The state’s first charter school to win a Blue Ribbon award from the U.S. Department of Education for standardized test achievement soon could lose the fight to keep its doors open.

Fulton Science Academy Middle School’s application to become a state charter special school has been recommended for denial by Georgia's charter schools division out of concerns about FSA's leadership and its $19 million construction debt.

If the state Board of Education follows the recommendation in June when it considers the application, the denial could displace about 500 students, eliminate the jobs of 58 staffers and alter the plans of 455 kids on the school's waiting list.

“I will be disappointed in our state government if this school is allowed to fail,” said FSA parent Gladys McBurrows, who has a son at the school, a Blue Ribbon winner in 2011.

“The school has great administrators, the classes are structured, there is a standard for excellence," McBurrows said.

Georgia charter schools Director Lou Erste said the state has a problem with FSA's financial management, legal accountability and governance, not its academic record. He said he's not sure who's in charge -- the governing board or the executive director.

"Contrary to the law, the governing board does not appear to be autonomous," Erste said.

Erste said his department has been advised that if the state approves the charter, it risks taking on FSA's bond debt if the school defaults on its loan.

FSA entered into a $19 million loan agreement to build a shared campus with Fulton Sunshine Academy and Fulton Science Academy High School, also charter schools.

The schools sought revenue bonds through the Alpharetta Development Authority to build the campus and then began construction without following state protocol for site approval.

Erste said the school also could not account for $6 million of the money it had borrowed.

FSA Executive Director Ali Ozer did not return repeated calls and emails seeking comment but did submit a response to the state Friday documenting construction money spent and saying the governing board was “fully autonomous.”

Late Friday, state officials said FSA’s letter did not change their views or answer their concerns about the school.

Ozer previously said the school was not at risk of defaulting on the loan and that construction had stopped. “The bottom line is we already purchased the property," he said. "We can sell off the property to pay off anything. Everyone will stay in their current building.”

James Drinkard, Alpharetta assistant city administrator, said the city and its taxpayers would not be impacted if the school defaulted on the loan.

"We acted as a pass-through," Drinkard said. “They came to us about wanting to unify their operation into a single campus. Alpharetta is a technological hub. ... We would like to see schools like that flourish within the city.”

Without state approval, however, FSA's charter contract with Fulton County Schools will expire June 30. Fulton rejected the school's charter application in December because it did not meet the district's terms.

Ozer has said parents are satisfied with the management of the school and the success of its students. “We are a national award-winning school and will continue to be. Next year, 100 percent of our students indicated they will come back.”

If FSA shuts down it also could impact the enrollment at its sister elementary school, Fulton Sunshine Academy. Some parents enroll their kids in Fulton Sunshine so they can feed into FSA for middle school.

"It gave us stability to know where our children were going to be from grades k-12,"  said Jim Pittman, who has a daughter at Fulton Sunshine. "They are taking that away from me. Nobody is keeping the students first."