Lack of Oversight of Federal Charter Schools Program Cheats Taxpayers, Students, Families, and Local Public Schools

The impact of federal investment in the Charter Schools Program has been in the news this month thanks to the Network for Public Education’s stunning new report, Asleep at the Wheel, which exposes the number of schools across the states that received millions of dollars from the U.S. Department of Education’s Charter Schools Program but never opened or, after opening, subsequently shut down.  The Network for Public Education (NPE) documents the waste of hundreds of millions of dollars out of the total $4 billion that has been spent on the Charter Schools Program (CSP), which has been operated with an outrageous absence of oversight. A third of the schools whose startup or expansion was seeded by the CSP are currently not in operation.

Last week the Network for Public Education expanded its coverage of abuses in the Charter Schools Program by breaking down the numbers to show how much money was wasted in five of the states. (NPE says it will continue to break down the numbers in upcoming weeks for the rest of the 44 states and the District of Columbia which have charter schools.)  Jeff Bryant follows up this week by summarizing the percentage of failure in CSP-funded schools in the five target states. In Michigan, 42 percent of the federal dollars granted by CSP were wasted on schools that never opened or subsequently closed. The percentage of failure was similar in Ohio (40 percent), Louisiana (46 percent), California (38 percent), and Florida (36 percent).

Responding to the Network for Public Education’s report, charter school promoter Nina Rees justifies the federal Charter Schools Program as a crucial source of venture capital to jump start and expand a privately operated but publicly funded education sector.  Chalkbeat’s Matt Barnum shares Rees’ assessment: “Nina Rees, the president of the National Alliance for Public Charter Schools, said federal grants are a crucial source of funding for start-up schools and that closures of ineffective schools are signs that the charter model is working.”

Barnum adds that right at the end of March, the U.S. Department of Education announced another category of new five-year grants, this time to the giant Charter School Management Organizations (CMOs).  The list posted on the Department of Education’s website includes several of the usual subjects. KIPP schools will receive $86,311,042 over the next five years to add what Barnum reports are 52 new schools.  IDEA, a charter chain in Texas, Louisiana and Florida, will receive $116,755,848 over five years to double its size.  Barnum  explains: “IDEA is the other big winner, getting what appears to be the largest award ever directly given to a charter network through the federal program…Like KIPP, IDEA takes a strict approach to student behavior—even emblazoning the phrase ‘no excuses’ on students’ uniforms. Chalkbeat has previously reported that the network has a high attrition rate—at one point, a third of students were gone within four years—and serves far fewer students with disabilities than the state of Texas as a whole.”

In the next five years, New York City’s Success Academy Charter Schools will also receive a federal Charter Schools Program grant—$9,842,050. The award comes at the same time Chalkbeat reports that Success Academies was sued again this week by a family alleging that their child was on one of Success Academies’ much reported “got to go lists.”  It has long been reported that when students are a particularly poor fit or students are especially disruptive, Success Academies repeatedly suspends or punishes the students until despairing parents withdraw the students from the schools.

In his report on the federal grants to the big Charter Management Organizations, Barnum wonders if the size of these grants may fuel what appears to be a growing backlash against the expansion of charter schools: “The grants… underscore the substantial role the federal government plays in helping charter schools expand. But they come at a perilous time politically for the charter school movement, which has seen its growth and popularity ebb in recent years. These networks’ plans for rapid growth might both run into—and fuel—political opposition, particularly in places where that growth will strain school districts’ finances.”

The effect of charter school expansion is a serious threat to the finances of traditional public school districts. When students leave a public school system to attend a charter school they carry away money from the school district’s budget. There are charter promoters who allege that, because the exiting students no longer require the services public school districts are providing, the fiscal impact is neutral.  However, the political economist, Gordon Lafer counters this argument forcefully in a report published a year ago by In the Public Interest: “To the casual observer, it may not be obvious why charter schools should create any net costs at all for their home districts. To grasp why they do, it is necessary to understand the structural differences between the challenge of operating a single school—or even a local chain of schools—and that of a district-wide system operating tens or hundreds of schools and charged with the legal responsibility to serve all students in the community.  When a new charter school opens, it typically fills its classrooms by drawing students away from existing schools in the district. By California state law, school funding is based on student attendance; when a student moves from a traditional public school to a charter school, her pro-rated share of school funding follows her to the new school. Thus, the expansion of charter schools necessarily entails lost funding for traditional public schools and school districts. If schools and district offices could simply reduce their own expenses in proportion to the lost revenue, there would be no fiscal shortfall. Unfortunately this is not the case.”

Lafer continues, detailing the costs public school districts cannot immediately cut when students leave for charter schools: “If, for instance, a given school loses five percent of its student body—and that loss is spread across multiple grade levels, the school may be unable to lay off even a single teacher… Plus, the costs of maintaining school buildings cannot be reduced…. Unless the enrollment falloff is so steep as to force school closures, the expense of heating and cooling schools, running cafeterias, maintaining digital and wireless technologies, and paving parking lots—all of this is unchanged by modest declines in enrollment. In addition, both individual schools and school districts bear significant administrative responsibilities that cannot be cut in response to falling enrollment. These include planning bus routes and operating transportation systems; developing and auditing budgets; managing teacher training and employee benefits; applying for grants and certifying compliance with federal and state regulations; and the everyday work of principals, librarians and guidance counselors.” “If a school district anywhere in the country—in the absence of charter schools—announced that it wanted to create a second system-within-a-system, with a new set of schools whose number, size, specialization, budget, and geographic locations would not be coordinated with the existing school system, we would regard this as the poster child of government inefficiency and a waste of tax dollars. But this is indeed how the charter school system functions.”

Finally, of course, one must consider the students whose educational needs are abandoned when a charter school abruptly closes. Writing about the individual schools which received money under State Education Agency grants—the schools covered in NPE’s new Asleep at the Wheel report, Jeff Bryant explains: “With every new charter school that said it would open and didn’t, or opened and then quickly closed, there were families and kids who fell for the marketing pitch and ran after promises of new and better educational opportunities that turned out to be a mirage. In a California community, one of the schools that received a $600,000 grant, Iftin University Prep High School in San Diego, closed mid-year, abandoning the remaining students and disbanding the senior class, who then had to find other schools to complete their high school diplomas… In Michigan, a Detroit charter school, University Yes Academy, that received an $830,000 CSP grant, promised high school students academic courses and school programs it never delivered. The school had five principals in three years.  An audit of the school could not account for $300,000 of Title I funds. After the money went missing, the school switched to a different management firm run by the same person. Then the school’s contract was transferred to a third management firm, which closed the school a week before classes were to start, leaving students and families stranded and high school seniors uncertain of how they would graduate….”

4 thoughts on “Lack of Oversight of Federal Charter Schools Program Cheats Taxpayers, Students, Families, and Local Public Schools

  1. From the report…
    “Of the schools awarded grants directly from the department between 2009 and 2016, nearly one in four either never opened or shut its doors. The CSP’s own analysis from 2006-2014 of its direct and state pass- through funded programs found that nearly one out of three awardees were not currently in operation by the end of 2015.”

    “Nina Rees, the president of the National Alliance for Public Charter Schools, said federal grants are a crucial source of funding for start-up schools and that closures of ineffective schools are signs that the charter model is working.”

    “Working” might be appropriate language if we were talking about a factory making car parts. I wonder if Ms. Rees would consider the system “working” if her son/daughter were in a school which closed mid-year and tossed several hundred kids back into their “home” schools.

    There is a kind of tragic irony in the realization that proponents free enterprise, small government ideology have created and supported the use of federal tax dollars as a source of venture funding, while also asserting that the regulation of those receiving such funding are beyond the reach of the federal government. It appears that the unregulated handouts could reach that far, just not oversight and protection of children and their families.

  2. Ms. Resseger, I am a student at Stark State Community College in Akron. I am doing a research essay on corruption in the charter school system. I have a question if I may ask? With the millions lost in public school funding. Is the systemic corruption leading to the eventual downfall of the Charter School system?

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