an audit of fiscal year 2021 by St. Louis accounting firm KEB.
The school’s administrators, plus Spanish, art and special education teachers, the principal and head of athletics and secretarial staff are considered contractors who are exempt from the fund. Those 36 employees can receive up to a 3% match for a separate retirement fund, according to the Kairos staff handbook.
The audit of Kairos included Vanguard as an affiliate because “the entities are commonly managed.” It shows the two organizations combined received $3.3 million in local, state and federal tax revenue in fiscal 2021.
A review of state and school records shows other examples of Kairos operating like a private organization:
• Eight teachers including three English teachers have no Missouri teaching certificates. An additional seven have substitute certificates, according to the Missouri Department of Elementary and Secondary Education. Nilesh Patel, who is slated to lead Kairos’ high school this fall, has no state certification. The Kairos community handbook reads, “Please assume that your child’s teachers are not certified to teach in their assigned grade level or subject. Although most are, Kairos takes cues from the best private schools around the country and recruits talent with diverse, real-world experience.”
• Like traditional public schools, charter schools are not allowed to discriminate in admissions. The Kairos staff handbook suggests that family income can play a role. “Enrolling another low-income student will make it harder to get the high academic results my team is striving for … disadvantaged students tend to come in below grade level,” the handbook describes as a hypothetical admissions decision. “On the other hand, our Finance Team understands the economic value associated with any student: they’re ‘customers’ the state pays us to educate.”
• Kairos received $163,000 in 2020 through the U.S. Small Business Administration’s Paycheck Protection Program. The school also anticipates receiving about $2 million in coronavirus relief for public schools from the U.S. Department of Education, according to its records.
• The Kairos handbook says staff must keep financial information, vendor contracts and curriculum confidential.
In October, Schiffres said he would step down as CEO of Kairos because of “some personal capability gaps with regards to organizational management,” according to board meeting minutes. Schiffres said the next CEO should have “experience managing a medium to large organization” and “clear vision around operational execution.” In a letter about his resignation, Schiffres said he plans to stay on with Kairos as a strategic adviser.
The job posting for Kairos CEO says applicants should have a minimum of five years in educational leadership.