Of Camden's seven charter schools, LEAP has been among the top recipients of Title I funds, given to public schools with a high percentage of poor students through the federal No Child Left Behind program.
The state administers the money in a reimbursement-type system that requires school administrators to submit expense verifications.
LEAP was budgeted to receive $640,058 in the 2009-10 year. The audit was triggered when state officials compared LEAP's reimbursement receipts to a final report by the charter school that included expenses prohibited under Title I rules.
The report "did not match what had been requested via reimbursement," Education Department spokeswoman Barbara Morgan said. A review of the 2010-11 school year is pending, she said.
In 2010, LEAP sought an amendment to its state charter to open a campus in Cramer Hill in August 2014. A February request to increase enrollment at the planned school was denied pending results of the investigation into financial mismanagement, according to a letter dated April 4 from acting state Education Commissioner Chris Cerf.
LEAP officials expressed confidence Tuesday that the issue would be resolved quickly.
"We have such a large waiting list that we put in" for permission to accept more students, Bonilla-Santiago said. "We don't need it until 2016, but would like to have it."
Bonilla-Santiago blamed the mismanagement of funds on a former business administrator whom she declined to name.
According to federal rules, 5 percent of Title I grant money can go to toward administrative salaries. LEAP was entitled to $32,003 for the salaries in the 2009-10 year, but it requested and received $114,601 to help pay for three administrative positions.
About $32,000 in requested reimbursements were accompanied by no detailed expense records. The school also spent about $22,000 on field trips, which the state auditors classified as amusement and ruled ineligible for Title I funds.
LEAP turned in a corrective action plan to the state on Friday, Bonilla-Santiago said.
Though the school wanted to appeal some of the findings - including the exclusion of some field trips, which administrators said were for educational purposes - the charter's board of trustees decided it wasn't worth the fight, said Wanda Garcia, liaison to the LEAP Academy board.
"Sometimes it's better to just do it than nitpick," Garcia said.
During the 2011-12 school year, 90 percent of LEAP's $12.8 million budget came from the Camden School District. Federal funds were expected to provide $722,463.
Since the audit findings were issued, LEAP has hired a grant administrator and beefed up its finance department, including hiring a business administrator who is familiar with Title I, LEAP officials said.
"We are going to have quarterly internal audits" to keep track of expenses and use of grants, Garcia said. "We are not charging any field trips to Title I."
Founded in 1997, LEAP is one of Camden's more prominent charter schools, with a large downtown campus. In August, LEAP will open a new 60-student high school that will focus on science, technology, engineering, and math, and a new K-3 school. LEAP Lower School (K-6) and LEAP Upper School (7-12) are one block apart on Cooper Street.
LEAP has partnered with the Cramer Hill Community Development Corp., a nonprofit housing developer, to open a charter K-8 school in Cramer Hill that will have an environmental focus.
The Cramer Hill CDC plans to purchase about six acres near the entrance to Petty's Island on 36th Street, according to Manny Delgado, its executive director. The land is now owned by the Camden County Municipal Utilities Authority.
Delgado, who is a LEAP trustee, said his group may build the school and lease or sell it to LEAP.
LEAP plans to move forward with its plan for the environmental school, Bonilla-Santiago said.
With its financial matters settled, LEAP could reapply next year for permission to expand enrollment at the environmental school, according to state officials.
Provided all other requirements are met, the decision would go into effect in time for the 2014 opening, state officials said.
Contact staff writer Claudia Vargas at 856-779-3917, or email@example.com or on Twitter @InqCVargas. Read her blog, "Camden Flow," at www.philly.com/philly/blogs/camden_flow /