The Associated Press

COLUMBUS - A Toledo charter school was more than $450,000 in debt when school ended last year, state auditor Betty Montgomery said Friday.

The Performing Arts School of Metropolitan Toledo had a $457,340 operating loss for the fiscal year that ended June 30, 2002, Montgomery said.

The school had improper documentation, review and approval procedures for spending money, according to a state audit. Montgomery said there was "substantial doubt" the school could continue to operate.

There was no evidence that funds were misused, Montgomery said.

Jim McGhee, the school's executive director, said Friday the debt was accrued before he took over last September. He said the school owed money to 85 vendors, including a $175,000 bank loan. He said the school has cut the debt to about $300,000.

Kevin Fifer, former executive director, said he left last year after the school's board placed him on leave and didn't pay him. He said he disagreed with several points in the audit but couldn't comment until he reviewed it.

The 7-12 school has about 160 students. Charter schools are publicly funded, privately run schools free from many state regulations.