Report Decries Unregulated Charters: Arne Duncan Should Crack Down

Earlier this week Charter School Vulnerabilities to Waste, Fraud, and Abuse was released jointly by the Center for Popular Democracy and Integrity in Education.  In an age when charter schools are regulated in state law, we are likely to read stories in our local papers about fraud or academic malpractice at a charter school nearby.  This is the first report I’ve read that details widespread abuse of the public interest by charter schools in 15 states: Arizona, California, Colorado, Washington, D.C., Florida, Hawaii, Illinois, Louisiana, Minnesota, New Jersey, New York, Ohio, Pennsylvania, Texas and Wisconsin.

The report’s authors explain, “Charter enrollment has doubled three times since 2000; it doubled from 2000 to 2004, and again from 2004 to 2008, and again from 2008 to 2014.” The report highlights a memorandum from the U.S. Department of Education’s Office of Inspector General that warned the Department itself, “of our concern about vulnerabilities in the oversight of charter schools.”  The Department’s Office of Inspector General “specifically highlights the problem of ‘fraud perpetrated by charter school officials, and internal control weaknesses in the Department’s oversight processes.'”

This week’s report identifies six categories of fraud and mismanagement the authors documented through news reports and criminal complaints: charter operators using public funds illegally for personal gain; charter operators using school revenue illegally to support other businesses owned by the charter operators; schools putting children in actual or potential danger (by failing to screen staff or providing dangerous building conditions); charter schools billing states for services they claim to be providing but are not in fact providing; charters inflating enrollment and billing states for children who are not attending the school; and charter operators mismanaging public funds.  (This blog recently reported two examples of charter school operators or board members profiting when charter school dollars were spent at their privately held, for-profit companies that provide services for the charter schools they operate in Milwaukee and in Ohio.)

The report concludes with two pages of excellent recommendations for fiscal and academic safeguards that states should implement:  establish a charter regulatory agency; ensure transparency in the operation of the schools and their boards; and require charter school boards to be elected, be independent of the schools they oversee, and be legally liable for fraud and malfeasance at the schools they oversee.

The recommendations are excellent, but I fear it will be difficult to get them passed by many state legislatures.  In Cleveland, Ohio, where I live, Mayor Frank Jackson recently made the establishment of a Cleveland Transformation Alliance the centerpiece of a school “reform” plan.  Jackson envisioned that the Transformation Alliance would review charter school applications in Cleveland and provide a layer of oversight now absent in Ohio, where sponsors of charter schools seeking to open in Cleveland may be far away in Cincinnati or Mansfield or Toledo.  Mayor Jackson’s plan had to be passed legislatively in the state capitol, but twice the enforcement teeth Cleveland’s mayor had included in the proposed legislation were removed by legislators beholden to political contributors who prefer that charters not be regulated.  Legislators have persistently blocked the regulatory capacity of this supposed oversight commission.

I am glad to see this new report quoting the U.S. Department of Education’s Office of Inspector General.  The U.S. Department of Education should immediately  eliminate what its own Office of Inspector General calls, “internal control weaknesses in the Department’s oversight processes.” Charter school expansion across the nation was spurred in 2009 by the U.S. Department of Education’s own requirement that states remove caps on the authorization of new charter schools as a condition of becoming eligible to apply for funds in Secretary Arne Duncan’s competitive Race to the Top grant program.  At the very least, Duncan—who made removal of state caps on charter schools a requirement for federal education grant applications—should now make careful regulation of charter schools a new requirement for states to be able to apply for any of the U.S. Department of Education’s grant competitions like Race to the Top, School Improvement Grants, and Innovation Grants.

Duncan is a savvy politician who is surely well aware that the money of special interests in state politics is likely to interfere with effective state-by-state oversight and regulation of charter schools. At a meeting I attended with Secretary Duncan in June 2010, he said, “Good charter schools are part of the solution; bad charter schools are part of the problem.” It is Duncan’s primary responsibility to regulate the fraud and abuse that have grown with the rapid expansion of charter schools, an expansion encouraged by his policies.



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