CHESTERFIELD, Mo. — The Chesterfield private school being targeted for eviction by its landlord has also struggled to pay staff members, email messages obtained by the Business Journal show. The Internal Revenue Service in 2020 also revoked the nonprofit's tax-exempt status, according to government records.
One teacher at Barat Academy this month wrote to the school's president, Debby Watson, telling her that Health and Wellness Coordinator Mike Brennan indicated "we would be caught up on payroll by next week and we would be getting 1/4 of our pay in chunks until then."
"That's why I agreed to stay," the teacher wrote, adding that she had not yet been paid.
Watson responded, "We are 100% sure we will get caught up. Until the large sum comes we are trying to get out a weekly amount."
Other messages this month from Mary West, a member of Barat's board, highlight the ongoing payroll problems.
On Oct. 5, she wrote to staff members and the board, telling them that a "partial payment" would arrive by the end of Oct. 7. "Continued efforts to resolve all are daily," she said.
And on Oct. 19, West said that another partial payment would be made Oct. 21. "Since it is a weekend know that your bank may not process it until Saturday or Monday," the message said. Among others, the email was sent to Paul McKee, the NorthSide Regeneration developer who donated land for a past Barat location in Dardenne Prairie. He didn't respond to a request for comment Thursday.
The staff member who corresponded with Watson, requesting anonymity to speak about a sensitive topic, told the Business Journal she resigned since full payment has not come.
Watson on Thursday sent a statement to the Business Journal from the school's board, which said, "Our students, families, and teachers are our most valued asset at Barat Academy. Since Covid, we, as many others, have struggled financially but TEACHERS are our top priority. Yes, we struggle but continue to pay what we can and will make sure teachers are fully compensated. Timing of cash flow is a struggle at times but we continue our journey of excellence with the great support of TEACHERS and the COMMUNITY."
People familiar with Barat's operations said the independent Catholic institution, serving grades six through 12, has 42 students and about 11 faculty members. An office administrative assistant and science teacher resigned in September, messages from Watson show.
Despite those departures, Watson told Barat staff that "the curriculum will be followed, students will have a substitute and (Head of School Kathy Puettmann) will ensure that daily classes are strong and engaging."
Barat, founded in 2007, had filed forms indicating it is a nonprofit.
But the IRS on Nov. 15, 2020, revoked its federal tax-exempt status, government records show. The IRS said the status was automatically revoked "for not filing a Form 990-series return or notice for three consecutive years."
Experts say once the IRS revokes a nonprofit’s tax-exempt status, it is no longer exempt from federal income tax and could be required to file a federal income tax return.
Watson, in an email, attributed the revocation to the school's "computer system being hacked by a foreign entity."
"The FBI and other computer consultants got them out but our full records were never restored," Watson wrote. "Therefore we tried to fix the situation in house but realized it took a professional to rebuild the past history so we hired an accounting firm... who has been working in it for resubmittal to the IRS. It has been awful and costly. (The tax-exempt status) will be restored once the IRS finalizes the reviews with (the accounting firm)."
The IRS records last show a tax filing from Barat in 2017, when it reported revenue of $1.6 million and expenses of $1.5 million. It reported getting $893,797 from tuition, $617,278 from gifts and grants, and $85,086 from fundraising.
Earlier this month, Barat's landlord, Midland States Bank, filed suit to evict it from the Chesterfield property it calls home, 17815 Wild Horse Creek Road. The case is pending, and Barat is represented by attorney Joseph Dulle of Stone, Leyton & Gershman.
Continue reading the story on the St. Louis Business Journal website.
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