LANSING — No decision came Thursday from a lengthy appeal hearing regarding a Traverse City Area Public Schools virtual home-school program.

The two-and-a-half hour meeting between TCAPS officials and the district's lawyer as well as Michigan Department of Education auditors and its legal team was set to determine if TCAPS misclassified some of its students, resulting in a $700,000 overpayment.

However, it featured more sauce than substance with neither a resolution nor a timeline for a resolution being set.

Paul Soma, TCAPS superintendent, said the more-than-yearlong investigation into the Northern Michigan Partnership is a "concerted effort to undermine programs specifically intended for home-schooled students" and the "result of people legislating from their desks with a bias against home-school families."

"If the state is allowed to undermine and people in positions of power are allowed to abuse that power on the basis of a personal bias, I don't know how anything functions," Soma said. "I believe this is a conspiracy happening at the state. They are not reining in this very clear bias, and we're going to try to continue and expose this."

The Michigan Department of Education sent a letter in October 2018 stating that TCAPS received more funding for the 2017-18 school year than was allowable under the State School Aid Act because of a misclassification of NMP students. The state was set to reclaim $707,000 based on the finding of a quality control review conducted by MDE auditor Gloria Suggitt, which TCAPS officials and lawyers maintain was illegal and also deprived the district of due process.

Robert Dietzel, TCAPS lawyer, submitted documents to State Superintendent Designee Bob Taylor before the appeal hearing Thursday, claiming the state office of financial management erroneously "miscalculated the allowable FTE for virtual courses, determined without legal or factual support that some courses were unallowable private lessons and that certain courses are essential courses in which home-schooled students may not enroll."

The documents also state Suggitt never visited NMP nor did she contact TCAPS officials to discuss her concerns before making "false assumptions about how (NMP) was being operated."

Suggitt was not present at the appeal hearing, which TCAPS legal representation also objected to because she would have provided firsthand knowledge of her decision-making.

Caitlin Hengesbach, Suggitt's supervisor and MDE audit manager, was present. Tensions rose and tempers flared during questioning of how the students should have been calculated.

At one point, Travis Comstock, who was representing MDE, physically restrained Hengesbach from speaking about her findings and yanked her by her arm. Comstock also raised his voice several times and instructed his clients to stop talking. At another particularly tense moment, Comstock stormed out of the room and had a private conversation with Taylor.

Dietzel took issue with the private conversation.

"The attorneys for the department and our decision-maker here just went out and had a conversation to which TCAPS and its counsel were not privy," Dietzel said, citing a lack of proper due process in the hearing.

Soma said that multiple people from the state appeared frustrated and were arguing among themselves while trying figure out the basis for the audit.

"They were trying to find holes, and there simply isn't any. They can't find anything," he said. "The problem is with the state and a false accusation made in a quality control review that was done in the dark of the night with no ability for us to talk about it."

Soma cited a lack of direction and explanation from state officials as to how the district miscalculated the findings, how to appeal the findings and why multiple clean audits of the NMP were overridden by Suggitt's review.

NMP was FTE audited in spring 2017. No deductions were issued. It was audited again in fall of 2017 — this time with a site visit — and again produced a clean audit. In spring 2018, no deductions were found again. Another field audit was made in spring 2018 and continually produced clean results. It was only this subsequent quality control check that dinged the program for the FTE problems.

"We're like three years into this and talking and working with everyone that wants to work with us. Now they come in and say, 'Nope, you're not in compliance. Now we're not going to talk to you.' Can't you see how frustrating that is?" Soma said. "We've been doing this in the light of day, and then they come in and turn the lights off. That speaks to an agenda."

Rose Zivkovich, NMP director and parent of two students in the program, agrees.

"We really feel like we were targeted and being picked on because we're home-school students," she said. "Where are our rights?"

NMP has grown from 81 students in fall 2017 to now 264 students this school year. Zivkovich said the program provides a valuable service for students and families that has met the needs of all involved. She worries all of this trouble could lead board trustees to shutter the program.

"The board sees value in it, but they are also responsible for the risk that is happening here. Can the board continue to take on the risk of potentially losing more and more funds or being threatened to lose funds when there's no answer to what's going on?" she said.

"They can just flippantly take away all of our funding and have no cause for it. How can you run a program like that? How can the board stand behind a program like that?"

Soma said he has no intention of letting the program get shut down or backing down from this fight against the state.

"It's doing too much good for too many people to back track. No way," Soma said. "They (the state) have not been able to demonstrate any area where we've failed to comply with the law. So I'm very comfortable going forward based on that. What I am not comfortable with is this being a very clear indication of this being bias — MDE- and state-sanctioned bias — against home-school families."

The state superintendent's office has asked Suggitt to provide more details about her findings, and TCAPS will be afforded an opportunity for a final appeal determination. Cost for the appeal has surpassed $20,000 for TCAPS, Soma said.