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For years, Karmala Sherwood, the former executive director of a Dorchester charter school, had contracts that barred her from carrying over unused sick days. But as she neared retirement, the trustees at her school changed her contract, allowing her last year to depart with $117,743 for 130 unused sick days.

The payout came at a big price for the Helen Y. Davis Leadership Academy Charter School, leaving it with a $99,000 deficit while also sparking investigations by the state auditor and inspector general.

Now, the state’s acting education commissioner, Jeff Wulfson, is recommending probation for the school, citing financial mismanagement and declining standardized test scores — a move that could ultimately lead to the school’s closure. The state education board will vote on the recommendation Tuesday.


“Most concerning is the failure of the board to exercise its duty of care in connection with retirement of the school’s former executive director with regard to a benefit granted as part of the retirement,” Wulfson wrote in the recommendation dated Feb. 16.

The recommendation said it was unclear whether the payout was allowable, given that Sherwood’s contracts for fiscal years 2012 through 2014 did not allow sick time to be carried over, while more recent contracts were silent on the issue. Sherwood, who retired last summer, continues to work for the school as a consultant.

Kevin Tarpley, chairman of the school’s trustees, defended the school’s actions. He said the board provided Sherwood with the payout to bring her compensation in line with other charter school leaders in Boston and noted that in recent years she took on multiple roles in an effort to balance the budget.

“The board amended Ms. Sherwood’s contract to remove language that prohibited Ms. Sherwood from carrying over unused sick time and agreed to allow her to reinstate that unused and accumulated sick time for a one-time payout as another means of making her whole,” Tarpley said.


“Doing so was within the board’s statutory discretion and proper under the circumstances.”

Sherwood could not be reached for comment.

Davis Leadership Academy serves about 200 students in grades 6 through 8. It focuses on helping students develop good character, problem solving skills, and an appreciation for and understanding of African-American culture.

Since opening in 2003, Davis Leadership Academy, which used to be called Smith Leadership Academy, has had multiple problems with academic performance and finances, including midyear budget cuts that prompted some parents in 2012 to call for the ouster of Sherwood and Tarpley.

The school eventually addressed the issues, but some employees contacted the state education department with new concerns about spending.

Education officials also forwarded the complaints to the state auditor and inspector general.

The auditor’s office expects to complete its investigation in the coming months, according to Wulfson’s recommendation.

While Wulfson’s recommendation did not say if the Inspector General’s Office is investigating, minutes of trustee meetings at Davis Leadership Academy in recent months suggest that the office is conducting a probe.

“Given the reemergence of poor governance practices coupled with new evidence of troubling decisions made by the school’s board of trustees, placing the school on probation signals my deep concerns about the viability of the school under its current governing board,” Wulfson wrote.

His recommendation did not specify the amount of the sick-day payout. But minutes of a June meeting of the school’s board of trustees said that the board approved paying Sherwood $117,743 for 130 days of accumulated sick time.


A Globe review last summer found Sherwood earned at least $190,000 during the 2015-16 school year, making her the sixth-highest-paid charter school leader in Boston. Information about Sherwood’s salary for her last year on the job was not immediately available.

Trustees, during an audit for its last fiscal year, attempted to underplay the role of Sherwood’s payout on the school’s deficit.

The audit included a statement from the board that said “if the board had received better advice from its ‘consultants’ the sick-time payout would not have had a ‘negative impact on the bottom line,’ ” according to Wulfson’s recommendation.

The audit confirmed a $99,000 deficit.

Sherwood’s departure was bumpy. The trustees abruptly placed her replacement on leave last summer and appointed a temporary leader.

Wulfson also cited the leadership change as a concern.

Wulfson also expressed disappointment in the school’s MCAS results. Just 19 percent of students met or exceeded expectations on the math tests, well below the 31 percent average for the Boston school system. In English, the school only performed 3 percentage points higher than Boston’s average of 31 percent.

State officials expect charter schools’ performance to be stronger than that of district schools.

Tarpley said the school is struggling to adjust to the state’s revamped MCAS exams, which premiered last spring. He noted the school’s performance previously was rated highly in the state’s accountability system. He voiced confidence the school’s scores will rebound.


“Our goal has always been, and remains, to operate at the highest level of academic success, and rest assured that we are working diligently toward that goal for the benefit of the students,” Tarpley said.

James Vaznis can be reached at james.vaznis@globe.com. Follow him on Twitter @globevaznis.