Florida Charter Schools: Did $67 Million Just Disappear?

This is another post about money and ethics.  This time we consider laws that are made but not are not enforceable.   Let’s start with a Florida Legislature’s 2007 Interim Report on Charter School Accountability.  It reported that Florida law “does not regulate conflict of interest for charter schools board members or employees”…but if nonprofits want tax exempt status, then federal conflict of interest must be observed. The Florida Auditor General uncovered continuing problems and recommended that charter board members be included under Florida’s Code of Ethics as Public Officers.

What has been proposed to curb abuse?  There have been specific recommendations even from the charter industry.  See what they are and figure out why the money disappeared.  (Is this a Common Core question requiring critical thinking and problem solving?  Not really!)

Select Better Charter Operators. This is a bone of contention  Districts must sign contracts with charters; it is a constitutional requirement.  The DOE appeal process, however, overrules districts twice as often as it supports their decisions to deny charter school applications.  Too often, charters that open following a successful appeal, close the following year–with money wasted, children disrupted.  Palm Beach had two of those this year and four other charters closed, two on the first day of school.  Thus far, the district has not been able to reclaim the startup money the charters obtained.  The school board created new regulations to ensure that charters complement rather than compete with traditional public schools. They also filed suit against the State Board of Education for overruling the local district’s denial of a charter school proposal because it was not innovative.

Improve Charter Oversight. The National Association for Charter Schools ranks states’ charter laws (NACS).  This is a pro charter organization.  Florida is weak, by their criteria, on laws for:

• Authorizer and program accountability.  Florida receives the lowest possible score on this topic.  There is a large grey area between the local district’s responsibility to sign contracts and their authority to determine which charter proposals are worthwhile.   Ratings for the districts’ effectiveness in selecting charters are mired in disputes over how to calculate the scores.  Should districts be graded on how many high quality charters they authorize?  If so, shouldn’t they be able to do background checks, financial reviews and academic histories of proposers?  Shouldn’t charters be required to be innovative?  Shouldn’t they have facilities secured months before they open?  Shouldn’t charters supplement district programs rather than compete with them?  The NACS model law analysis states that charter authorization laws identify who can approve charter applications but “say nothing about whether they are funded properly or are held accountable for the quality of their work.”

Florida districts developed Principles and Standards for Quality Charter School Authorizing  that provide guidance.  In addition, a task force hosted by the Florida Consortium of Public Charter  Schools met in September 2014 to discuss district and charter school concerns including updated school performance measures and collaborative efforts to serve high need communities. Selecting good proposals is a start toward ensuring quality. Monitoring their implementation is critical. Districts have little ability to impact charter school operations, even those that violate the law.  Parents with complaints are counseled that they can ‘always leave the school’.  Districts must wait until financial problems become so severe that bills aren’t paid and children’s safety is at risk.  Charters can skate along for years until they receive two failing school grades in a row and are closed.

• Charter governing board stewardship.  Program accountability by NACS standards include requirements in law to enable districts to review and hold accountable, charter governing boards.  How are board members selected? Do they operate in the interest of the students or the owners and management companies?  Do charters meet their contract terms and  follow the law regarding nepotism, conflict of interest, independence from the education management companies, public notice and disclosure laws, student admissions and dismissals?  Who decides whether charter boards operate effectively?  Legislative bills to strengthen oversight have yet to pass.
• Equitable funding.  Florida’s legislature provides the same per student funding for charters and public schools.  Districts, however, may supplement state funding by levying millage from local property taxes or by a referendum.  Most local districts do not share this money with charters.  Districts rely on these funds to pay facility construction costs or to fill unmet instructional needs.  This is a serious issue because Florida ranks near the bottom in per student funding.
• Equitable access to capital funding and facilities.  This argument in Florida is over whether tax payers should be required to pay for charter facilities that are owned privately.  The legislature thus far has reallocated most state resources for district facility maintenance funds to charters rather than to directly divert money to charters from local property taxes.  The facility issue is real.  Charters often must take money from salaries and instructional materials to cover lease payments.  On the other hand, for-profit charter management firms have their own associated real estate companies from which they lease facilities at exorbitant rates.

While ranking states’ charter laws has merit,  the assumptions behind the criteria used for ranking needs scrutiny.  For example, laws that promote charter expansion without caps receive high scores.  Nowhere is there a discussion about the implications of this measure.  Is the assumption that charters should replace public schools?  Is there an analysis of the consequences of such a policy if students no longer can be guaranteed a place in their local school?   Is it telling that funding for oversight of charter authorization receives such a low weight whereas growth of charters has a high weight in the calculation of the overall scores?

Federal State Education Agency (SEA) grants awarded for charter development in Florida reached $67, 644, 267 over four years.  A federal Office of the Inspector General audit could not find the money. The report stated that there was not “a reliable universe of charter schools that received and spent funds”.  The Florida Charter School Division awarded the funds to the charter school startups but had no mechanism to track them.  It is no wonder that charter schools open and close so fast.  Operators can receive up to $300,000 just to open a charter, and there is no way to find the money if they suddenly close.

No doubt that making laws is easier than finding funds to implement them properly.  Reaffirming that the public interest is more important than the financial opportunities for legislators and their supporters cannot be ignored.  Districts need to be empowered to monitor and correct charter mismanagement.  The Commission on Ethics needs some teeth so that it will sting when violations occur in the legislature and other public entities.   The Miami Herald’s series on “Cashing in On Kids” outlines the problem.  It is time to curb for-profit management of schools. Other states have done so.