Cincinnati's second-largest charter school, the Greater Cincinnati Community Academy, illegally spent and misappropriated nearly $260,000, according to a report issued Monday by the state auditor.

        Auditor Jim Petro, who came to Cincinnati on Monday to discuss his findings, also cited the academy for conflicts of interest, poor record-keeping and the accumulation of more than $1.5 million in debt.

        “We are concerned about its future viability,” Mr. Petro said of the Northside school.

        The state audit on the nearly 600-student school has been forwarded to Hamilton County Prosecutor Mike Allen's office for possible legal action, Mr. Petro said.

        Marie Congo, the school's CEO and developer, said the school will pay back what it owes and continue operating as normal. Some of the money is being repaid, she said.

        “We have not illegally spent any monies,” she said. She would not comment on individual findings in the state audit.

        The academy, now in its third year, is a free public school. In Ohio, charter schools are governed by various groups, including parents, community members and private companies.

        Among audit findings in fiscal year 2001 for Greater Cincinnati Community Academy: • Treasurer Carl Shye was cited for $229,007 withheld from employee paychecks. The money was not submitted to the School Employees Retirement System as required by law for employee pensions. The school has begun repaying the money.

        • Terry Sylvester, the school's former treasurer, and Mr. Shye were cited for $23,884 that was spent for goods and services for which Mr. Sylvester could not provide documentation. Auditors were unable to locate items allegedly purchased by Mr. Sylvester.

        • More than $14,000 in goods were delivered to Mr. Sylvester's home. Mr. Shye signed for the purchases and the board members verbally authorized payments.

        • Mr. Shye authorized $1,430 in payments to vendors without documentation.

        Greater Cincinnati Community Academy also owes the state nearly $1 million for overpayment made to the school based on erroneous enrollment information the school provided to the state, according to the audit.

        Officials from the state department of education said some changes in oversight have already been made.

        “(Mr. Petro's February statewide charter schools) audit served as a blueprint for a management plan we are developing,” Ohio Department of Education spokesman J.C. Benton said.

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