Ben Chapman of the Néw York Daily News reports on a study by the Center for Popular Demcracy, which reviewed audits of charter schools in Néw York state.
62 of the state’s 248 charters have been audited. The review showed $28 million misspent since 2002. “The Center for Popular Democracy’s analysis charter school audits found investigators uncovered probable financial mismanagement in 95% of the schools they examined…..”
“Kyle Serrette, executive director of the progressive, Washington-based group, said the review of previously published audits showed the schools need greater oversight.
“We can’t afford to have a system that fails to cull the fraudulent charter operators from the honest ones,” said Serrette. “Establishing a charter school oversight system that prevents fraud, waste and mismanagement will attack the root cause of the problem….”
“All told, Serrette’s group estimates wasteful spending at charters could cost taxpayers more than $50 million per year.”
About 9% of New York City’s charters were audited. “Each audit found issues.”
“A 2012 audit found Brooklyn Excelsior Charter School was paying $800,000 in excess annual fees to the management company that holds its building’s lease.
“A 2012 audit of Williamsburg Charter High School revealed school officials overbilled the city for operations and paid contractors for $200,800 in services that should have been provided by the school’s network.
“A 2007 audit of the Carl C. Icahn Charter School determined the Bronx school spent more than $1,288 on alcohol for staff parties and failed to account for another $102,857 in expenses.
“The city spends more than $1.29 billion on charters annually.”
Diane Ravitch's blog 
“We can do more with less.” The for-public-consumption version of the charterite/privatizer mantra is lacking a few words in their private ROI/MC [ReturnOnInvestment/MonetizingChildren] version.
“We can do more for ourselves with less for the children if we aren’t transparent and ethical.”
Transparency. Ethics. That’s just for the “little people” as Leona Helmsley would say.
😎
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“We can’t afford to have a system that fails to cull the fraudulent charter operators from the honest ones,” said Serrette. “Establishing a charter school oversight system that prevents fraud, waste and mismanagement will attack the root cause of the problem….”
Correction, we cannot afford a parallel school system that is rife with fraud, waste and mismanagement at all.
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I’m betting that the $$ they couldn’t account for went to grease the pols who protect and push charters.
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Would be nice to see the actual analysis by the CPC.
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Not that charter schools need defending, but our analysis, if its going to be really critical and thoughtful, has to use the right numbers: for starters the 50 million sounds like a lot of waste, but in reality, it’s less than 4% of the funds going to Charter schools. Beyond that a comparative analysis would have to be made with noncharter schools, if we are going to talk about “waste and mismanagement” – the questions must then be how much is wasted or mismanaged in regular public schools. And there are many challenge with even this analysis: a) the estimation would have to include the web of possible waste and mismanagement that goes up the DOE hierarchy, since public schools expenses are diffused upwards (whereas Charter schools are more contained) b) a critical aspects of charter schools that bears reminding is that with autonomous charter comes more budgetary and purchasing freedom – to run charter schools in ways similar to private schools, this changes, fundamentally, the definition of what “waste and mismanagement is” (many things that are waste (even illegal) in public schools are regularly done and practiced in private schools) c) expenses in things like hiring, marketing, admissions, branding, HR incentives, etc – a nominal cost in public schools, but which differentiates the professional environment charter schools try to establish, may be considered waste by some, but essential by others, to a differentiated mission and vision of charter schools.
One of the things that strikes those of us who have visited many charter schools and many public schools (as a parent, as a researcher, and as a school leader), is the differences in the investments in school environment and aesthetics – from faculty lounges that actually look like desirable places to hang out, to faculty retreats that feel like corporate affairs, to well resourced classrooms that are kept immaculate, to walls and hallways with obvious signs of care (and $). Whether this has any effect on student learning or not is a different matter.
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This is a direct link to the report: http://populardemocracy.org/sites/default/files/CPD_AQE_Charter-Schools-NewYork-Report.pdf
The estimate that as much as $50 million has been/will be lost to charter school fraud this year was arrived at by simply referring to a survey conducted by the Association of Certified Fraud Examiners, whose respondents (mostly auditors and compliance officers) “estimated that the typical organization loses 5% of revenues each year to fraud.”
One wonders why the Center for Public Democracy, an organization that partners with and is funded by a variety of unions, including the AFT, and the report’s co-sponsor, The Alliance for Quality Education, a “dark money” 501(c)(4) advocacy group, didn’t identify that under this same methodology/estimate, $1.3 BILLION out of the 2014-2015 NYC DOE budget will be lost to fraud, or provide a list of best practices for compliance and prevention at the district level. It couldn’t possibly have anything to do with politics, could it?
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Wow. That is just pathetic. Arguably it’s par for the course for the AQE, but for the Daily News to just regurgitate that — wow.
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No more so than the politics that often favors charter schools.
That’s why so much research and investigation is not worthwhile. All depends on the source.
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There are audits and audits. Remember Enron? Remember how the auditors, Arthur Anderson and Co., made Enron look good? Tracking fraud and abuse in charter schools should start in each state with the charter authorizers and their books –following the money, and for public schools a close look at vendor contracts approved by the state, districts, and individual schools. I don’t seen much political will for audits, or serious investigative reporting. Then there is the issue of federal accountability. Auditing and investigative reporting often ends with little more than political posturing about waste and abuse. There can be little doubt that some of the best investigations are being done by bloggers. Need more legal eagles in this work.
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There’s mismanagement, but there’s also “honest graft,” an oxymoron coined by Tammany leader George Washington Plunkett, which is endemic to the charter industry and those who tout and fund it.
A good example of “honest graft” might be exorbitant rents paid by a charter school to its landlord, who just happens to be connected to school management.
Or it might be a CMO connected to the Board of a particular school.
Or it might be real estate investments made by people with insider knowledge of charter expansion and development.
Or it might be charter operators with a lot of political juice – cough, Eva Moskowitz, cough – who are given first choice of public school facilities to take over.
Or, surprise, surprise, it might be politicians receiving money from charter touts and entrepreneurs, who then override local political leaders who try to limit the favoritism shown charter schools.
The opportunities are endless, and, in the eyes of the so-called reformers, only chumps would fail to take advantage of them.
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Michael Fiorillo,
There are many charter operators who buy the property, then lease/rent it to themselves, and pay their corporation far above market rate. Sweet deal.
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Knowing of your interest in seeing public school dollars spent wisely, I thought you might be interested in this story. District supts and district school board members failed to stop millions of dollars being mis-spent by a collaboration of traditional districts:
http://www.startribune.com/local/stpaul/284833901.html
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Joe, you will never persuade me that charters that reap billions of dollars from the public treasury with minimal or no public oversight are more accountable than public schools. As we have seen in many instances, charter owners sometimes operate for profit, and their bottom line is $$, not education. How do you feel about Academica’s $100 million real estate empire in Florida? Or industrialist David Brennan’s non-accountability in Ohio? Or the billion dollars spent yearly in Michigan with no accountability? You try to do this tit-for-tat routine whenever a charter scam is revealed, and it just doesn’t fly.
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Yes, you’ve acknowledged that you are not a fan of giving people choices among public schools. And despite a variety of contracts, I doubt you will be convinced of a variety of other things. I do appreciate the opportunity to learn and share here.
There’s a huge amount of corruption in this country – I’ve never argued it’s “Tit for tat” because I have not studied this.
Corruption sickens me, whether it’s in the district or charter sector. I speak out against both, and try hard to help create better public schools, whether district or charter.
http://www.huffingtonpost.com/eric-cooper/stop-meaningless-debates_b_6248230.html
We also promote collaboration among schools that helps youngsters.
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Eva Moskowitz in the WSJ on how charter schools provide a “windfall” for public school students.
They help public schools improve, is her theory.
I think it’s interesting only because they’re probably aware that charter schools can’t be seen as damaging existing public schools, that this has to look like a win/win, even if Cami Anderson now admits that charters in Newark result in public schools taking a higher percentage of needier kids. Not a win.win, in other words.
I think it’s a POLITICAL response, and revealing that she feels she has to claim some benefit to the other schools in the system. Usually the affect on public schools is simply ignored.
http://online.wsj.com/articles/eva-moskowitz-the-charter-school-windfall-for-public-schools-1417215279
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A windfall is generally considered to be an unearned benefit. I guess the theory is that public schools are receiving the unearned benefit of the hard work of people like Eva Moskowitz.
I just find the TONE of this stuff incredible. Can public schools do NOTHING right? Thank God for Eva Moskowitz, is all I can say! I have no idea how anyone was educated in this country prior to her charter schools!
Apparently “humility” is not hugely valued in ed reform circles 🙂
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This is probably partly a response to Farina’s recent statements about counseling-out, and partly a piece of the campaign to raise the charter cap in NY. BDB opposes. Tisch favors. Cuomo probably favors if the political benefit is there. Moskowitz certainly favors as the cap hinders SA’s growth. I assume there’ll be bills presented to the legislature this coming session.
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I think ed reformers eventually hit a wall, politically. At some point they have to show some benefit to public schools, just because most kids attend public schools.
If it turns out they’re weakening public schools (which is what Cami Anderson said is happening in Newark) that’s a substantive problem but it’s also a political problem.
They sold this as “improving public schools”, which is the only reason it has public support. I don’t think anyone signed on to destroying public schools that are working, and turning them into a “safety net” for charter schools. That was not discussed.
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They probably aren’t going to hit that wall until sound, unbiased, legitimate research emerges showing that charters are harmful to kids–kids–who don’t attend them.
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“Counseling out” isn’t what Anderson was talking about in Newark, though. What Anderson was talking about was the effect of having a choice system within a public system. The public system becomes the safety net that allows the choice system to exist.
“What’s fascinating is how closely Fariña’s remarks echo those of a nearby urban district superintendent, Newark’s Cami Anderson. Early in November she admitted, “We’re losing the higher-performing students to charters, and the needs [in district schools] have gotten larger.”
After noting that special-needs populations have approached 35 percent at some district schools, she went on: “I’m not saying [charters] are out there intentionally skimming, but all of these things are leading to a higher concentration of the neediest kids in fewer [district] schools.”
I think adults who claim to be all about “systems thinking” should have anticipated this result.
This happens WITHIN my local public school, and they adjust. If they have X number of special needs in a class they add a staff member to that class. It’s a way to even it up for the kids who aren’t special needs, because obviously they’d get less attention in a room with kids who have a lot of special needs without an additional teacher. This is just reality. The public schools in Newark should get recognition for serving as the safety net schools.
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It’s just terrifying the extent to which Eva Moskowitz is able to broadcast her propaganda without a voice being given to an opposing position. Contrary to this “windfall” which she claims, charter schools promote a lack of investment, both in money and manpower, in the public good, while using public money and space!! Her commentary places heavy emphasis on test scores as some validation of her schools’ existence, but in fact most parents oppose a heavy emphasis on standardized testing. She then brings up her usual whipping boy, the teachers union. However, substantial opposition to her comes from NYC parents. We want schools that develop organically out of our community to meet the specific needs of our community and not her top-down, cookie-cutter, “our way or the highway” schools. We want investment in our public schools and not the creation of a competing, unresponsive bureaucracy, which Success Academy represents. A better comparison would be Success Academy versus parochial schools.
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Money spent here is no problem when they buy the right to propagandize our children. It is merely an investment in mind control. Corporation CEOs having bought the media to shape the minds of the general public now seek the means to shape the thinking of our children. Hitler had Goebels, we have the corporate CEOs and both led and are leading to catastrophe in many ways. Mind control and the means to employ it are antithetical to democratic principles. Already we have seen the destructiveness to our country by those who have sought not the truth, through academic unbiased deep research but by less than stellar philosophies, have baked ideas. Only God knows where this will end up.
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Funny… I don’t recall reading about this in the NYTimes… though they DID cover a damning audit of the central office’s technology funding performed by Scott Stringer TWICE… maybe charter misbehavior isn’t newsworthy?
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