A Call For More Financial Accountability From Charter Schools

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The National Education Policy Center just published a research brief, The Business of Charter Schooling: Understanding the Policies that Charter Operators Use for Financial Benefit. The word "brief" is probably misleading, since this detailed, informative work is 56 pages long. The two college education profs who wrote it, Bruce Baker of Rutgers University and Gary Miron of Western Michigan University, have created an important resource for anyone who wants to learn the intricacies of charter schools funding and the underreported ways they spend their money.

The brief isn't about the educational quality of charters, which, like district schools, varies from excellent to poor. It's about the lack of transparency in the use of government funds whose purpose is to set up and run the schools and the potential for people and organizations to abuse the system for personal gain.

As the authors explain, the way charters use state funding isn't accounted for in sufficient detail. In Arizona, the financial reports submitted to the state are general to the point of being close to useless, unlike school districts which have to account for their expenditures in detail, and the same is true in most other states. Lots of charter schools use Educational Management Organizations (EMOs) extensively, sending them as much as 90 percent of the money they get from the state. Sometimes the EMOs run nearly every aspect of the schools, but we don't know how they spend the money because they don't have any responsibility to publicly account for their finances. Charter boards often have a too-close-for-comfort relationship with the EMOs and with companies that sell supplies and services to the schools, making for inevitable conflicts of interest. And the way charter buildings are purchased or leased can mean some people or corporations siphon off a whole lot of money to pay for the buildings which is supposed to be used for the students' educations.

The brief lists eight recommendations to improve the situation. which mainly come down to increasing financial transparency and accountability of charters. Large purchases as well as contracts with EMOs should be carefully reviewed, financial reporting to the state should be more detailed and precise, the board members and staff should be at arms length from the EMOs and contractors to minimize the possibilities of misappropriation of funds, etc.

Over the years, I've written a lot about charter school operators, EMOs and property management corporations that have misused state funds, often illegally, though in some cases the misuse of funds is perfectly legal, which is part of the problem. There are plenty of well documented horror stories out there, meaning there's a whole lot more waiting to be uncovered. Charter school supporters as well as skeptics should work to put in safeguards against the bad guys who go into the education business for the wrong reasons.

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