Pacific Heritage's board chairman, Tip Pupua, said the school turned to Harmony last summer to recruit online students after losing 150 students a third of its student body.
"The [school's] board moved impulsively," Pupua said. "That probably was not the right decision."
A third charter school, DaVinci Academy of Ogden, told the state it is changing its relationship with Harmony to take more control "rather than having a third party vendor do our bidding," in the words of Director Fred Donaldson.
Harmony President John Thorn declined to comment Thursday. The company recruits students, many of them former home-schoolers, and then manages their instruction for charter and district schools.
An audit by the Utah State Office of Education (USOE) this winter estimated that $10.5 million in state money is flowing this year to Harmony and My Tech High Inc. of Spanish Fork via their contracts to manage 2,550 students in charter and district schools.
The audit criticized charters and one district school for what it called lax management of their students' education. A state senator even labeled the online students recruited and managed by private companies as "ghost students."
Eight charter schools were given warning letters as a result of the audit, telling them to write or tighten policies on everything from verification of teacher licenses to student attendance and truancy policies.
The eight, including Mana, Pacific Heritage and DaVinci, have until June 1 to respond, said Marlies Burns, director of charter schools for the USOE.
The state charter board, however, put Mana on probation Thursday after learning of the deteriorating relationship with Harmony.
The school has 144 in-seat students and roughly 500 online students, many of whom didn't realize they were Mana students until the school this spring began asking for evidence of student work before granting academic credit, Wolfgramm said.
Some of the parents are angry at the school, others at Harmony, said Wolfgramm, who joined the academy's board last fall.
Burns said that Mana, from the start, was seen as a "Harmony school." Its founder was a Harmony employee at the time she sought to create the school.
"There was significant concern at the time," Burns said, "that a charter was even being considered that was not at arm's length."
Organizers assured the charter board it would have a full request-for-proposals process before selecting a vendor, Burns said. "I'm guessing it was not done with as much integrity as it should have been," she told the board.
The founder resigned from Harmony before the charter was granted and was the chairman of the school's board until December, Wolfgramm said.
The school may have to repay the state, Burns said, because it improperly claimed some children as students last fall.
Harmony disputes Mana Academy's right to end the contract, and the parties are in mediation, Wolfgramm said. "It most likely will go into litigation."
The on-site school, meanwhile, is doing well and is in great demand, he said, with nearly 400 students vying for the approved 325 slots.
At Pacific Heritage, Pupua and Director Dirk Matthias said, the problem with Harmony has centered on control.
Harmony helped fill student slots and thus helped the academy keep its budget intact but the school's lack of control over teachers and curriculum has not been good, they said.
"That's one of my big concerns," Matthias said.
DaVinci appeared before the board for permission to change its mission to explicitly include online and distance learning. The school also shared other new policies it has written to address concerns raised by the audit.
A contingent of DaVinci families five mothers and more than a dozen children also attended Thursday's meeting to express support for the school's distance-learning program. The program for 532 online K-6 students is through Harmony.
"My child is not a ghost student," said April Stoddart of North Ogden, whose son attends DaVinci.
Kim Goates' four daughters two sets of twins are enrolled in DaVinci's online program.
The program, she said, is perfect for parents whose children have different needs and learning styles.
"It gives us the freedom to educate our children and still meet state requirements," she said. "You can't beat individualized learning."
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o Fifteen of Utah's 90 charter schools and 23 of the state's 41 school districts have online or distance-learning programs, according to the Utah State Office of Education. View the audit that found lax management practices. › sltrib.com