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.

In Florida, the report centered on cozy relationships between the so-called ‘non-profit’ charter school advisory boards and the charter management companies.  Complaints about school lease manipulations and conflict of interest characterize the report.  The League just posted its report on the business practices of CSUSA.  We have carefully documented examples of similar concerns.

The State Educational Agency i.e. the Florida Department of  Education:

‘monitoring tools were limited regarding their review of charter school activities with CMOs and did not include procedures that would reveal weaknesses in the internal control areas that we reviewed in this audit.

Basically, the Florida charter management review procedures pertained only to the charter advisory board and its fiscal reporting process.  Omitted was a review process for relationships between the charter boards and their management companies.  Given that most charter management companies are responsible for at least 95% of the charter school budget, the lack of oversight and reporting requirements does not reveal charter mismanagement.

The extent of possible self interest in real estate dealings between charter boards, management companies, and real estate companies associated with the management company is significant.  In the League’s report, some charter leases and management fees accounted for as much as 40% of a school budget.

Florida is not alone in its lack of oversight of charters.  The report also revealed problems in California, Michigan, New York, Pennsylvania and Texas.  The report is only a drop in the bucket of problems.  It was limited to charters which enrolled a relatively high percentage of Title I eligible students.  The selected geographic areas also included more than one charter management company.  Five Florida charters were selected for review, and all five revealed management weaknesses.  The only other state in which all reviewed charters had weaknesses was Michigan.

The response to the report by the U.S. Department of Education acknowledged that:

…there may be increased risks to federal programs associated with charter schools that are associated with certain management organizations.  These risks may be most acute in those cases where a non-profit charter school contracts with a for-profit management organization that may exert significant control or influence over the day-to-day operations of the charter school and how the Federal funds are used.

Not  only are there risks for federal programs, there are risks for children as well.  In an previous post the League reported that the CAPES study at the University of Florida found that the children in Federally funded charters did no better and in some instances worse academically than similar children in traditional public schools.

How can we penetrate the fog that surrounds the charter industry?  Florida has one current lawsuit regarding fraud and abuse by a for-profit charter management firm.  It has a history of scandals that date back years.  Over and over again, the League has stated that school choice is not a good choice.



Posted in Audits, California, Charter School Management, Department of Education, Facilities, Florida, Funding, Michigan, New York, Pennsylvania, Texas, US Government.

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