SALT LAKE CITY — A former state senator who two decades ago carried legislation establishing charter schools in Utah shed light on the recent closure of American International School of Utah, a public charter school in Murray.

“There were early warning signs five years ago they were in deficits, they were in bad shape management wise,” former Sen. Howard Stephenson told the Utah Legislature’s Education Interim Committee on Wednesday.

“It’s a shame that we didn’t have ways of intervening earlier on to remediate those kinds of things, because we had a director that was spending like there was no tomorrow,” said Stephenson.

Stephenson, a former Republican lawmaker who spoke at the school’s dedication, said he believed AISU was “the vision of what I thought of when I envisioned a charter school being a different option of what you typically see.”

The school’s closure was “a tragedy” because it didn’t shutter because of academic performance. Students and faculty thrived at AISU, he said.

“They closed because of incompetence on the part of financial managers of the school and the board itself not taking the control they should have,” he said.

According to the school’s charter application, AISU’s developer and superintendent was Michael Farley and chairman of its board of directors was Richard Maxfield.

Problems with financial management and lack of oversight coupled with the school’s unique structure — a partnership among a public charter school, a private school and a private management company — “led to the perfect storm,” Stephenson said.

AISU’s then-board of directors voted in May to close the school amid growing concern about its financial viability. The school’s last day of operation was June 30.

Earlier this year, AISU was ordered by the Utah State Board of Education to refund more than $415,000 in federal and state special education funds that state officials said were improperly spent or lacked documentation to support the expenditures.

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AISU must refund more than $400,000 in special education funds by Wednesday, state says

The now-shuttered American International School of Utah has until Wednesday to repay more than $400,000 in state and federal education funds to the State School Board, according to newly released correspondence.

Repayment of the funds remains outstanding, although liquidation of some of the school’s assets is underway and those proceeds could be used to address what is owed.

Stephenson said “all of those special ed kids got the services they should have received. It was jots and tittles in the filing that was the problem.”

Meanwhile, the state school board has established a task force to to study public charter schools’ accounting practices, use of restricted funds and their operations.

“I congratulate you for that but I ask you to consider a recommendation that this is a public issue rather than a private issue. The reason I say that is, ultimately, we’re dealing with public funds and recommendations that relate to public funds,” said Rep. Lowry Snow, R-Santa Clara, co-chairman of the Education Interim Committee.

“I think it’s important we have some level of transparency.”

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