Denis Smith is a retired school administrator who worked both as a sponsor representative for charter schools as well as a consultant in the state charter school office. In this five-part series, he offers his perspective about charter school governance and how this mechanism designed to provide transparency and accountability for public entities is sorely lacking and may in fact be the “fatal design flaw” of these schools.

 

Part Three

 

Ohio charter school governance and management issues aren’t exclusive to national chains like Imagine. Here is a case history of one school that was operated by the founder and who hand-picked the board, treasurer and school staff.

 

In 2010, an attorney from a law firm in Wilmington, Delaware that represented an educational publisher called to ask my help in collecting payment from a charter school that had an overdue debt of more than $50,000. The attorney also told me the bill was more than three years old.

 

That’s not the only beef he had with the school. “Do you know how much the school administrator is being paid”? he asked. When I replied that I didn’t know because the state did not maintain a database containing compensation for charter school administrators, he told me. “She pays herself $156,000 to run a school with 175 students and there doesn’t seem to be anything left to pay my client.”

 

When I looked further into the situation and contacted the school sponsor for more information, a tale quickly unfolded of a school with no internal and external controls. The treasurer, a family member of the school head, had ignored invoices sent from the company demanding payment, and the attorney, who wanted to personally bring the situation to the board, could not find any information about where or when they met to discuss school business.

 

As it turned out, the president of the governing board was a close friend of the school’s director, as were several other members of the board. When the attorney contacted the school and asked about the board and their meeting schedule, he was denied this basic information. Stonewalled by the school at every turn, it was at that point that he contacted the state department of education.

 

A phone call to the State Teachers Retirement System soon revealed that no salary information had been sent by the school treasurer to determine payments owed by the school. The school, which had been open for about four years, was ultimately closed by the sponsor.

 

Although the school was operated by two family members and thus not part of a national chain like Imagine, it still contained the same fatal genetic flaw prevalent in too many charter schools – a non-functioning governing board serving not the students and families but the school directors who appointed them. In the post-mortem conducted with the closure of the school, it was apparent that the board was invisible and displayed no curiosity about how the school director and treasurer – family members – required some observation of their performance as well as collective visioning so that the board itself could affirm its role and purpose. In addition, the long-term friendship between the governing board president and the school director prevented the board from functioning and providing the oversight necessary for guaranteeing a free and appropriate education for the students as well as the stewardship necessary for protecting public funds.

 

Sadly, the tale related here has occurred again and again in Ohio since the inception of the charter school program more than fifteen years ago. It is entirely possible that some of the board members had no idea about the size and scope of the compensation that two members of the same family received when compared to the size of the school and the share of state revenue it received. But when a person serves as a member of a board, they must accept that as a trustee for the school, they assume several legal responsibilities which include these basics:

 

Duty of Care – Exercise reasonable care when making decisions as a steward of the school and ensure that all those associated with the school will be held accountable for their actions.
Duty of Obedience – In fulfilling the public’s trust, ensure that the State’s funds will be used to fulfill the educational mission of the school and not for a private purpose.
Duty of Disclosure – Disclose any transactions in which a governing authority member may be involved and where an actual or perceived conflict of interest situation exists.
Duty of Custodian of a Public Trust – Manage public funds for public purposes and not private benefit, comply with Open Meetings requirements and respond to citizen and media request for information about the school and its management.
Duty of Diligence – Determine that deadlines for all required reporting are met, including monthly financial reports, and closely examine reports to determine any trends or variances in the condition of the school.
It should come as no surprise that when problems occur at the governance level – and we have already made the point that by their very design, charter schools contain some fatal design flaws – symptoms of other problems will soon become evident, including poor academic results, financial issues, and staff turnover. Tomorrow, let us examine another case study to see how another governing board fared in meeting its duties and responsibilities.