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NYS Comptroller


Audits of Local Governments and School Districts

Buffalo United Charter School – Financial Management (2012M-142)

Released: December 7, 2012 -- [read complete report - pdf]

Purpose of Audit

The purpose of our audit was to examine the School's relationship with NHA for the period July 1, 2010, to June 8, 2012.


A charter school is a public school financed by local, State and Federal resources that is not under the control of the local school board and is governed under Education Law Article 56. Buffalo United Charter School is governed by a Board of Trustees that currently has eight members. The Board has entered into a management agreement with National Heritage Academies Inc. (NHA), a privately held for-profit corporation located in Grand Rapids, Michigan. The Board has been using NHA to operate the School since its inception in the 2003-04 fiscal year. The School's revenues for the 2010-11 fiscal year were approximately $8.6 million.

Key Findings

  • The Board relies almost exclusively on NHA to handle the School's finances. We therefore question whether the Board can sufficiently monitor NHA. With almost all financial duties and responsibilities assigned to NHA, the Treasurer cannot adequately fulfill certain duties as prescribed in the by-laws.
  • NHA's failure to fully disclose detailed information about its internal costs and how they are allocated to the School limits the Board's ability to verify that these charges are accurate and appropriate.

Key Recommendations

  • Negotiate changes in the terms of the management agreement with NHA in order to gain more control of the School's finances.
  • Periodically assess the terms and conditions of any management agreements to ensure that they are reasonable and in the best interests of the School.

Local Government and School Accountability Contact Information:

Phone: (518) 474-4037; Email:
Address: Office of the State Comptroller, Division of Local Government and School Accountability
110 State Street, 12th Floor; Albany, NY 12236