Marian Wang of ProPublica writes that Néw York’s First Deputy Comptroller, Pete Grannis, can’t understand why charter school regulators in the state are uninterested in charter school accountability for public funds.
Grannis has contacted state and city officials about his concerns and received no response.
“Pete Grannis, New York State’s First Deputy Comptroller, contacted ProPublica after reading our story last week about how some charter schools have turned over nearly all their public funds and significant control to private, often for-profit firms that handle their day-to-day operations. The arrangements can limit the ability of auditors and charter-school regulators to follow how public money is spent – especially when the firms refuse to divulge financial details when asked.
“Such setups are a real problem, Grannis said. And the way he sees it, there’s a very simple solution. As a condition for agreeing to approve a new charter school or renew an existing one, charter regulators could require schools and their management companies to agree to provide any and all financial records related to the school.
“Clearly, the need for fiscal oversight of charter schools has intensified,” he wrote in a letter to New York City Mayor Bill de Blasio last week. “Put schools on notice that relevant financial records cannot be shielded from oversight bodies of state and local governmental entities.”
“It’s a plea that Grannis has made before. Last year, he sent a similar letter to the state’s major charter-school regulators – New York City’s Department of Education, the New York State Education Department, and the State University of New York.
“He never heard back from any of them. “No response whatsoever,” Grannis said. Not even, he added, a “‘Thank you for your letter, we’ll look into it.’ That would have been the normal bureaucratic response….”
“To Grannis, though, his efforts aren’t about politics. His office is “agnostic on charters,” as he put it. His office also audits the finances of traditional public-school districts, he pointed out.
“We’re the fiscal monitors. We watch over the use or misuse of public funds,” Grannis said. “This isn’t meant to be anti-charter. Our job is not to be pro or anti.”
His job is to monitor the use of public funds, wherever it goes. Apparently no one else cares.
Diane Ravitch's blog 
Wonder why they are baffled. Anyone following the charter industry at all should know how they operate by now and what are their objectives.
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Why would the fox want to cover the hole it dug to get inside the hen house where it is eating all the chickens?
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“His office also audits the finances of traditional public-school districts, he pointed out.”
That’s an easy legislative fix then. Make the financial reporting requirements identical.
What’s the justification for having two sets of requirements? Financial reporting doesn’t have anything to do with “opportunity for innovation in learning”.
How much comes in (from all sources) and where it goes. All of it. Private and public funding sources and payments to all staff and contractors for both sets of schools. Why would anyone object to that?
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A guy who merely wants to uphold the law. Pity him. Poor guy, if he serves at the will of the governor and he keeps making demands, he will soon be looking for a new job. One would fully expect that he would not receive a response from the state agency. Strange that he hasn’t heard from the appropriate BDB mayoral office,
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He’s a rare breed, a regulator who took the job to regulate.
It’s so impolite and adversarial! He’ll never get that next job in the private sector with this attitude 🙂
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Chiara, you are ” spot on”!!!
What a surprise it won’t be when their finances are exposed to the light.😊
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I’m wondering what was the original justification for two sets of rules. I’m genuinely stumped. Why would charters need different financial reporting requirements? How would that benefit the students? It’s a risk to the students, really, not knowing where their state stipend goes.
They already pay a comptroller and he’s reviewing the public schools books.
We just had a brand new principal fired (and now indicted) here for stealing a sports booster fund- private donations – not even public funds. No one would have known she was a thief unless they reported every dime that comes in and out. They do report every dime so it came to light her first month on the job.
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Chiara, Where do you think you are? Oz? This is ‘new’ NYS, where, by the will of Der Fuhrer, Cuomo and his charter Gestapo charters receive preferred treatment by all state agencies as long as they continue to harm public schools and students. Do not bet your retirement that any requested information will see the light of day. I still want to know why the new ‘progressive’ NYC mayor has participated in this information stonewall.
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But I thought Tim said the whole process in NY was so transparent that even someone from Louisiana could figure out what was going on?
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Yes, he did say that but just because someone says something doesn’t make it true.
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“some charter schools have turned over nearly all their public funds and significant control to private, often for-profit firms . . .”
Fortunately, in the comments on the piece the author clarifies that “often for-profit” in reality applies to a very limited number of NYS charter schools. She should probably edit the body of the piece as well—we have the technology!
“And the way [Grannis] sees it, there’s a very simple solution. As a condition for agreeing to approve a new charter school or renew an existing one, charter regulators could require schools and their management companies to agree to provide any and all financial records related to the school.”
You mean like filing a (agonizingly) detailed financial proposal that describes whether the charter will contract with a non-profit management organization, and if so, what the exact terms of the arrangement will be, down to the penny? A document that the charter authorizer (or anyone with internet access) can then reconcile with the third-party financial audit that every charter is required by law to provide every year? http://www.newyorkcharters.org/wp-content/uploads/Success-Acdaemy-Upper-West-Audit-2012-13.pdf
Perhaps I’d take Grannis seriously if he had a better handle on what charters are required to report now, and if he were seeking similar above-and-beyond audits of *any* non-profits that receive large sums of government money. Without those elements, and with an office loaded with political appointees rather than merit hires, this feels like a case of “nice schools you got here; it’d be a shame if the bureaucracy came along and made your lives miserable.”
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Tim, you are an apologist for privatization, no matter how awful the consequences for kids.
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I don’t think that’s accurate assessment of my views, but it sure is funny that you’d say that about someone who is a very, very rare bird in these parts: a parent who actually sends his kids to high-needs public schools in the same city where he lives and works.
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This issue has already been litigated in Ohio. The Ohio charter refused to turn over financials because of “trade secrets”
That was private litigation, one state AG joined the lawsuit on behalf of the state but then the next AG declined to pursue the state’s’ interest, but obviously it could be remedied easily with legislation. Crickets from the statehouse. They’re not doing anything to change the reporting regs.
“Ohio’s largest for-profit charter-school management company is fighting a judge’s order to turn over financial records showing how it has spent millions in tax dollars.
Attorneys for White Hat say the ruling requires them “to disclose confidential information and trade secrets” and asked that it be put on hold while they take the case to the Franklin County Court of Appeals.”
http://www.dispatch.com/content/stories/local/2012/02/16/white-hat-fights-order-for-financial-records.html
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“The Ohio charter refused to turn over financials because of trade secrets”
Do these “trade secrets” have to do with the methods used to fail to educate Ohio’s children?
“White Hat schools are failing to educate Ohio kids. A 2010 report by the National Education Policy Center at the University of Colorado-Boulder found that only two percent of White Hat’s schools nationwide were meeting Adequate Yearly Progress (AYP) measures. Despite this abysmal record, and despite a 2007 state audit that found White Hat’s business practices to be ‘abusive,’ the company continues to operate some 30 charter schools in Ohio.
See more at: http://www.prwatch.org/news/2014/10/12624/white-hat%E2%80%99s-magic-trick-transforming-public-schools-private-assets#sthash.Iy7D59hu.dpuf
I think it would be beneficial to learn the trade secrets that leads to NOT educating children adequately. Then the entire country could do the same thing.
I’m SORRY,I forget. Arne Duncan is already doing that with help from governors like Cuomo through the forced use of Common Core State Standards and using tests to rank and yank teachers and to make as many students as possible feel like failures.
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The really interesting question to me is who owns the real estate? If you’re a “public school” and you purchase property with public proceeds, who owns that property?
What if public schools were gone in a certain geographical area and the charter-owner just decided to close down? Then what?
They’re pushing into rural areas, so this could actually happen. The charter could drive the public school out of business leaving a rural population completely dependent on decisions made at a single PRIVATE company. Wow. That leaves them REALLY vulnerable. What do you do then? Start a public school? Start over?
http://www.cleveland.com/metro/index.ssf/2014/09/the_95_fees_that_charter_schools_pay_white_hat_go_before_the_ohio_supreme_court_today.html
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From what I’ve been reading for some time now is when a private sector Charter takes over a former public school site, they also get the title to the property—they own it and it didn’t cost them a cent.
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Lloyd,
You raise an interesting question. If a “trade secret” is associated with a failed product, which only exists in the marketplace because it’s propped up by politicians, does the trade secret have commercial value, warranting protection?
If legally, monetary value is required for trade secret protection, will the claims of a failed education management company, rest on the company’s reputation for political influence, rather than its product?
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In Newark, they are selling public schools for reportedly below market prices.
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I think it’s all part of the con.
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NJTeacher,
David Sirota published an important article about pensions and Chris Christie’s wife, yesterday, in International Business Times.
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There are several issues being jumbled together in the ProPublica story, this post, and this comment thread. Not unrelated, but certainly distinct. One issue is about management contracting: whether it has a substantial negative impact on financial transparency, whether charters should be permitted to do it at all, whether they should only be permitted to contract with nonprofit management companies, etc. Another issue is about financial reporting: what kind of information and detail should charter schools be required to report publicly? Another issue is about auditing: What agencies should have audit authority over charter schools, what should the scope of that authority be, should that authority extend to contractors, etc.?
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Flerp, I doubt you’d think it was a good idea for a “private contractor” nursing home that gets government money to be able to refuse to let anyone look closely at their financial records. Or a “private contractor” daycare center. Why would anyone fight transparency? Especially when it comes to schools where children spend an inordinate amount of time each day.
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Often to the dismay of my family, I look at legal issues like a lawyer. Imagine that you’re a lawyer representing a private contractor that operated nursing homes and received public funding. Your client calls you up and says, “We’ve been asked to let some people look closely at our financial records. Is it a good idea to agree?” Should you say, “Yes, of course it’s a good idea, why would anyone fight transparency?” Or should you say, “That depends. Who’s requesting to review the records? Is it the government or a private entity? What government agency? Federal, state, local? Criminal or civil? What kind of financial records are they asking for? Why are they asking for it? Did you get a phone call or did you get a document request or did you get a grand jury subpoena? Let me look into what the law says and I’ll get back to you in a couple days. In the meantime, don’t do anything, and call me if anything comes up.”
To be clear, you should respond with the latter set of questions. It may turn out that you advise your client to agree to produce all the documents, or to agree to produce some of them, or to agree to produce none of them. But you don’t know what your client’s rights are and what the law is until you take the question really seriously.
So, why would anyone fight transparency? Ask anyone who’s been audited by the IRS. The fact is that there are proper requests for information, improper requests for information, and everything else in between.
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Exactly NYC;)
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My version on part of the charter/choice/privatization mindset…
Charters are public schools. Just like the “traditional” [aka “government monopoly”] public schools. Don’t pick on them. Sure, there’s one or two or three that aren’t what they should be [aka “mom-and-pop” charters] and they should be shut down. But, on the whole, they’re more betterer and more innovativer and more choicer than your typical neighborhood public schools [aka “factories of failure” and “dropout factories”]. And your children can learn English real gooder too if they attend them.
Why so A#1, you ask? Because they don’t have to follow all those burdensome, useless and distracting rules that traditional public schools follow. They’re blazing new trails of creative disruption, turning the entire world of teaching and learning upside down. And it’s all for the good… and the good of the kids, I might add…
A prime example. None of that waste of money, time and effort entailed by blindly following stuffy inefficient education models created by pointy headed profs in those sub-par teachers colleges and such. No, spending lots of $tudent $ucce$$ on advertising and high CEO salaries and such makes a direct impact on student achievement and proficiency and performance!
Openness? Transparency? Accountability? In the same sentence with “public monies”? Just goes to show that you are against parent “choice” to pick and select among a host of Centres of EduExcellence that offer a host of “blended earning” opportunities.
Er, make that “blended learning” opportunities. And don’t ask me why I made that mistake. I should have known better since the Watergate days when that whole can of worms came out because two anti-American reporters heeded the advice to “follow the money.”
Let me repeat. This conversation shouldn’t devolve into some teacher thug discussion about money and such. How can those overpaid lazy bums ever justify turning our eduproduct sales pamphlets into such drivel?!?! That’s just goes so much against the “new civil rights movement of our time” that is fighting [with others’] tooth and nail against the “soft bigotry of low expectations.”
End of what is not a parody.
Let’s get real. Not Rheeal, even in a Johnsonally sort of way…
There’s one standard by which all the heavy hitters of the self-proclaimed “education reform” movement judge failure or success. The bottom line. It’s the metric that is, well, not just everything, but the only thing.
Don’t always need to cite an old dead Greek guy about the rheephormers:
“The two most beautiful words in the English language are ‘cheque enclosed.’” [Dorothy Parker]
😎
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They’re doing this completely bizarre political dance in Ohio, pretending they’re “getting tough!” on regulation.
It’s just complete nonsense. Three groups of charter promoters made some “suggestions” for new regulation. I have no idea why they’re writing their own regulations, but that’s another issue.
This was the response from the auditor:
“Ohio Auditor Dave Yost, a school-choice supporter, has identified charter schools as having the highest incidence of misspending among agencies under his purview.
“This report does a good job of pointing out where Ohio’s governance of community schools doesn’t work,” Yost wrote in a news release.
Read the suggestions. They have absolutely nothing to do with either financial reporting or “misspending” They won’t fix the problem. The auditor MUST know this. Yet he endorsed the proposed regs written by the charter promotion groups. It’s just a game. It’s purely political BS. It doesn’t reach the financial reporting issues, AT ALL.
http://www.ohio.com/news/break-news/ohio-charter-school-advocates-say-they-need-tougher-standards-1.550419
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This is O/T but why do ed reformers always promote photographs of kids in rows staring at screens?
It just adds to the impression that they want schools to be creepy, grim places where everyone tests all the time.
With all the money they spend on marketing one would think they’d get a clue. I think it’s a class thing, where they imagine we’re all like “wow! computers!” My 6th grader won’t be fooled by this ruse. He knows a standardized test when he sees one.
https://twitter.com/parccplace
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Remember, charters act like/call themselves ‘public schools’ only when it is expedient. Good suggestion in one of the comments here to change the law so that accountability measures and transparency requirements are same for regular public & charter schools.
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Yesterday, the Massachusetts state auditor, Suzanne Bump, released her audit of charter schools in the state. Below is a link to the press release:
http://www.mass.gov/auditor/news-and-updates/press-releases-2014/bump-state-needs-to-improve-charter-school-data.html
Here are some of the key findings:
DETAILED AUDIT RESULTS AND FINDINGS WITH AUDITEE’S RESPONSE
Audit Findings
1. The Department of Elementary and Secondary Education’s charter school waitlist information is not accurate.
2. DESE has not developed an effective process to ensure the dissemination and replication of charter school best practices to other Massachusetts public schools.
3. Key student and educator data for charter schools and sending districts may not be reliable, and data systems lack adequate data security controls.
4. DESE renewed school charters in an inconsistent manner.
How surprising!
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For full report, see here:
Click to access 201351533c.pdf
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