Hats off to the Charlotte Observer’s Andrew Dunn, who published a series of stories this weekend about how for-profit education management organizations that operate charter schools in North Carolina are allowed to keep secret, to some extent, how they spend taxpayer dollars — and how that reality can ultimately contribute to the abuse of public money.
Six private charter school management firms currently oversee millions in state dollars for public education in North Carolina.
The structure of these schools has benefits. The financial backing a company provides offers stability, and management organizations bring refined curriculums and training programs, said Eddie Goodall, executive director of the Charlotte-based North Carolina Public Charter Schools Association. They also often have strong records of academic performance.
But other states with longer charter school track records have had problems. In many cases, the lack of transparency at their management companies has made it more difficult to detect issues. Among the examples:
- The founder of Bay City Academy in Michigan was convicted of three counts last month related to tax fraud for shuffling money intended for the charter school through his management business and personal accounts to avoid taxes.
- A charter school in Washington, D.C., had its charter revoked in Februaryafter authorities accused it of improperly shifting public money to the management company. D.C. charter school officials said they had a hard time obtaining financial records from the company. Earlier, D.C. officials had accused another management company of receiving exorbitantly high prices for services at several charter schools.
- In New York, the Office of the State Comptroller sought to get informationfrom National Heritage Academies after saying state officials couldn’t determine how $10 million in taxpayer money was being used. The company refused to provide full financial reports. New York no longer allows new charter schools to contract with for-profit companies.
“Transparency is a serious issue,” said Gary Miron, a professor at Western Michigan University who has studied charter schools extensively. In Michigan, nearly 80 percent of charter schools are run by for-profit management companies. “Transparency laws would help, but they must invade the proprietary space of (management companies) because of the public need to know.”
Dunn also highlights six management companies’ disclosure practices, management fees and executive pay rates in his story.
Next year, for example, Cabarrus Charter School will for over $800,000+ in taxpayer dollars in management fees to its parent company, Charter Schools USA.
Last week, Governor Pat McCrory and Charter Schools USA CEO Jonathan Hage toured one of the company’s three charter schools, Cardinal Charter Academy in Cary. Senator Jerry Tillman is sponsoring a bill this year that would make it easier for national for-profit charter school management organizations to expand their presence in the state going forward.
Click below to read all of Dunn’s stories on for-profit charter school management firms.