False Promises Bring Big Profits?

money-40603_1280The numbers are ringing alarm bells.  I discovered something about charter failure rates and the number of years they were open.  The Center for Media and Democracy’s PR Watch has compiled a state by state list of charter school failures.    Florida has the second largest number of failures (308) next to Arizona.

The cost of failure is high.  CMD reports that the federal government has spent 3.3 billion dollars on charter school development.  The funding is sent to the states to distribute.  Federal auditors estimate that $200 million has been lost due to fraud and waste in the past decade.   In 2011-12, Michigan had 25 charters that were awarded $3.7 million and never opened.  Florida’s case is more dramatic.

In Florida, charters may receive up to $350 thousand before they open.  In 2011, the Florida’s legislature created a new fund with an additional $30 million to expand charters.  The Department of Education used the money to create a partnership with a venture capital group headed by a former KIPP school executive.  There is a lot of money in starting charter schools.

What did the tally of the number of years charters were opened before they closed reveal?  First, a third of the closed charters appear to have never opened!  I knew this happened, but I did not realize how big the problem was.  An additional thirty four schools closed after one year.  Only one-third of these schools remained open for three or more years.  We do not know how much start up money these schools received.  The Florida Department of Education did not keep track.  In a recent post, we reported that in a four year period, over $67 million in federal start up costs in Florida could not be accounted for.  Strange business practice for a state that touts its strong accountability process.

A recent State Board of Education rule now allows districts to do background checks on groups who propose new charters.  It is easy to assume the independent operators are more likely to be inexperienced managers with inadequate financial resources.  They do account for many school failures.  The SBE rule, however, may not go far enough.  Two of the largest charter management firms, Academica and Imagine, had many schools that failed to open.  Given that these firms have substantial resources, one wonders why these schools closed before they opened.  Did these companies also receive large start up funds?  We do not know.  Will some agency in charge of charter accountability take notice?  Who is in charge?

Posted in Charter School Management, Florida, Funding, Reform, State and Local government, US Government.

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