MURRAY — The board of directors of American International School of Utah voted unanimously Wednesday to postpone a decision on the future of the K-12 charter school that serves 1,300 students amid growing concerns about its financial viability.

At a minimum, the school will remain open until the end of this school year.

On March 28, Utah State Board of Education staff notified the school it must repay $514,905 in state and federal special education funds deemed unallowable expenditures.

The letter states that the state's review was used for "unsupported teacher salaries and benefits." The school has filed an appeal with the State School Board. Instead of depositing the school's funding monthly, the state is reimbursing the school for its expenses as it files required documentation. This is putting a strain on the school's finances, too, officials said.

But other financial liabilities that stem back to previous management of the school are also looming, said the school's executive director Tasi Young, who has led the school for this academic year.

In an interview prior to the board meeting, Young explained why the school is facing closure.

"We are here right now because the state has finally caught up with the potential liabilities of past management, the lack of adherence to funding restrictions from past management and a couple of agreements that are important to our current financial model," Young said.

"The state is looking at that and questioning it in a way that they cannot guarantee that we will make it through a compliance audit over the next 12 months. They cannot guarantee they will allow us to stay open and we cannot guarantee the state we can financially stay open with all those penalties and paybacks."

As staff has uncovered questionable financial issues, it has referred the information to the Utah Attorney General's Office for its review to determine if any of the issues rise to criminal conduct or civil violations.

Some board members urged a delay to allow time to study other options such closing at the end of the 2020 academic year or possibly finding a third party to operate the school.

"Let's snuggle and put a proposal together and then see. Let's call everyone we know and then see," said Mindy Young.

Tasi Young said whatever the school does, its current financial issues have created an atmosphere of uncertainty at the school.

If the school stayed open for another year, it likely would not be with the same faculty.

"If they get a job offer, I can't tell them 'just stay with me one more year,'" he said.

The uncertainty will also mean some parents will opt to send their children to school elsewhere, which will affect the school's funding, said board chairman Kent Burggraaf.

The school is currently on "warning" status with the State Charter School Board. The State Board of Education is scheduled to hear a report on the issue of repayment of special education funds during its meeting Thursday.

Earlier, the State School Board's internal auditor performed a review that warned the school's disbursement policies and procedures left the school at "significantly increased risk of fraud, waste, and abuse of public education funds. Increased risk of liability to the LEA (local education agency), which could have far-reaching impact on operations and students."

Top state education officials, including State Superintendent of Public Instruction Sydnee Dickson, State Deputy Superintendent Scott Jones of Operations, and Jennifer Lambert, executive director of the Utah State Charter School Board, attended the meeting.

Earlier in the day during a public hearing, parents questioned why they were just notified of the school's financial difficulties. Some even said they could find investors who could help the school through its difficulties.

Students urged school officials to find ways to keep the school open because they have struggled in traditional school. Many students said they were bullied at their previous schools and found acceptance at AISU.

"This is the place nobodies have come and they’ve become some bodies," said eighth grader Lillie Clark.

Trevor Huish, a visual arts teacher who has been at the school since its start, said the faculty is "here for your kids."

Teaching at the school has been "the highest privilege of my life and I appreciate it so much," he said.