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.

Reports Add Up to Show Charter Fraud, Charter Failure, and Incapacity to Realize What Was Promised

In a new blog post Gene V. Glass, who, earlier this year with David Berliner published the excellent 50 Myths & Lies That Threaten America’s Public Schools, recently posted, Are Charter Schools Greenhouses for Innovation and Creativity?  Glass declares: “The rationale for the charter school movement went something like this: ‘Public education is being crushed by bureaucratic regulation and strangled by teacher unions.  There is no room left for creative innovation; and tired, old traditional educators have run out of energy and ideas.  Let free choice reign!’ It sounded good, especially to people who were clueless about how schools actually run.  How have things actually worked out?  What new, revolutionary ideas have come out of the charter school movement that can teach us all about how to better educate the nation’s children?”  Glass describes the conclusion in his and Berliner’s new book: “that in our opinion the vast majority of charter schools were underperforming traditional K-12 public schools and that the charter school industry was shot through with fraud and mismanagement.”  You’ll have to check out his blog post to read the story of his confrontation with two young charter teachers who recently tried to prove to him that their school was more innovative than the surrounding public school district only to learn that the International Baccalaureate program their charter had just launched was introduced ten years ago and continues to be offered in the public schools.  Berliner’s critique of charters comes among a recent rash of news reports about the woes of the charter sector.

This blog just covered Robin Lake’s despairing critique of the charter school catastrophe in Detroit.  “No one in Detroit is responsible for ensuring that all neighborhoods and students have high-quality options or that parents have the information and resources they need to choose a school.  ‘It’s a free-for-all,’ one observer said. ‘We have all these crummy schools around, and nobody can figure out how to get quality back under control…’”  Lake is the executive director of the Center on Reinventing Public Education which has made the promotion of “portfolio school reform” (in which the portfolio contains a mix of public and charter schools from which parents can choose) its primary mission.  Her recent piece  suggests that she, a central promoter of charter schools, has no idea how to rein in school choice gone wild in Detroit.

Like Michigan, Texas is struggling to regulate the quality of its charter schools. The NY Times reports that one charter school district, the Honors Academy Charter chain, is currently operating seven schools even though Honors Academy Charters were formally closed under a 2013 law due to poor performance.  “Well into the new school year, all seven Honors Academy schools, which enroll a total of almost 700 students in Central Texas and the Dallas-Fort Worth area, are still open,” despite that the district has lost its contract and its accreditation.  Although, “The state ordered the charter operator to turn over student records and its remaining state funds, and to find alternatives for its students,” “Honors Academy officials… decided to open their doors anyway.  They have argued that the provision forcing closure is unconstitutional.” Costs are being covered by $3.5 million left over from last year, most of it revenue from the state.   According to state officials, because the schools are now unaccredited, students attending Honors Academy schools will be unable to transfer coursework.  Parents interviewed by the reporter in the parking lot were unaware that the school had lost its charter to operate.

What is happening in North Carolina may not be illegal, but it ought to be. In his column Taking Note, PBS education correspondent John Merrow recently skewered Baker Mitchell, the North Carolina “businessman who has figured out a completely legal way to extract millions of dollars from North Carolina in payment for his public charter schools… Even though none of his publicly-funded schools is set up to run ‘for profit,’ about $19,000,000 of the $55,000,000 he has received in public funds has gone to his own for-profit businesses, which manage many aspects of the schools.”  This blog covered Baker Mitchell’s schools here.

Mark Weber, writing for New Jersey Spotlight, echoes Gene Glass’s critique that charter schools have never as a sector fulfilled what was promised.  Weber co-authored a recent report from Rutgers University that used readily available data from the state to demonstrate that charter schools segregate students. (This blog covered the Rutgers report here.)  In his short review for New Jersey Spotlight, Weber concludes: “On average, charters educate proportionately fewer students in economic disadvantage… than do the district schools in their communities.  Charters also educate fewer students with special education needs; further the students with those needs that charters do educate tend to have less costly disabilities.  In addition, the sector enrolls very few students who are English language learners.”  “‘Choice’ in schooling will likely lead to what we found in our report: the concentration of economically disadvantaged, special education, and Limited English Proficient students within district schools…  I see three core challenges in New Jersey’s urban schools: segregation, inadequate school funding, and child poverty.  None of these challenges will be solved by the expansion of charter schools.”