EASTON ARTS ACADEMY

30 North Street, Easton, 18042
Phone (484) 546-4230 Fax (610) 829-6076

July 30, 2020
Dear Parents, Staff, and Easton Community Members,

Over the past few weeks, Easton Arts Academy Elementary Charter School has
been taking decisive action related to the ?ndings of a recently provided forensic investigation
report (the ?Report?). While we, the Board of EAAECS (the ?Board?), endeavored to conduct a
full and complete investigation prior to releasing any ?ndings on this matter in an effort to deter
any potential public confusion, recent events compel us to respond to misinformation that has
been promulgated. To that end, we want to express our appreciation for the work the forensic
auditor, Mr. Bedics, undertook and provide you a status update, particularly related to the Form
1099 matter.

First and foremost, any statements or assertions that we, the Board, have not taken action in
response to the Report is categorically false. While the Report is dated July 2nd, the Report was
not actually shared with the entire Board until July 9th. Upon receipt, the Board quickly
scheduled an executive session for July 13th to discuss its contents. At the July 13th meeting,
directives were given, including to Dr. Chadwick Antonio, CEO, to begin collaborating with
business controller, Charter Choices, to update ?nancial policies and procedures
based on the auditor?s recommendations and to General Counsel to obtain
additional information related to Mr. Bedics? ?ndings from Charter Choices; Buckno Lisicky,
annual auditor; and the IRS. Since July 13th, EAAECS and General Counsel have
been following those directives.

Second, obtaining additional information to support the Report?s ?ndings was particularly
important here because COVID-19 prevented the forensic auditor from being on-site at EAAECS
and reviewing all relevant documents. Mr. Bedics expressly states in his report that:

?It is cost prohibitive and not practical? to review all ?nancial transactions;

COVID-19 ?limited the scope of the audit and Bedics?] ability to continue
gaining access to the school making it dif?cult to retrieve all records necessary to be
reviewed and analyzed?; and

He was unable to interview a number of employees who may have had knowledge
because they had previously resigned or were terminated by the Board.

Thus, Mr. Bedics did the best he could with the information he was able to obtain under the
circumstances. While EAAECS continues its investigation based on the information provided in
the Report, and no conclusions have been reached thus far, the following are relevant ?ndings

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speci?cally related to the Form 1099 matter that we do not believe Mr. Bedics had knowledge
of:

1. When Charter Choices, business controller, was recently asked by
General Counsel whether they had uncovered any fraudulent conversion of
funds, they answered: ?We have not.?

2. When Buckno Lisicky, auditor, was recently asked by General
Counsel if they had uncovered any fraudulent conversion of funds, they answered: ?We
did not detect any fraud in our annual audits.?

3. Charter Choices recently provided to EAAECS the 2018 vendor transactions summary
which did not reveal any evidence that the school actually spent $570,472.19 to
PenTeleData.

4. EAAECS utilizes People?s Security Bank Trust Company a ?nancial
institution. A 2018 vendor transactions summary provided by Charter Choices included
the net activities of PSBT with the other vendors, though PSBT is not a vendor itself. An
individual completing the 2018 Form 10995 who used this summary?and who viewed
the entries in alphabetical order?would have seen PSBT directly underneath
PenTeleData.

The amount currently indicated on this 2018 summary for PSBT is $570,777.19; this
represents the net activity at the bank, not expenditures spent by the school. This amount
is a difference of only $305 from the Form 1099 in question made out to PenTeleData.
Charter Choices has explained to EAAECS that it is certainly possible that when an
individual pulled this information from Quickbooks Online to complete the 2018 Form
1099s, the numbers could have been different.

5. After July 13, 2020, when EAAECS began its internal investigation into the 1099 matter,
an EAAECS employee voluntarily came forward and informed EAAECS that they were
the individual who put together the information for the 2018 1099s and that they must
have mistakenly used the amount listed for PSBT on PenTeleData?s Form 1099.

6. No ?ndings thus far have con?rmed that the school actually spent $570,472.19
inappropriately, or that these funds were otherwise misappropriated, embezzled, or
fraudulently transferred.

7. EAAECS currently suspects that the Form 1099 in question was simply a clerical error,
though, nonetheless, EAAECS will continue its investigation to ensure that public funds
were appropriately used, including cooperating with authorities.

Third, we have been wanting to meet with Mr. Bedics to discuss his report since its receipt by the
whole Board, and more recently to update him on these recent ?ndings. Unfortunately, Mr.
Bedics has been unavailable to discuss the report and only recently informed the Board on July
24th that he would soon have availability again to meet. We scheduled a meeting upon
learning this and will be meeting with him soon.

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Please be aware that the Board thus far has not yet spoken to Mr. Bedics about the speci?c
contents of his report, so it is unclear to us who erroneously advised him that the Board had a
negative opinion of it, as he asserted in the July 27, 2020 article by Mr. Rudy Miller for Lehigh
Valley Live: 


Whoever told Mr. Bedics this did not have authority by the Board nor did their
misrepresentations to him re?ect the Board?s opinion of the Report. To the contrary, the Board
greatly appreciates the work, ?ndings, and recommendations of Mr. Bedics and seeks only to
improve the processes and procedures of the school with the information he has provided.
Regrettably, whenever internal con?dential investigations such as these are published by the
media, especially while it is still being processed by the organization, it invites opportunities
from bad actors to take advantage and harm the organization. Without more information, we can
only assume that Mr. Bedics was misinformed by such a bad actor.

While the Board has not yet had the opportunity to personally speak with Mr. Bedics about the
Report?s contents, General Counsel with Dr. Antonio recently sought his
professional judgment on some of the new ?ndings mentioned above. Our understanding is that
Mr. Bedics will be reviewing and incorporating those ?ndings into an updated report.

Fourth, the Report includes a number of other ?ndings that largely re?ect actions taken by the
prior administration. The bulk of those individuals have resigned or were previously terminated
by the Board. We appreciate the recommendations Mr. Bedics has provided regarding the
Report?s ?ndings. EAAECS is in the process of strengthening its policies and procedures in
response, as directed by the Board on July 13th. Where appropriate and possible, EAAECS will
be rectifying past actions.

The Board has ?duciary duties to do What is best for EAAECS, which means doing what is best
for students. We upheld such duties by taking action in addressing the
allegations made in the Report. We will continue to take all necessary action to resolve these
outstanding matters, including cooperating with authorities. We will also continue to remain
honest while dealing with all issues that come before us and will make all decisions with a goal
to provide an exemplary education for students.

With the support of the taxpayers of it is the Board?s intent to be good ?duciaries
and to apply precious resources while guiding the education of nearly 400 students. We believe
that the EAAECS has made great strides as it continues to work tirelessly for the children who
populate our school. We have full faith in new administration and new Trustees to
help guide EAAECS towards excellence.

We thank you for your continued support of the school and staff. If the Easton Arts Community
has any questions or comments, please forward them to the Board?s attention and we will try to
address them in a timely fashion.

Sincerely,

sjy?ttmmu?a?
Mica Lle

rerman
President, Board of Trustees
Easton Arts Academy Elementary Charter School