Children's Village Academy faces a pivotal moment as the Charter School Review Board prepares to vote on March 11, 2024, on the renewal of its charter amidst allegations of financial mismanagement. The state Department of Public Instruction (DPI) has recommended against the renewal following a series of investigations that unveiled alleged inappropriate spending and conflicts of interest involving high-ranking officials connected to the school.

In February 2024, DPI ordered the Kinston-based school to repay $162,597 for what it termed "unallowable costs." This order stemmed from a December 2023 report alleging conflict of interest violations and the misuse of state and federal funds. The allegations centered on financial transactions involving Peggy Carr, a former vice-chair of the school's board and a high-ranking federal official at the National Center for Education Statistics.

“CVA has appealed DPI’s determination that the expenses in question—which total approximately $5,000—constitute “unallowable costs” under the 21st CCLC program,” said Carr’s Lawyer Matthew Tilley in a letter to the review board. “However, the mere fact that DPI has not allowed the school to use grant funds to pay for these items does not mean they were not used for school purposes.”

Carr's involvement with the school includes a $188,000 loan granted in 2008 to help the institution through financial difficulties. DPI has questioned the documentation of this loan and the more than $140,000 in interest payments made to Carr. In a move to address these concerns, Carr has agreed to forgive the remaining balance of the loan, signaling a step towards rectifying the issues highlighted by DPI.

The scrutiny extends to the utilization of federal grant funds for purchasing various items for a property owned by Carr, which the school uses for tutoring students. DPI raised questions about the use of these funds for non-educational purposes, including the payment of utility bills for a property also used for a U-Haul business.

Despite these allegations, school officials, including Executive Principal Jessica Jones, have expressed their commitment to addressing the concerns.

“We are confident that these steps will ensure that CVA continues to operate in compliance with all legal requirements and recommendations,” said Jessica Jones, the school’s executive principal. “We hope that the Charter School Review Board takes into consideration these action steps for improvement and renews the CVA’s charter so that it may continue its mission to successfully serve at-risk populations in Kinston and surrounding areas.”

 The school has taken steps to investigate the questioned financial transactions and enhance its internal control policies.

The state Office of Charter Schools, citing "material violations" and a "failure to meet generally accepted standards of fiscal management," has shifted from an initial recommendation of a three-year renewal to suggesting non-renewal of the charter. This recommendation comes despite the school's efforts to rectify the identified issues and its significant role in the community.

As the March 11 meeting of the Charter School Review Board approaches, the fate of Children's Village Academy hangs in the balance. The decision will not only impact the school's operations but also the educational prospects of its 151 mostly economically disadvantaged students.