Charter school transferred nearly $1 million to CEO in years pri - KAIT Jonesboro, AR - Region 8 News, weather, sports

Charter school transferred nearly $1 million to CEO in years prior to closing

(Source: 3TV/CBS 5) (Source: 3TV/CBS 5)
PHOENIX (3TV/CBS 5) -

Hundreds of students and their parents were blindsided on Monday morning when they arrived at Goodyear’s Discovery Creemos Academy and found the charter school shuttered.

Many were unaware of the extent of the financial trouble the school had gone through for the past few years. But it appears that at least part of that trouble was exacerbated by payments made to school administration.

Tax returns obtained by CBS 5 Investigates show an increasing amount of money paid to and transferred to Discovery Creemos Academy president and CEO Daniel Hughes and entities controlled by Hughes in the years prior to the school’s abrupt closure.

In the 2014 IRS Form 990 filing, the school showed a salary to Hughes of $60,736. But the following year, 2015, Hughes’ salary had increased to $100,000.

The filing also showed hundreds of thousands of dollars in reimbursements to Hughes for “Purchases on behalf of the school,” “Reimbursements of amount due,” and “Purchases and payments on revolving agreement.”

The payments were made to Hughes and to Creemos Association, which is a separate organization owned by Hughes.

The payments to Hughes and Creemos in 2015 totaled $949,000, according to the tax filings. 2015 is the most recent year on record, but a financial audit conducted in 2017 showed the school was still in financial trouble. The State Board of Charter Schools rated Discovery Creemos’ financial situation as “Not Acceptable.”

Hughes responded to an email sent by CBS 5 Investigates.

“I am unable to do an interview but if you have questions we can answer for you, please feel free to ask and someone will respond with a statement to address them,” Hughes wrote.

He did not respond to specific questions about the payments.

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