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Two for-profit companies vying to tap into public education funding streams and enroll thousands of North Carolina children into virtual charter schools will be in front of a state education committee tomorrow.

K12 logoA special committee designated by the State Board of Education to review virtual charter school applications will meet from 10:30 a.m. to 1 p.m. Wednesday on the seventh floor of the state Education Building, 301 N. Wilmington Street in Raleigh. Audio of the meeting, which is open to the public, will also be steamed here.

The full State Board of Education, responding to the state legislature’s creation of a pilot program for virtual charter schools, will meet in  January to decide if the online schools can enroll students – and receive public funding – for the 2015-16 school year.

Virtual charter schools teach students from kindergarten through high school through classes delivered through children’s home computers. Parents or guardians often serve as “learning coaches” to assist with lessons while teachers remotely monitor students’ attendance and performance.

North Carolina’s legislature opened the door for two virtual charter schools to open next August when it tucked a provision in this summer’s budget bill that created a four-year pilot program for two online-based charter schools to open by August 2015.

The country’s virtual education market happens to be dominated by two companies, K12, Inc. (NYSE:LRN) and Connections Academy, a subsidiary of Pearson, an educational publishing company also traded on Wall Street (NYSE: PSO). Both companies employed lobbyists in North Carolina last year.

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A group of charter schools in the Southeastern part of the state will face disciplinary action if they don’t soon provide the salaries of school personnel hired by a private contractor to work in the schools.

The State Board of Education voted Thursday to place the four schools run by Charter Day Schools, Inc. – Charter Day School in Leland, Columbus Charter School in Whiteville, South Brunswick High School in Southport and Douglass Academy in Wilmington – under financial noncompliance.

The designation means that the charter school group will have 10 business days to comply with the request for information. After those ten days, the schools will be held under a financial disciplinary status, and will have another 10 days before any fines or sanctions go into effect.

The state board would decide what sanctions to take against the charter schools, and could decide to levy fines against the schools, freeze public funding or seek revocation of the charter schools ability to operate in the state, said Alexis Schauss, the school business division at the N.C. Department of Public Instruction.

Roger Bacon Academies, the company owned by conservative charter school founder Baker Mitchell Jr., has received millions in public funds as part of the company’s exclusive contracts to run four Wilmington-area charter schools.

Nearly 2,000 students enrolled at the four tuition-free schools this year, which draw down federal, state and local education funds. Mitchell also owns a company that leases land and school supplies to the public charter schools. Close to $9 million has gone to Mitchell’s companies over the last two years, according to the Wilmington Star-News.

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The standoff between Baker Mitchell Jr, whose company runs four Wilmington-area charter schools, and North Carolina’s education agency is continuing.

Baker Mitchell of Roger Bacon Adademies, with students.

Baker Mitchell of Roger Bacon Adademies, with students.

The state has demanded – but has yet to receive– details from Charter Day Schools, Inc. about the salaries paid out to Roger Bacon Academy employees who work in the four public charter schools run by the company.

Owned by Mitchell, Roger Bacon Academy has exclusive contracts to manage and run four schools in Southeastern North Carolina — Charter Day School in Leland, Columbus Charter School in Whiteville, South Brunswick School in Bolivia and Douglass Academy in Wilmington.

The board chair of the non-profit in charge of the schools recently claimed that the private company owned by Mitchell won’t give the salary information to the schools’ board of directors.

John Ferrante, a Wilmington lawyer and chair of the non-profit Charter Day Schools, Inc., told Phillip Price of the N.C. Department of Public Instruction last week that the non-profit board of directors can’t get detailed salary information of headmasters and assistant headmasters from Roger Bacon Academy.

Price, DPI’s chief financial officer, summarized his Oct. 17 conversation with Ferrante in an email to State Board of Education Chair Bill Cobey and several DPI employees. N.C. Policy Watch received a copy of that email through a standing public records request it has with DPI.

“He [Ferrante] indicated that he had requested that information and they had responded that it was confidential and not available,” wrote Price in the Oct. 17 email. “Mr. Ferrante was concerned that his schools would be punished for something that was out of their control (and parents were expressing concern).”

The Charter Day Schools, Inc. board of directors governs the four charter schools –– and has the ability to hire and fire Roger Bacon Academy, Mitchell’s private company. Mitchell also owns another company that leases land and buildings to the charter school group.

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Buried deep in a House technical corrections bill unveiled yesterday is a provision to allow staff of for-profit charter school management groups to serve on the boards of the public charters schools that contract with them.

The N.C. House of Representatives is expected to vote on the 55-page technical corrections bill today. The legislation would also have to gain approval in the Senate. (UPDATE: The House voted and passed the bill Friday, and it is now headed to the Senate.)

Baker Mitchell of Roger Bacon Adademies

Baker Mitchell of Roger Bacon Academy, Inc. (Photo by Sarah Ovaska)

The technical corrections bill unveiled Thursday is supposed to be way for lawmakers to tweak laws but it often becomes an under-the-radar way to push through controversial changes and “asks” from powerful lobbying groups.

The one-sentence addition to charter school rules would prohibit the State Board of Education from dictating who can and can’t sit on the board of the publicly-funded charter schools.

That issue popped up last year when the N.C. Department of Public Instruction told a politically-connected charter school operator he couldn’t sit on the board of the school he works for.

“The State Board of Education shall no impose any terms and conditions that restrict membership of the board of directors of the nonprofit corporation operating the charter school, but shall require the board of directors to adopt a conflict of interest policy,” the new language in the technical corrections bill states. (Click here to view the corrections bill, charter school language on page 39.)

Baker Mitchell, who founded Charter Day School in Brunswick County, owns an education management company called Roger Bacon Academy that is contracted to run four charter schools in the southeastern part of the state.  Last year, the State Board of Education told Mitchell that neither he nor other Roger Bacon staff could be voting board members of the charter schools, a decision that bothered both Mitchell and the charter school board members.

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UPDATE: State board members voted to not renew the charters for PACE Academy and Coastal Academy, meaning the schools will close at the end of the school year. The board’s decision can be appealed to an administrative court.

The State Board of Education decided today to not renew support for  today whether a handful of charter schools up for renewal should continue to operate, including charter schools in Carrboro and Morehead City that have been flagged by state education staff as problematic.

Staff from Office of Charter Schools are recommending that the state board terminate charters held by the Coastal Academy for Technology and Science (formerly known as Cape Lookout Marine Science High School) in Morehead City and PACE Academy in Carrboro.

“Both schools had patterns of noncompliance, low academic performance, and concerns related to the financial sustainability of each school,” DPI staff wrote in materials provided to state board members. “The nonrenewal votes of the CSAB were unanimous in both instances.”

The state board is expected to make its decision later this morning. (UPDATE: The state board voted late Thursday morning to not renew the school’s contracts.)

To find out what happens, you can listen to audio of the meeting here, read public documents about the renewal process here  or follow N.C. Policy Watch education reporter Lindsay Wagner, who is at the meeting, on Twitter here.

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