When New York State Comptroller Tom Di Napoli informed Eva Moskowitz’s Success Academy charter chain of his intention to audit its financial records, the corporation sued to block the audit of public funds on grounds it was unconstitutional.
According to the story in a legal journal,
“Success Academy claims that a 2009 ruling by New York’s highest court found the Legislature overstepped its bounds by passing legislation in 2005 that authorized the comptroller to audit charter schools.
“Despite fine-tuning in 2010 that resurrected the audits, they’re still unconstitutional, Success Academy claims.”
In fact, Di Napoli has audited other charters based on the change in the law in 2010 that was written specifically to authorize the Comptroller to audit the use of public funds.
In one of Success Academy’s letters to the Comptroller, it asserts that the comptroller lacked the authority to conduct such audits under the state constitution, which authorizes reviews “of any political subdivision of the state” – which charter schools are not.”
Not being “a political subdivision of the state” is another way of saying that the charter corporation is a private contractor, NOT a public school. This has been the standard line of charters across the nation to evade state labor laws and other laws that apply to public schools but not to private contractors.
Diane Ravitch's blog 
We used to call that Taxation Without Representation.
I expect the TEA Party to be all up in arms about it any day now …
HU??
O, UNO HU …
and TEA-kachingey-CON-o-MIST, too …
What next? Private lunch counters?
Race to the Back of the Bus? (RttBotB?)
Funny…you made me laugh. 🙂
According to Moskowitz ‘s rule.. it is ok to take public funds and not be accountable for its use. makes sense, considering charters are not held accountable for their dismal results wth children. Accountability comes with responsibility… something charters lack.
Is SUCCESS serious??? ROFLMAO!!! Audits are a way of life for ALL nonprofits, and charters have no legal exclusion from this… NONE… Obviously these SUCCESS people don’t want the public peering into their probable nepharious financial affairs, including the constant parade of profiteers they serve, that simultaneously trample public school funding….
Their finances are less concerning than how I saw SA children & parents treated.
I don’t care about the politics — whether they’re private, not-for profit, non-profit or for profit. I didn’t see any warmth.
But who knows — maybe that’s the same in ‘public’ schools in NYC however I doubt it is for a super majority of students.
NYC needs to figure out a different structure of operations. Split the databases too. By borough? I wonder which borough would be the first one hacked — I would guess Manhattan. Data rich w electronic records including medical. But then again a lot of Manhattan students are in private school.
They’ll get all of the data in colleges or soon in the workforce. Data about children under FERPA is bread & butter data. Congress looks foolish.
Sometimes I think these hedgucators are just high-stakes testing the public at large, to see if we have any knowledge at all of our own history.
In the end, that may be the only educational service they provide.
I just hope we don’t pay too much for the “service”.
Outrageous! this is the second accountability provision in the new charter law that Eva has openly opposed — the other one required her to enroll comparable numbers of high needs students. The fact that SUNY keeps authorizing the expansion of her charter chain — and DOE gives her space in school buildings far in to the future — is also outrageous, and shows how irresponsible the public officials who are supposed to keep her accountable.
I hope a judge latches onto the fact that Moskowitz identifies her schools to the public as “public schools.” Never once does she identify her schools as “private” anything:
http://www.successacademies.org/page.cfm?p=603
M. Schneider: I remind you that dragging facts into a discussion of some of the most EduExcellent Centres of Commoner Compliance, sorry, I mean “public” charter schools, is considered bad manners among the, er, right sort of people.
I can predict with a 98% chance of “satisfactory” $tudent $ucce$$ that you will NOT be invited to the next Gates Foundation roundtable on VAManiacal teacher evals.
Although as I understand it, another numbers/stats person [this one with a thick accent] was invited to speak at the Student Growth Percentile portion of the same EduExcellent Event but he was provisionally deleted from the list for claiming that “Not everything that counts can be counted, and not everything that can be counted counts.” [Albert Einstein]
He was on even shakier ground when, in response to a query about how to teach without the Holy Edumetrics of SGPs, he took a dive off the deep end by asserting “If you want your children to be intelligent, read them fairy tales. If you want then to be more intelligent, read them more fairy tales.”
He was resoundingly blacklisted from all future edu-malanthropy gatherings when he explained that using the Holy Edumetrics of SGPs and the like unfortunately could lead to a situation where “if you judge a fish by its ability to climb a tree, it’ll think his whole life it is stupid.”
Sheesh! Mathematicians. Go figure.
🙂
In the immortal words of Ronald Reagan, “Facts are stupid things.”
Unfortunately, this is borne out all the time by so-called education reformers.
Michael, I believe Reagan (or his speechwriter) was quoting a famous line of John Adams:
Facts are stubborn things.
Doesn’t this sound like the Paul Vallas situation? Both have laws passed specifically for that situation, they do not follow the law and then they sue because they did not follow the special law just for them. Is this twisted thinking or what. Who do they think they are? Want to be away from that convert to a total private school on your own dime and waste all you want. Not with our money. Just like a bunch of thugs carjacking. What are they afraid of is the question. Must be a good one. Just looked at Chicago’s Budget and in less than 30 minutes lots of questionable things going on. What they are afraid of is if someone knows what they are doing the game is up. It is nothing but 5th grade math when it all comes down on top of comparative analysis. Put them together and there is almost no game they can hide completely. Just like what CORE-CA found in the D.C. school funding. Charter schools receive $13,000/student less than the regular D.C. students at $29,145/student=$16,145/student for charter schools. Charter school students are 40% of the 52,000 students for a total of 20,800 in charter schools. Multiply 20,800X$13,000=$270,400,000. That money was not spent on D.C. students. Where did it go? It went somewhere. Just don’t know where as with the $2.5 billion we found missing from the LAUSD budget for textbooks and instructional materials and supplies over 10 years. It wasn’t spent there. Where did it go. We don’t know as that answer was locked up tight. The same with Chicago I found out again today by looking in their budget. All lies they cannot back up through the actual budget or prove that they are not purposely crashing the school system by their methodology of expenditures.
Above the law?? I’m speechless. And nauseated.
emeticon
Success will win this, assuming the audit is basically the same in scope as the prior audit.
Correction — I see this isn’t the same type of audit as the last one. It appears to be a purely financial audit, not an audit of Success’s performance. So I take it back, it’s not a clear case for Success. Should be interesting.
I certainly hope she gets audited along with all the other charters. However, there are many organizations that deserve audits. I gave to an organization that fights for public education students–one that has name recognition here in NYC. I never got an acknowledgment. And legally I should have received one. I want to be trusting of all organizations, especially the ones that are fighting reform. But my purse is now closed to everyone. The only pol I ever contributed to was Obama. I demand a refund!!!!
Her 2011 990 form had her management fee buried in the middle – $742,000. I believe her husband also runs his own charter so I guess they’re probably over 1 million p/yr.
I assume that’s Success Academy’s fee, not Moskowitz’s. Her salary, which is not low, should be listed elsewhere on the 990.
No indication anywhere of her salary. Furthermore all other’s listed except for one individual indicated as volunteer…$0 salary. The one individual was Jaqueline Albers salary of $103,846 plus other compensation from Success Academy of $9,674. One correction: Form 990 was for 2010 not 2011. I dare say 2011 would have bigger numbers.
Click to access 20-5298861_990_201106.pdf
Page 7.
Propublica has a good search tool called “nonprofit explorer.”
Apparently updated! Possibly anticipating an audit??? I printed mine out last month and all names save one as I mentioned earlier had $0 income and Moskowitz’s not mentioned at all. Page 8 had the fee of $742,000
It’s a year old. You probably were looking at the 990 for one of the individual schools, e.g. “Harlem Success Academy 4.” The main network entity is the one I linked. The individual schools schools are the ones making the management fee payments. The network entity is the one receiving the payments, and it’s the one that pays Moskowitz’s salary. The management fee line you saw was probably an expense line, not a revenue line.
Presumably the state funds for management fees go to the individual schools and then to the network entity.
It’s on page 8. Section B Independent Contractors
Within Section B Line 1. Column A = Success Charter Network, Inc.
Column B Description of Services: Management. Column C Compensation: $742,214
Right, independent contractors to which the filing entity has paid money. The recipient being the network entity. Trust me.
I trust you.
Here’s the last 990: http://www.guidestar.org/FinDocuments/2011/205/298/2011-205298861-086f5600-9.pdf
Her salary (plus benefits) is about $360,000.
Article from 2010: http://nymag.com/news/features/65614/ – states her salary as “north of $300,000”
And from 2013: http://www.villagevoice.com/2013-01-30/news/Eva-Moskowitz-Bloomberg-Charter-Schools/full/
Moskowitz’s private not-for-profit took in $12 million in funding, $3 million of it from the state and the rest from private donations. It paid Moskowitz, the CEO, $336,402 in salary that year, according to Success’s tax returns.
Maybe its different in New York, but in Louisiana they have ads on TV that say, “Charter schools are public schools” with the “are” underlined. I would think any organization that received money from the state would be audited by the state. If you get a federal or state grant that grant is audited.
Twinkle1Cat, when some entity keeps advertising that they really truly ARE public schools, you can bet they are not. Real public schools don’t do that.
They’re public in some ways and not public in others. Obviously they’re not a governmental unit and they’re privately managed. On the other hand, they’re part of the public school system, they receive public funding, and they are free to attend. Moskowitz wouldn’t deny any of those statements, no matter what the marketing materials say, because they’re not debatable. Whether NY charter schools are “real public schools” is a matter of debate, but it’s kind of like debating whether Louis Farrakhan is a “real Muslim.” It gets you nowhere in the end, unless your goal is just to fire up the man on the street.
FLERP, sorry to disagree but privately managed schools that are free to evade state laws regarding teachers and students are not public schools. In some states, charters can staff up with uncertified teachers. in every state, they can choose to exclude kids for reasons that would be illegal if done by a public school. charter operators have gone to federal court to argue that they are NOT public schools. i believe them. If getting public money makes an institution public, then Harvard, Yale, and Princeton are public universities.
That’s essentially an argument about what “public” and “private” mean. Arguments about definitions are fine, but the legal arguments about those terms have to be a lot more nuanced and precise.
If the NY Comptroller’s authority to audit Success depended on whether Success was “public” or “private” — and it’s not clear to me that it does depend on that — then I assume that you would take the position that Success should not have to comply with the audit, since you believe that charter schools are not public. Right?
That’s essentially an argument about what “public” and “private” mean. Arguments about definitions are fine, but the legal arguments about those terms have to be a lot more nuanced and precise, because they have specific practical implications. Here, I’m not sure what if any practical implications there are if one agrees or disagrees that charter schools are public or private. If we assume that the NY Comptroller’s authority to audit Success depended on whether Success was “public” or “private” — and it’s not clear to me that it does depend on that — then you would take the position that Success should not have to comply with the audit, since you believe that charter schools are not public. Right?
FLERP,
the law in 2010 was revised specifically to give the state Comptroller authority to audit charter schools because they receive public money. It does not matter whether they are considered public or private, where public money goes, public accountability goes too. And the law of 2010 says that means public audits.
Not really. The prior version of the law also gave the comptroller the authority to audit charter schools. The Court of Appeals found the law unconstitutional. The thrust of the 2010 amendment was that Comptroller had the “discretion” to audit charters, whereas the prior version required the Comptroller to audit them. And I believe the scope of the audits that the 2010 amendment authorized is narrower than the prior version. So the issue will probably be whether the narrower scope and discretionary nature of the audits authorized in the current law qualify as a proper exercise of the Comptroller’s constitutional authority to perform audits that are “incidental” to its financial monitoring of “political subdivisions” (the “political subdivision” here being public schools).
twinkie — The issue here isn’t whether charters can be audited “by the state.” It’s about what particular state agency can audit them and how broad the audit can be.
Some rules apply to some schools, just not to all schools. Somebody get me off this crazy Disneyland ride. The curvature of the track is making my stomach flip flop.
You can get off as soon as you find that rabbit that led you through the mirror, be quick or it will be off with the teacher’s head.
Why not an audit unless you have something to hide.
Whew, lots to think about. The complexity of charters in general and of the Success Academy Companies is rooted in their founders and funders. Ms. Moscowitz’s polital resume and resultant clout are well documented. Her/their financial structures may be less so but it’s rooted in the financial acumen of the hedge funders and big $ board members. Their ability to create corporate structures that work to their advantage (not to the public or student’s) is obvious.
Based on a brief comparison and examination of the 2010 990s of the Network and several of the individual schools, it’s clear that the Network entity pays big $ to Ms. M (at least $336k) and others at the corporate level, from revenues from private and public grants, donations ($434k) and large management fees from the schools.Overlapping management and Board members, while perhaps questionable, makes these arrangements solid for the long term.
Some of the larger questions raised here include their labeling as public vs. private and the need or possible requirement of a STATE audit. While the 990s are based directly on their existing audits, I’d hope and fight that a State audit of a recipient of public $ would be allowed and performed. The focus of that audit could inform the State and perhaps even the public of the financial methods and perhaps “shenanigans” of this (and other) charter networks.
At the end of the day we are using public $ to fund educational organizations that are nowhere near as accountable to the SED and/or the NYCDOE as normal public schools are. And while the very nature of charters allows for some leniency or freedom to operate outside of some or many of our DOE bureaucratic rules, it should never allow for the financial flaunting of the system, nor in my opinion, allow some to take home huge salaries on the backs of our students and the public education system.
The expenditure of vast sums of money for consultants, media relations teams, and marketing and legal representation, while significantly less is spent on school operations and very little on space/occupancy is questionable at best. And while it is likely not criminal, it would appear to be immoral – let’s just remember these organizations are incredibly sophisticated financially and legally.
My own sad experience with Charters was watching the DOE’s Portfolio managers (i.e. real estate teams) allow, indeed foster, Charters to move into public school properties as the PEP worked feverishly to close schools and thus free up valuable space. When the Charters came in and disrupted these schools and school properties, which became even more overburdened with special needs children and reduced budgets, the Charters invaded and immediately spent their $ to renovate their space and buy new equipment and ,materials of all kinds. Yet they contributed very little to the school community that they muscled into. Details of their deals and minor contributions to the schools that they occupy may be hidden,,but we have all seen the impact. To have our students watch as their own school’s portion of the property continues to deteriorate, while the invading school “has all new,things” is a moral outrage in and of itself. Whatever names we’d like to call this systemic eroding of the public school system, it must be examined and reined in – quickly, before it gets out of hand.
Diane, you make a major misstatement here as well. SA is not saying its a private corporation and cant be audited, its saying that it already gets audited by the state and a second audit is unconstitutional. There is a very big difference. Allow me to explian.
The fact is, charters already have to submit annual financial reports the the Regents Board and have yearly independent audits conducted with results sent to the Department of Education for their review. This is the law and written into their charter agreements which are overseen by the state government. Why doesnt DiNapoli just request those audit findings from the DoE?
So you see, charters are already being audited annually by the state. The reason why is because they are public schools and state laws require them to be audited. The DeNapoli audit is nothing more then a political attack to shut down charters by forcing them to spend on excessive audits. DiNapoli is a stooge for the UTA, why do you think he announced his audits against SA at a meeting of the UTA? DiNapoli also never audits individual zoned schools, so why would he single out individual public charters? Politics perhaps.
It is this sort of taxpayer dollars being wasted on hatchet jobs against political enemies that makes Americans so disgusted by their elected officials!!!
If SA is a public school why did Eva Moskowitz demand teachers and students march over a bridge to protest de Blasio’s goal of charging SA rent during a school day? What do you suppose would’ve happened to teachers/principals of traditional public schools if they cancelled classes and marched over a bridge during school time?? Hint: they would’ve been dismissed from the DOE. Eva Moskowitz’s charter schools are public or private as needed depending on circumstance.
And what if a zoned schools teachers went on strike for weeks on end? Would they be dismissed by the DoE? You are arguing a double standard.
The rally was as much a class as anything in a walled room, exercising your 1st Amendment constitutional rights is something very American. These kids are fighting for their rights , there is little else as educational as that.