DALLAS -- New questions are being raised about finances at Prime Prep Academy, the troubled charter school co-founded by former football star Deion Sanders.
News 8 has learned the charity that runs the taxpayer-funded charter school has been saddled with a quarter-million-dollar debt incurred before the school even opened.
Our investigations have already prompted a state investigation of Prime Prep Academy. Now, new evidence involves the potential misspending of state funds to repay a debt that is totally unrelated to education.
At issue, whether Prime Prep Academy, the charter school co-founded by Sanders and former business partner D.L. Wallace, is obligated to pay more than a quarter million dollars to Pepsi. The debt was incurred in the summers of 2011 and 2012.
Sanders tells News 8 Wallace contracted with Pepsi to provide lunch to needy children as part of a government summer food service program that had no affiliation with the school. According to a document provided to News 8 by Sanders, Pepsi was owed more than $312,000.
Pepsi said it has only received $50,000 and is still owed $262,000.
According to the agreement with Pepsi, the money must be repaid by Prime Prep Academy's governing body, Uplift Fort Worth CDC. $10,500 per month is owed beginning in January 2014 through October of 2015.
Sanders told News 8 he fears Wallace plans to pay Pepsi from state tax dollars, money that is supposed to go to Prime Prep students.
"The agreement looks like something that pays back Pepsi Co. for an outstanding balance from D.L. Wallace,” Sanders told News 8. "I mean, you are taking school funding to pay back your debts. $262,000 in debts. It's crazy."
The agreement is signed by current finance director Kevin Jefferson on behalf of D.L. Wallace on Nov. 27.
Wallace, who resigned as the head of Prime Prep last month and is no longer affiliated with the school, told News 8 by e-mail Wednesday, "Pepsi has been working directly with the Uplift Fort Worth CDC Board Chairman T. Chris Lewis for several months now and I have not been a part of those conversations."
Lewis told News 8 he is aware of the agreement with the understanding that all of the money would be repaid, not by the academy, but by Wallace himself.
Prime Prep's new leader and CEO Kimberly Carlisle said she was unaware of the agreement, but told us no state money will be used to repay Pepsi. Yet Prime Prep get all of its money from the state.
Pepsi officials will not discuss where any payments are coming from. However, they did issue a statement.
"This arrangement covers previously purchased meals and will allow us to continue with similar types of programs to benefit our community in the future,” said Jeff Dahncke, a Pepsi spokesman.
The Texas Education Agency has not said whether it is aware of the Pepsi debt agreement. But News 8 has learned that the TEA announced Wednesday it is expanding its investigation of Prime Prep.
The TEA is now looking into allegations of failure to provide criminal background checks, failure to serve proper meals, under-qualified teachers, and mis-application of state funds.
TEA investigators will be on the Prime Prep campus reviewing records this Friday.