E.A.I. Reaches Tentative Accord To Run Michigan District

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Education Alternatives Inc. last week reached a tentative agreement to manage an entire Michigan school district, even as its operation of selected public schools in Baltimore was getting mixed reviews.

The school board in Pinckney, Mich., a small community northwest of Ann Arbor, voted overwhelmingly Jan. 13 to sign a letter of intent to contract with the Minneapolis-based for-profit firm to operate the district's six schools.

Although not a binding contract, the letter of intent clears the way for E.A.I. to enter into contract negotiations with the Pinckney board.

Baltimore city and school officials, meanwhile, last week were investigating allegations that the enrollment counts for E.A.I. schools there were inflated and that the company was being reimbursed for educating some children who seldom if ever attended its schools.

Due to inflated enrollments, a state audit said, E.A.I. had been overpaid about $500,000--an amount equal to nearly half the company's $1.1 million profit from the district for fiscal 1993. The state and district conceded that their enrollment counts could be off, however, and were working with E.A.I. to reach agreement on a correct figure.

Classroom Practices Criticized

District officials in Baltimore also were expected this week to release their first evaluation of the nine schools E.A.I. took over in fall 1992.

A district official said the evaluation gives the firm high marks for maintenance of buildings and provision of supplies and equipment. But it faults the company's management of principals, teachers, and interns and its compliance with federal regulations governing special-education and Chapter 1 programs.

In addition, the Maryland State Teachers Association was expected late last week to issue a more critical assessment of the firm's educational practices. Based on two days of observations by a school administrator from Pennsylvania, the report asserts that classroom practice in the E.A.I. schools falls far short of that portrayed in the company's literature.

John T. Golle, the chairman and chief executive officer of E.A.I., and other company officials last week dismissed the latest criticisms of the firm as part of an ongoing effort by teachers' unions and others to discredit its efforts. The controversy, Mr. Golle said, has done little to discourage investors or harm the price of his company's stock.

Attendance Counts

At the center of the disagreement between E.A.I. and Baltimore officials is the question of how enrollment and attendance should be counted in its schools. The company's five-year contract calls for it to receive the citywide per-pupil average of $5,549 for each student.

When E.A.I. came into the schools in 1992, it maintained that the district's enrollment projection for the nine schools was 250 students short of the 4,815 the firm had counted. Superintendent Walter G. Amprey agreed to give E.A.I. the benefit of the doubt--and as a result, an additional $500,000.

Mr. Amprey noted that one reason the firm had been brought in was to help the district make refinements in such areas as its counting of students. He stipulated, however, that the money should be repaid if the firm's count proved to be wrong.

The draft results of a state audit confirmed the district's original figures. State auditors said their figures were subject to routine revisions, however, and the district viewed the matter as unresolved.

Indeed, district officials are not necessarily eager to reject the company's higher student count. Donna J. Franks, a spokeswoman for the district, noted that using the E.A.I. figures "could mean more state dollars for our students.''

In a related development, Anthony J. Ambridge, a member of the Baltimore City Council, has called for an investigation of allegations that E.A.I. schools counted truant students as in attendance. Last week, he released documentation showing that one 15-year-old was recorded as in attendance at an E.A.I. school 26 days last fall, when in fact he was incarcerated at a state juvenile-detention center.

Mr. Golle last week said that E.A.I. is not responsible for taking attendance at its schools, but that the task belongs to district employees who report their figures to the central office.

But Mary Pat Clarke, the president of the city council, last week said the fact that E.A.I. is reimbursed based on enrollment means that it must keep accurate attendance figures.

Pinckney Prospects

The controversy in Baltimore does not appear to have discouraged Pinckney or numerous other districts that continued last week to hold talks with E.A.I.

Mark W. Tennant, the president of the Pinckney school board, said the district's contract would likely call for E.A.I. to manage day-to-day operations and assist in curriculum development and teacher training. Because Michigan law requires all public school systems to have a superintendent, the board would retain someone in that office to monitor E.A.I.'s activities.

"We are considering this because we don't have the money to provide our kids with the kind of things that Education Alternatives can provide,'' Mr. Tennant said last week.

"It is not like we have a district that has a lot of problems,'' Mr. Tennant said, adding that the board was attracted by E.A.I.'s promise to find ways to channel more money to instruction.

Although E.A.I. provided the Duluth, Minn., district with an interim superintendent for part of 1992, it has not had a long-term contract to manage an entire district.

Vol. 13, Issue 17

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