Archives for category: Charter Schools

A reader sent this email to me:

At the 6:43 mark of this latest Fordham podcast, Mike Petrilli says:
“If this [opt-out] thing goes national, the whole education reform
movement is in serious trouble.”


Having read and reviewed every line of the Alexander/Murray proposal to rewrite the Elementary and Secondary Education Act (aka No Child Left Behind), Mercedes Schneider here renders her judgment about the bill as a whole and compares it to the one that the House of Representatives has been working on.


There are aspects to this bill to dislike: its love for charters, which make no sense unless you think the nation needs two publicly funded school system, one free to choose its students, the other not; its retention of annual testing, which has not achieved its goals for the past 13 years, making the United States the most over-tested nation in the world. And there are aspects to like a lot: like stripping the Secretary of Education of any power to control state and local decisions about standards and tests.


Though the bill is not perfect, it has one great advantage: it abandons the absurd goals, mandates, and sanctions that were central to NCLB.


Read Mercedes to see what she concludes.

This is part 3 of Stephen Dyer’s series about charter schools in Ohio. What he has learned from state data is that charter schools perform worse than public schools and take money from children in public schools in every district.


His series is titled “Ohio Charter Schools Just Don’t Work.” Something tells me you won’t read anything about this in the Wall Street Journal, and very likely not the New York Times either, although they are fast to shine a bright light on high-performing charters which are not representative of the charter industry.


He writes:


Now that I’ve shown how state data indicate that Ohio’s charter schools simply aren’t up to snuff with Ohio’s school districts, costing children in those districts millions of dollars a year, and that the excuses posited by some in the charter school community just don’t hold water, I’m going to spend some time today looking at building-level data.


This is the data charter school proponents have argued for years should be the only comparable data when look at charter and public school performance.


Even though the state does not track which kids go from which public school buildings to which charters.


And the funding comes from the district, not the district building the kids leave.


And charters are considered districts in state law for funding and accountability purposes.


And charters are considered Local Education Agencies for federal funding and grant making purposes.


The primary reason I look at district-level data in my comparisons is pretty simple: when a kid leaves a district for a charter, the money that flows to the charter for that kid’s education comes out of every child’s state funding pot, not just the pot going to the most failing building in the most failing district. So it’s not punishing the most failing building in a district –it’s punishing every building and child in the district, even the best of both.


But for argument’s sake, let’s look at charter and public school building performance. What you’ll see is even in the light most favorable to charters, public schools outperform charters overall. Period.


Ohio’s charter schools perform worse overall than all local public school buildings, including those in the Big 8 urban districts (Akron, Canton, Cincinnati, Cleveland, Columbus, Dayton, Toledo and Youngstown) – the areas where charters were supposed to offer better alternatives. Charters register lower percentages of As and Bs while having higher percentages of Ds and Fs than local public schools.


Read the whole post to read the links and the rest of the story.


Why is the new ESEA setting aside new money for a sector that performs worse than public schools? Why are hedge fund managers and philanthropists funding more such schools? When will they pay attention to data?


When Jeb Bush invented school grades, he no doubt thought they would embarrass public schools and help charter schools and voucher schools, but it is not working. Just as charters are not working.

This is part 2 of Stephen Dyer’s series called “Charters Just Don’t Work.”

In this post, Dyer examines the excuses that charters offer for their poor performance relative to district public schools.

For example,

Claim: Charter schools struggle because their populations are so much more challenging than districts’.

Fact: While charter schools do have higher percentages of students in poverty and minorities, they have smaller percentages of special education children.

But here’s the deal: Charters do worse on the report cards than districts with greater challenges. So that means that while charters’ poor performance compared with districts overall can perhaps be explained by more challenging populations, districts with greater challenges are doing better. So charters are not, on the whole, doing a better job serving our state’s most challenging students than districts with more challenges than the charter faces.

There are other excuses, but as Dyer says, they don’t hold water.

Stephen Dyer, former legislator, now affiliated as an education policy fellow with Ohio Innovation, has been a close observer of charter schools in his home state. When he writes, he relies on nonpartisan data. This is the first in a series about the disappointing results of charter schools in Ohio.


This first post finds that taxpayers are spending hundreds of millions of dollars (that is, taking it away from public schools) to subsidize charter schools that perform the same or worse than the regular public schools.


Here is what the data show:

Out of the $774 million that were transferred from districts to charters with state report card grades , 56% – or more than $430 million – went to charter schools that performed worse overall than the district that transferred the money. If you include districts that performed the same, nearly 2 out of every 3 dollars went to charter schools from a district that performed the same or better, at a cost of $504 million.

Local taxpayers had to subsidize $180.3 million to cover the money transferred to the same or worse performing charter schools.

Districts were more likely to lose money to charters that underperformed on all 8 report card categories and not a single transfer occurred where the charter outperformed the district on all 8 report card grades.

When districts and charters were both graded in every category, 97% of the time districts outperformed the charters. Just 1.8% of the time did a charter outperform districts in the majority of the categories.

There were 461 school districts – accounting for more than ¾ of all of Ohio school districts – where all the kids attending charter schools were transferred to equal or poorer performing charter schools. That adds up to 19,042 kids and $136.6 million.



Meanwhile, every district lost at least some funding to poorer performers, with only 17 districts losing less than half their children to poorer performing charters.
In 84 of 88 counties, more than half of children attended poorer performing charters, and in 43 of Ohio’s 88 counties, all the children going to charters attend charters that perform the same or worse than local school districts.


Ah, the Brave New World of free-market schooling! The for-profit corporation Imagine Schools just sold its campus in east Manatee, Florida, for $6.6 million. The school will continue to operate there; it has a capacity of 650, and an enrollment of 500 students.


The school, which has about 500 students and a capacity for 650, has roughly nine years left on a lease commitment for the two buildings involved in the sale.


Completed in 2009, the school at 10535 Portal Crossing occupies about three acres. The sale equated to a 10% capitalization rate based on the school’s rent, says Ian Black, whose commercial real estate brokerage firm represented both sides in the transaction.


“What made this transaction somewhat unusual was that Hemisphere didn’t know where Lakewood Ranch was at first, but as they conducted their due diligence and discovered that the ranch had just turned 20 years old, they began to recognize the area’s value and the value of the school, which is a beautiful facility that’s well located,” says Black, founder and president of Ian Black Real Estate.


The Imagine School in Lakewood Ranch is one of 17 such charter schools in Florida, and among 71 Imagine campuses nationwide. In 2013, Imagine’s parent company generated revenue of $250 million, according to marketing materials compiled for the sales effort.


Meanwhile, in Ohio, Imagine Schools was fined nearly $1 million by a federal judge for forcing a lucrative lease agreement on a school it operated.


Under the complex deal, Imagine Schools negotiated the pricey lease with SchoolHouse Finance and presented it to the school board of the Renaissance Academy for Math and Science for approval. Imagine Schools owns SchoolHouse Finance and directly benefited by the agreement.


“This clearly constituted self-dealing,” U.S. District Judge Judge Nanette K. Laughrey wrote in a blistering 29-page ruling.


The Columbus Dispatch added:


Sound familiar? The Dispatch in October reported about a North Side charter school spending more than half of the tax dollars it receives on rent in a very similar lease deal with Imagine Schools and SchoolHouse Finance. The board of the Imagine Columbus Primary Academy asked Imagine to renegotiate the lease but that has not happened.


Other Ohio charter-school operators use similar lease deals, and while apparently legal, supporters and opponents complained that they wasted tax dollars and lawmakers pledged to take a look.


In the earlier story, the Columbus Dispatch learned that an Imagine Schools charter school was paying more in rent than to staff and other costs.


A North Side charter school expects to spend more of the tax dollars it receives this school year on rent than on teachers and staff.


Imagine Columbus Primary Academy projects building-lease payments of $700,000, making rent the school’s top expense, eating up more than half its annual state revenue, according to a school financial report. The school expects to pay $614,000 on salaries and benefits this year.


Similar arrangements are in place for the other five Imagine Schools in Franklin County.


Who is charging the charter schools such high rent? A company called SchoolHouse Finance — which is a subsidiary of Imagine.


It gets even more complicated: SchoolHouse buys the buildings, resells them typically for two or three times the purchase price, and then leases the facility from the new owner so it can rent the space back to Imagine.


Five of the schools in Franklin County received a combined $20.2 million in the 2012-13 school year, according to their most recent state audits. A quarter of that money — more than $5.1 million — was spent on rent, all under long-term leases with SchoolHouse Finance.


A sixth school, Imagine Integrity Academy, spent 81 percent of its $440,009 in state aid on rent, according to an audit for the 2011-12 school year, the most recent available.


And on top of the leases, Imagine is being paid hundreds of thousands of dollars for “indirect costs” as operator of the schools, records show.
The upshot is that the complex deals are diverting hundreds of thousands of public dollars to one of the nation’s largest charter-school operators, Imagine Schools Inc., and its affiliates. Imagine operates 67 charter schools in 11 states and the District of Columbia. At least three states and Washington, D.C., are investigating Imagine for real-estate maneuvers like those in Ohio, and a fourth state, Missouri, already has shut down several Imagine schools.


Why aren’t these for-profit schemes illegal? Why should tax dollars enrich profiteers?

The Center for Popular Democracy released a bombshell report on the financial consequences of charter deregulation and lack of public oversight. It is called “The Tip of the Iceberg: Charter School Vulnerabilities to Waste, Fraud, and Abuse.”


When public money is handed over to private corporations or individuals to operate schools, there must be regular monitoring of  and audits. Absent financial monitoring, the result is predictable: waste, fraud, mismanagement, and financial abuse. Does this help education? No, it enriches people who are either in the education business for the money or incompetent to manage the finances of a school.


Here is the executive summary released with the report:


A year ago, the Center for Popular Democracy (CPD) issued a report demonstrating that charter schools in 15 states—about one-third of the states with charter schools—had experienced over $100 million in reported fraud, waste, abuse, and mismanagement. This report offers further evidence that the money we know has been misused is just the tip of the iceberg. Over the past 12 months, millions of dollars of new alleged and confirmed financial fraud, waste, abuse, and mismanagement in charter schools have come to light, bringing the new total to over $200 million.


Despite the tremendous ongoing investment of public dollars to charter schools, government at all levels has failed to implement systems that proactively monitor charter schools for fraud, waste, abuse, and mismanagement. While charter schools are subject to significant reporting requirements by various public offices (including federal monitors, chartering entities, county superintendents, and state controllers and auditors), very few public offices regularly monitor for fraud.


The number of instances of serious fraud uncovered by whistleblowers, reporters, and investigations suggests that the fraud problem extends well beyond the cases we know about. According to standard forensic auditing methodologies, the deficiencies in charter oversight throughout the country suggest that federal, state, and local governments stand to lose more than $1.4 billion in 2015.b 1 The vast majority of the fraud perpetrated by charter officials will go undetected because the federal government, the states, and local charter authorizers lack the oversight necessary to detect the fraud.


Setting up systems that detect and deter charter school fraud is critical. Investments in strong oversight systems will almost certainly offset the necessary costs. We recommend the following reforms:


Mandate audits that are specifically designed to detect and prevent fraud, and increase the transparency and accountability of charter school operators and managers.
Clear planning-based public investments to ensure that any expansions of charter school investments ensure equity, transparency, and accountability.
Increased transparency and accountability to ensure that charter schools provide the information necessary for state agencies to detect and prevent fraud.
State and federal lawmakers should act now to put systems in place to prevent fraud, waste, abuse and mismanagement. While the majority of state legislative sessions are coming to an end, there is an opportunity to address the charter school fraud problem on a federal level by including strong oversight requirements in the Elementary and Secondary Education Act (ESEA), which is currently being debated in Congress. Unfortunately, some ESEA proposals do very little reduce the vulnerabilities that exist in the current law. If the Act is passed without the inclusion of the reforms outlined in this report, taxpayers stand to lose millions more dollars to charter school fraud, waste, abuse, and mismanagement.



To read the full post:


It contains a long list of examples of charter fraud, waste, abuse, and mismanagement. And it is only the tip of the iceberg.






Charter school founder Ref Rodriguez is running for the Los Angeles school board, seeking to beat incumbent Bennett Kayser. Kayser is known for his insistence that charter schools be financially transparent and accountable for their use of public funds.

The Los Angeles Times reported that the charter school chain co-founded by Rodriguez (who is its treasurer) is embroiled in financial scandal.

“A Los Angeles-based charter group awarded food-service contracts worth millions of dollars to a company partially owned by one of the schools’ high-ranking employees, a state investigation has found.

“The probe involved Jacqueline Duvivier Castillo, who is the director of business and development for PUC Schools and a part-owner in Better 4 You Meals, a company that has provided food to the charter group for the last five years. Investigators said the charter failed to demonstrate that the contract was “awarded properly despite the apparent conflict of interest.”

“Late Saturday, the charter organization said in an email to The Times that Duvivier Castillo would no longer be an employee of PUC….

“Duvivier Castillo failed to properly report her financial interests in the company. The company was ineligible for the food contracts because it lacked a health permit and relied on a subcontractor to prepare meals. PUC Schools did not select the lowest-priced bidder as required.
One of the area’s largest charter groups, PUC serves about 4,800 students in 15 schools, including in the east San Fernando Valley and north of downtown. PUC’s test scores typically compare well with nearby traditional neighborhood schools. It recently started a national organization that opened a campus in Rochester, N.Y….”

Charter officials said they were unaware of the conflict of interest but official documents showed otherwise.

“Tax documents for 2010 list the company as a vendor in filings signed by Rodriguez or Elliot. PUC, the documents said, was “party to a business transaction” with a “key employee.”

“The charter’s tax returns for 2012, however, no longer listed the company as a vendor.

“Company documents provided by the state show that Duvivier Castillo’s husband, Fernando Castillo, is a top official with the company, which provides meals for students at more than 100 charter and private schools.

“He could not be reached for comment.

“Annual audits paid for by PUC and released by the state indicated charter officials knew of the alleged conflict of interest.

“Additionally … PUC has signed a contract with a company that is one hundred percent owned by PUC’s director of business and development,” the PUC audit said. “PUC’s management believes that all transactions, including the bidding process, were done in arm’s length.”

“According to these audits from PUC, the charter group paid Better 4 You Meals more than $339,000 in 2011, more than $947,000 in 2012 and about $970,000 in 2013. No figures were available for other years.

“Charter officials reported to the state that Duvivier Castillo had a controlling interest in the company until 2014. She and her husband now have 19% stock ownership, charter officials said.”

I don’t live in Los Angeles, but then neither do the hedge fund managers and equity investors and billionaires who regularly pump money into campaigns in districts where they don’t live. I am giving Bennett Kayser’s campaign $100 because he expects charter schools to be financially and academically accountable. All schools that receive public money should be held to the same standards. His opponent Ref Rodriguez operates a charter school which tried to keep a recent audit secret until after the election. It has been leaked, however. See the KPCC public radio summary here. Rodriguez is the charter’s co-founder and treasurer; the audit finds the school was “insolvent” for nine years and was poorly managed in terms of its finances.

Here is a comment on the blog:

“Here’s where you can donate on-line to Bennett’s campaign:

“Here’s his website in general:

“One more thing, Ref portrays himself as a poor Chicano from the barrio who cares about the education well-being of poor Chicanos in the barrio.

“Well, let’s see… because charters are unregulated, he can pay himself whatever he wants, and he works as little as he wants.

“So what does he do?

“He pays himself $350,000 (a third of a million dollars) annually, while he pays his custodial and cafeteria workers—all low-income Latinos—$8/hour instead of the living wage that their counterparts in the traditional public schools get paid… while principals in traditional public schools earn around $100,000 annually.

“Try to live in L.A. on $8/hour.”

Karen Wolfe is a public school parent in Los Angeles:

She writes:

“Just like a rash of neighborhood robberies reminds us to double check that our doors are locked, Ref “Reformer” Rodriguez’s campaign to take the school board seat away from experienced educator Bennett Kayser reminds us how vulnerable we are.

“One recent alarm came in the form of an invitation to a fundraiser at the home of Frank Baxter (supporter of charters since they were a twinkle in his eye, in the 1990s, and now co-chairman of the board of the Alliance charter management organization).

“The Special Guest was none other than Marshall Tuck, the recently defeated candidate for California Superintendent.

“Defeat is no obstacle for someone like Tuck. Sure, in addition to losing his election, he was left off the “really good list of ed reform leaders in LA :)” which LA School Report publisher Jamie Alter Lynton sent to her husband, Sony chief Michael Lynton. (Readers can see the whole list in the treasure trove of leaked Sony emails exposed on WikiLeaks.)

“So, at the Ref Rodriguez fundraiser, Marshall Tuck was the Special Guest.

“The suggested donations were $500-$1100 per person. Why stop at $1100? I thought the LA City Ethics Commission in January raised the campaign donation limit to $1300. Maybe supporters are purposely reserving $200 because it’s just enough for a trip to Walmart for campaign supplies–valet parking included. That’s what Students For Education Reform disclosed spending on April 13, working *independently* to defeat Bennett Kayser.

“Humor aside, it turns out $1100 is the donation limit, and $200 in receipts is not even a drop in the bucket to Walmart of course. The billionaire retailer is waging a war on labor unions and the quickest route is through public schools.

“No one has stood up more consistently for the school district’s union partners than Bennett Kayser. So where is the brotherhood and sisterhood as we fight to protect and restore our schools? As Bennett Kayser wages the campaign fight for his life?

“According to folks close to Kayser’s campaign, SEIU has stepped in. This is surprising to education activists who have been unnerved by SEIU’s advocacy for former superintendent Deasy and other privateers. Let’s hope they increase their support tremendously–immediately. But where are the teachers, for whom Bennett Kayser—a former classroom teacher—has been a steadfast supporter? While UTLA strongly backed Bennett Kayser in the primary campaign, their organization is invisible as we near the finish line.

“Bennett Kayser is being outspent by charters 9:1. But if every teacher that lives in Board District 5 brings in two votes, Bennett Kayser will win and, once again, people will win over corporate power. UTLA can provide the kind of support that can make a monumental difference. They need to do it today.

“The alarm is sounding for Bennett Kayser’s campaign.

“Anyone wishing to volunteer can contact 323-535-9930 and donations can be made at Every single bit helps.”


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