After launching SAIL, records show, Mr. Riccio increased the budget and enrollment at a rapid pace, earning himself increasingly lucrative contracts and autonomy over the school’s finances. By 2007, SAIL was receiving 79 percent of its $5.9 million in annual revenue from the District of Columbia.
But school audits, internal documents, e-mails and memos, along with former employees who were not authorized to speak publicly on the matter, portray Mr. Riccio’s 10-year run as plagued by mismanagement and high administrative turnover.
One former administrator, who worked at SAIL for more than five years and has been interviewed by the FBI, was struck by Mr. Riccio’s persistent cost-cutting measures and aggressive strategies to find grant funding or maximize per-pupil subsidies.
The ex-administrator said Mr. Riccio controlled the finances for both WVSA and SAIL, and wanted to buy property for an upper school to complement a $2.8 million property that housed the elementary school at 16th and L streets in Northwest Washington.
Despite such ambitions, SAIL’s finances were stretched so thin, the former administrator said, that the school had to cancel student field trips and other educational outings. On several occasions, the former administrator said, the school had to take out payday loans to meet payroll demands.
Internal memos and e-mails also show that administrators and grant writers had difficulty accessing grant money that had come into the school. Some of the correspondence shows that Mr. Riccio sought to pay private school loans and some salaries with grant funds that were not allocated for such purposes.
“No one ever knew what we had, moneywise,” the former administrator said. “We didn’t have budgets. We just were told if we could run a program or not.”
Teachers routinely paid for their own supplies, said the second former administrator, whose colleagues at one point agreed to forgo a raise.
“Once we had no paper, and Mr. Riccio wouldn’t let us buy any,” the former administrator said. “Yet we had hundreds of thousands of dollars in grants.”
Both former administrators, in addition to a third former administrator who also spoke anonymously, said they addressed their concerns to the charter board as early as 2003, but they never saw anything come of it. One of the former administrators conceded they could have done more to confront the problem, but resigned instead.
One financial consultant lasted eight weeks, another less than three months. The school had three principals in three years. Independent audits and records offer a paper trail that put the school’s trustees on notice at least five years ago that something was wrong, yet they failed to take action.
For the year ending June 30, 2005, an audit by Walker & Co. LLP identified three contracts each exceeding $25,000 that bypassed charter board approval as required. The audit also noted that SAIL and WVSA shared expenses and borrowed or loaned funds to each other — along with other affiliated entities that Mr. Riccio had established — and that some of the entities were in debt.