A Twin Cities charter school chain has until March 13 to prove financial solvency or face closure.
Seven Hills Preparatory Academy, a K-8 classical charter with campuses in Burnsville and Richfield, discovered an accounting error last July that overlooked almost $1 million in expenses. While Seven Hills cut salaries for the upcoming school year in response, their financial viability is still in limbo.
Since 2021, Seven Hills Preparatory Academy’s fund balances and mid-year cash on hand balances have not met authorizer standards. At the time, the FY 2024 annual report submitted to their authorizer, Friends of Education, admitted that the situation “warranted monitoring”.
Friends of Education submitted a formal Notice of Concern to the school on February 20, which warned the school that the authorizer is considering a school closure. The letter was discussed publicly for the first time at a March 5 board meeting, amid many concerns from the school community about a lack of leadership.
The notice expressed “significant concerns regarding the financial stability and long-term viability of Seven Hills Preparatory Academy.” It detailed several administrative delays and missteps, including the delay of a published budget for more than six months into the fiscal year (after the accounting error was discovered), the issuance of employment offers before yearly budgets were finalized, the nonappearance of a consistently-requested 10-year financial forecast, and the unacceptable quality of a recently provided 5-year financial forecast.
Seven Hills Preparatory Academy can still avoid contract termination. Friends of Education requested that they submit by Friday a credible 10-year financial forecast, a capital assessment plan, and “a written corrective action plan addressing liquidity, covenant compliance, and the path to achieving the required fund balance target.”
Friends of Education has a legal duty to oversee the financial performance of the charter schools in their portfolio and to close schools if they become financially nonviable. Friends of Education has not publicly posted any previous letters of concern or records of action taken regarding Seven Hills Preparatory Academy. Greater authorizer transparency regarding previous concerns, which is mandated by state law, might have led to stronger community involvement and oversight.
Academically, Seven Hills Preparatory Academy performs higher than the state average. In 2025, 51.5 percent of all students were proficient in mathematics, and 62.8 percent were proficient in reading. Minority students are served well at the school; all minority groups have performed above state averages for years.
Only Friends of Education can determine if Seven Hills Preparatory Academy’s financial issues are significant enough to warrant closure. It remains to be seen if school staff will satisfactorily meet Friday’s deadline to prove financial solvency.
