Charters are the Cheap Choice, not the Best Choice

power-money-trap-5441169Today’s New York Times urges the NAACP to oppose a moratorium on charter schools.  The NAACP does not want to settle for second best.  The Times argues that while some charters are mismanaged, well run charters are a better option for struggling students.  This is a weak argument and one wonders if it is really a political one.  Who benefits?

 

 

 

 

 

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FINALLY! U.S. OIG Issues Charter Management Problems Alert

cash-burningThe U.S. Inspector General has recognized the serious nature of the charter management problems.  The League of Women Voters has been calling for  better transparency and management oversight for several years.  Now, the federal government has joined us—-well, a part of the federal government.

It is one step toward better accountability for our tax dollars.

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The League in Action on For-Profit Charters

by Pat Hall and Sue Legg

money-40603_1280Pat Hall and her League committee have been digging deep.  They want to understand where tax money goes when charters are managed by for-profit companies.  There is gold in those excavations.  Unfortunately, the children are not profiting.  This report is detailed and was given to the League Board.  For those of you with a head for business, it is worth careful scrutiny.  You will see why the League is so concerned about the free wheeling charter industry.  Key points follow.  Read more to really understand the business process.  It is your money, and it is a lot of money, that is not being spent on students.

ANALYSIS OF CHARTER SCHOOL USA REAL ESTATE BUSINESS PRACTICES

 Florida now educates more than 230,000 students at more than 650 publicly funded charter schools.  While many of these schools are providing good educational opportunities, we have found that the fundamental structure of the for-profit management companies, specifically Charter Schools USA, must be questioned.  The following outline summarizes a very detailed report given the LWVF Board this past summer. 

1.      CSUSA has six non-profit school boards that operate 49 schools in 12 urban counties in Florida.  Additionally, CSUSA operates 17 schools in 6 other states.

2.      The six governing school boards cover the 49 charters and are run by CSUSA; they are not independent of the management companies.

3.      Inter related affiliated businesses include Red Apple Development, Ryan Construction Company, the Florida Charter Education Foundation and Connex (curriculum software).  Furthermore, we found over 300 limited liability companies (LLCs) initiated by CSUSA. 

4.      Facilities financing incorporates all aspects of land acquisition, site clearing, construction, bond financing and multimillion dollar lease fees.  CSUSA charges the Hillsborough County School district at one of their four schools more than $30/square foot, significantly higher than downtown Tampa skyscrapers!

5.      Tracking expenditures of taxpayer monies is impossible due to for-profit business practices which are not transparent.

6.      Long term lease agreements, after flipping (changing deeds from one related company to the next) from Ryan Construction to Red Apple Development, are charged out 40 years, and charge rent and interest amounts on top of the lease payments.  Most CSUSA lease fees in Hillsborough County take 25% of all taxpayer dollars designated for educating children.  Some are even higher.

7.      Another 13% to 15% is charged by CSUSA for management fees, hence 40% of public money is not spent instructing children.  State auditors have questioned how these costs are reported.

8.      Evidence exists of real estate “flipping” by CSUSA in Hillsborough County.  This results in new real estate appraisals to increase value.  Lease and rent costs use these values to justify cost charged to charter budgets.

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Lake County Rejects New CSUSA Charter

curriculum plate-413157_1280NOTE: FROM KAREN WEST:  I served on the charter review committee as the “community member” for the second year.  Our strategy was to highlight all the weaknesses in the CSUSA proposal when we presented it to the Lake Cty. School Board in a workshop Sept. 19.  However, we did recommend approval of the application – with strong reservations – knowing that a rejection would then be handled by the appeals committee in Tallahassee which is heavily populated with friends of charter schools.

This vote by 4 of the 5 school board members was a surprise and delight to me!  It may have an impact of the selection of the new superintendent of schools, which will take place after the election of two new school board members.  As a representative of LWVTRI, I serve on that advisory board as well.

Many thanks to Sue M. Legg – chair of the LWVFL Education Committee for providing strong factual information about charter school companies and their financial dealings.

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Charters: Deregulation has gone too far!

business-257880_1280In a new brief, William Mathis, head of the National Education Policy Center, argues that market based accountability for charter schools just does not work.  At first glance, Florida’s policies are better than in some states.  There are, however, some fatal flaws.

He makes the case for better oversight and regulation.  His recommendations take a national perspective and include these general process requirements:

authorizers, those who approve charter contracts, control the criteria for granting charters and the length of time charters are in effect.  Authorizers (in Florida, are the local school boards) must also specify the accountability mechanism for charters, and the state should fund oversight. 

The basic difference between Florida’s policy and this recommendation is that in Florida, districts are the authorizer of charters, but they have little control over the criteria charters must meet and little access to information about charter fiscal policies and practices.  The State legislature defines criteria for granting charters which are so broad that districts are not able to designate which charters are needed and actually are innovative.

The Florida Department of Education and the State Board of Education hold the reins of power.  Thus, oversight is by design, minimal.  No one ‘close to the store’ is watching what is going on behind the scenes.  Even many charter school oversight boards have little knowledge of school practices.  The press and whistleblowers ferret out problems that fester.

The brief also addresses operational policies i.e.:

Governance including budget, admissions procedures, discipline practices, and civil rights protection should be transparent.  Annual reports and audits must be publically available and facilities must meet building codes and inspections.  Staff background checks should be required.

Again, these recommendations, on the surface, are mostly met in Florida’s charter school policies.  Annual audits are  required.  Admission lotteries for vacant seats are mandated.  Monthly budget reports are available.  What is missing?  Basically two loopholes, aa mile wide, exist.  The first problem is that there is no corrective action for fiscal mismanagement that does not reach a crisis level or for lapses in operations that impact which students enroll, retention of teachers, or suspension or dismissal of students.

The second problem is the lack of transparency that for-profit charter management firms enjoy.  Budgets of their charter schools lack the detail of where and how money is spent.  These companies control the entire budget, but financial records of for-profit privately run companies are shielded from public view.  Thus, the public has access to charter school facility costs, for example, but no access to how these costs are generated.  In some cases, it is like giving a blank check that may be nearly half of the budget without explanation of where the money ended up.

The one consolation in all of the exposure of charter mismanagement is that it is now becoming part of the public discussion about school choice.  Privitizing schools may give the appearance of facilitating innovation, but the reality is too often that it results in the loss of public trust.

Leaky Roofs: Time to Pay the Piper?

hands-982121_1280When the roof leaks, you patch it until you can’t anymore.  When the air conditioning goes out, the kids go home.  This is not really about school choice and who gets the money: charters or regular schools. This time there is no choice.  Since the millage for school maintenance was cut in 2008, districts have been making do.  Eight years later, buildings are in disrepair, and a crisis is looming across the state.   Counties have lost hundreds of millions of dollars in facility maintenance money.  The time has come for a reckoning according to this report.  How can we pay for this?

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Charters are Lopsided in Whom They Serve

directory-281476_1280Hernando and Hillsborough charters have the lowest ratios of low income and minority students.  In Pasco county, 58.2% of students in traditional public schools qualify for Free and Reduced Lunch while only 36.2% of charter students qualify.  Charters in high income areas do well academically, charters with higher percentages of low income students receive lower school grades.  This is not a surprise.  Income and academic achievement are known to go together.  What is of concern John Romano columnist for the Tampa Bay Times article is:

 

 

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