Audit Finds Closed Why Not You Academy Lacks Funds to Repay $3.8 Million in Debt

Why Not You Academy, a Des Moines public charter school that closed in June, lacks sufficient cash reserves and future funding to repay about $3.8 million in debt due by June 2027, according to a new state audit.

The Washington State Auditor’s Office found that the school did not adequately assess current and future funding when approving significant improvements to its leased building and taking on debt obligations. 

The accountability audit was published yesterday and covers September 1, 2024, through June 30, 2026.

The school, operated by the nonprofit Cascade Public Schools, leased and improved its building in anticipation of about 400 students but served about 64 in its final year, auditors reported. 

Declining enrollment reduced funding, while recurring operating losses and dwindling reserves contributed to the board’s decision to close.

The board voted in November 2025 to discontinue operations at the end of the 2025-26 school year. The school closed June 30.

According to the audit, the school lost a founding partnership with a financial sponsor in fiscal year 2024 and struggled to attract and retain students. The report does not identify the sponsor.

For the 2024-25 school year, the school reported operating revenues of $3.7 million and expenditures of $4 million. Its general fund balance fell from $1.913 million in 2023 to $1.044 million in 2025, according to the report.

The financial problems followed an earlier audit warning that the school risked being unable to meet its obligations and maintain services. The new report lists that prior finding as not corrected.

In its explanation of the unresolved finding, the school said the board determined that continued recruitment and expansion were not in the best interests of students, families or the organization. It said planned measures to increase enrollment and restore financial sustainability were not implemented after the closure decision. Instead, the school focused on winding down operations and supporting students and families through the transition.

Why Not You Academy agreed with the new finding and the recommendation to work with the Washington State Charter School Commission and the Office of Superintendent of Public Instruction to complete the required dissolution process.

In its written response, the school said its closure work included addressing remaining financial and contractual obligations, transferring and retaining records, completing reporting and audits, and taking steps to dissolve the nonprofit. 

It said coordination with state agencies, legal counsel and other partners would continue until all closure requirements were completed.

The audit does not identify the creditors owed the $3.8 million or explain how that debt will be resolved.

In most areas examined, auditors found that school operations complied in all material respects with applicable laws, regulations and school policies, with adequate controls to safeguard public resources.