The school's accounts have been drained, and the school has run deficits as high as $406,617, according to school and district documents.
An Inquirer analysis shows the school spent 38.4 percent of its 2006-07 budget on instruction - the fifth-lowest percentage of 118 charter schools in the state.
And, in a 2006-07 IRS filing, the school reported spending part of its $4.4 million budget on noneducational items: $179,736 on legal fees; $13,633 on meals and entertainment and $26,549 on travel. Only $21,369 was spent on books and instructional materials.
It also paid $616,155 - 14 percent of its budget - in rent to subsidiaries of Germantown Settlement.
Emanuel V. Freeman, president of the school's board and Germantown Settlement, denied wrongdoing and vowed to appeal any decision to close the school.
Germantown Settlement Charter is the third Philadelphia school to fall under federal scrutiny in a widening probe of publicly funded charter schools for mismanagement, misuse of public funds, and cronyism.
Troubled by the school's academic and fiscal woes, the Philadelphia School Reform Commission voted in April to deny the school a new five-year charter. The commission held hearings this summer and will make a final decision Wednesday. If the SRC votes to close the school, it would be a first in 11 years of charters in Philadelphia.
The allegations under federal, state and district review at Germantown Settlement Charter are similar to those under investigation at Philadelphia Academy Charter School: missing funds, improper spending, and conflicts of interest between the school and its parent group, including lease agreements with related nonprofits.
Philadelphia Academy remains open with a new board and new administrators while the federal criminal probe continues.
