Bombshell Report Exposes Federal Failure to Oversee Charters

I was once in a meeting where Education Secretary Arne Duncan declared: “Good charters are part of the solution. Bad charters are part of the problem.” Unfortunately, Secretary Duncan has done nothing to increase federal oversight for the purpose of addressing what he called “the problem.”  A new report from the Center for Media and Democracy, Charter School Black Hole, exposes the U.S. Department of Education’s total abrogation of responsibility for oversight of an education sector to which it has granted $3.7 billion since 1995. The federal Charter School Program (CSP) awards grants to state departments of education to encourage charter school expansion.

Who’s in charge?  Really nobody: “The system insulates each element from accountability for what actually happens in charters.” The federal government has relinquished oversight to the states receiving federal grants, states which have then turned over regulation to  charter school authorizers in what the Center for Media and Democracy calls, “a classic example of ‘industry capture’ of the agencies charged with oversight by the industry they are tasked with overseeing.” “This is due in part to the way laws governing charters have been built by proponents, favoring ‘flexibility’ over rules…  Charters are policed—if they are policed much at all—mainly by charter proponents….”  “Theoretically, the charters are held ‘accountable’ to charter authorizers.  However, enforcement of standards by charter authorizers appears lax in many instances, and states have said they lack legal authority under statutes that created the charter option to demand compliance.”  “As a consequence, the public does not know how much federal seed money each charter has received and does not know how it has really been spent…” “Unlike truly public schools, which have to account for prospective and past spending in public budgets provided to democratically elected school boards, charter spending is largely a black hole.”

The Center for Media and Democracy gathered the information in the report through a series of formal Freedom of Information Act (FOIA) requests to the U.S. Department of Education as well as requests to the state education offices (SEAs) that administer federal Charter School Program (CSP) grants.  First CMD asked the U.S. Department of Education for a list of all charter schools that have received money under the Charter School Program. Only after repeated requests and many months did the Department of Education comply: “Finally, in late summer, the agency gave CMD a list of charter schools that had received CSP SEA money in recent years.  But, due to the poor quality of the format, CMD had to manually transcribe the list.”

CMD explains that the application process for federal charter school funding has never been public; hearings are neither held to share who is making the federal proposal nor to examine what is being proposed.  No one has the opportunity to testify publicly on the quality of the application being made by a state agency or a charter management company before the federal grant application is submitted or the grant awarded. “Without calling for broader public input, federal charter school bureaucrats accepted the word of state charter proponents that their charter programs had adequate controls for performance and against fraud and waste.”  “In the current structure, the U.S. Department of Education hears only from proponents of the charter school grant application and in this closed loop—unsurprisingly—it approves money to a state like Ohio based on formal submissions that praise it, in spite of numerous failures.”

The Center for Media and Democracy examines the role of federal Charter School Program grants in eleven states plus the District of Columbia: California, Indiana, Michigan, Ohio, New York, Texas, Utah, Arizona, Colorado, Florida, and Wisconsin.  In coming weeks this blog will return to the information in the state reports.  Here is just one example— a taste of what CMD discovered as it surfaced information about poor oversight of federal charter school grants in Michigan: “(C)harter schools in Michigan received $34,997,658 between 2010-15 under the CSP (federal Charter School Program) umbrella, after the state was awarded $43.9 million under the CSP expansion in 2010.  (This discrepancy is based on appropriations amounts and cycles and other differentials.)  Almost half (139) of the charters in Michigan were subsidized in part by federal tax dollars, in the past five years… Since the inception of charters in the state (back into the 1990s), more than 100 charters have closed (108).  Many of them have closed due to lack of ‘academic viability’ (poor results) while others have closed due to lack of ‘financial viability’ (such as inadequate enrollment) and some for both or other failings… Another area of concern is that four out of every five Michigan charter schools are really being run by for-profit management companies…. Perhaps one of the most surprising takeaways from the federal information available about how taxpayer money is being spent or wasted is the existence of ‘ghost’ schools that never opened.  Out of the charters that were approved for CSP funds by the Michigan Department of Education in 2011 and 2012, twenty-five never opened…  The organizations behind these proposed charter schools were approved for a total of nearly $3.7 million in federal tax funds in ‘pre-planning’ and ‘planning grants…”

Ohio is another of the states covered in the report: “Ohio has been awarded a substantial amount in federal CSP SEA grants: more than $195 million between 2004 and 2015.”  At the end of September 2015—in grants awarded for 2016 or over the upcoming five years—the U.S. Department of Education awarded over $157 million to seven states, the District of Columbia, and eleven charter school projects across the country for the expansion of charter schools.  Ohio was granted the most of any state—$71 million—even as the state was locked in a political battle about establishing even the most minimal oversight of charter schools.  (Subsequent to the receipt of the federal grant, the Ohio legislature did pass a modest bill to begin correcting some of the most egregious problems in the states out-of-control charter sector.)  Aware of the state’s unregulated charter schools, in July of 2015, Ohio Senator Sherrod Brown introduced a bill for federal regulation of charter schools; some of the proposed bill’s provisions were folded into the Senate’s proposal for the reauthorization of the federal education law.  (Very different Senate and House versions of a reauthorization of the No Child Left Behind Act have passed, but a joint version has not yet emerged from a conference committee.)

And last week Senator Brown stepped up again to provide leadership by demanding federal oversight.  Senator Brown joined Ohio Representative Tim Ryan to introduce a bicameral Congressional bill to regulate charters  through increased “accountablity, transparency, and community involvement.” The legislation would impose Congressional oversight over a process that until now has been hidden inside the Department of Education.  The proposed Charter School Accountability Act would require independent financial audits of charter schools and reports on each school’s program, mission, school discipline policy, student attrition rates, staff turnover, and data reflecting admission and recruitment policies and student retention.  The proposed bill would require states applying for federal grants to set charter school performance standards and to collect data on school closures and performance reviews.  It would also require state legislatures to establish state “authority to suspend or revoke a charter schools’ s authorization based on poor performance or violating policies,” and it would demand that states establish regulations to prevent conflicts of interest and implement fiduciary policies for charter school boards, treasurers, and staff.  The bill would also require states to seek parental and community involvement as charter schools are planned.

The new report from the Center for Media and Democracy confirms the pressing need for the kind of federal oversight proposed by Senator Brown and Representative Ryan. The federal government’s protracted failure to oversee it’s $3.7 billion investment in charter schools has been among the most egregious problems in Arne Duncan’s Department of Education.  While Duncan has been in charge for seven years as Secretary of Education, he has made no attempt to regulate charter schools; his clear priority has been innovation rather than oversight.  This blog has covered Duncan’s failure to establish adequate regulation of the out-of-control charter sector here, here, here, and here.

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