Robert Cotto, Jr., is an elected member of the Hartford, Connecticut, Board of Education. In this article, he describes the outlandish fees paid to charter management organizations.
“Roughly 10 percent of a charter school’s budget can go toward management fees. For example, the New Haven-based CMO called Achievement First charged Achievement First-Hartford Charter School a $1.14 million management fee in 2013-14. The state provided Achievement First-Hartford charter schools more than $11 million to operate. So about 10 percent of that state funding went to Achievement First the CMO, not the charter school in Hartford, which ended the year with a surplus…..
Multiply this fee by the four Achievement First charter schools in Connecticut, and Achievement First Inc., the CMO, walks away with about $4.45 million in fees.
Not all charter schools are managed by CMOs or pay these management fees. In 2012-13, most charter schools in Connecticut did not pay a “charter management fee.”
If CMOs won’t show us the money, then maybe we don’t need CMOs or their fees. Charter schools can manage without them.
Diane Ravitch's blog 
How timely. Seattle’s charter school fans are already whining about strict financial rules.
http://www.seattletimes.com/seattle-news/education/charter-school-backers-resist-states-traditional-financial-reporting-rules/
This is exactly the reason why they shouldn’t get their way.
Hope the WA State legislature and the charter board and the citizens of Washington are paying attention. Tax dollars, people.
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This is very reminiscent of the fees going to the big investment banks for managing “investments” (eg, junk derivatives)
These management companies are what drive the bubbles.
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Still waiting for our resident charter supporters to come and defend these practices. Raj? WT? Anyone?
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Always glad to find another Ionesco fan on this blog:
“It is not the answer that enlightens, but the question.”
Perhaps another question would be: how much do those hefty management fees motivate the heads of those CMOs?
You know, by stealing resources from the classroom and the kids and paying teaching and support staff McJob wages?
Apparently that is a great motivator—for smash-and-grab artists that put their interests ahead of everyone else’s.
Yes. Rheeally!
For people with a moral compass and the mission in life to help others and make the world a better place?
No. Really!
Thank you for your query.
😎
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They’ll respond that most charter schools are “non profits”, which means absolutely nothing.
I love how they’ve been able to redefine “public” as meaning “nonprofit”
My health insurance company is a not for profit. In no rational, ordinary definition is it “public”. It’s an absolutely meaningless all-purpose answer to “where is the money going?”
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Needing to confirm to the IRS reporting requirements for nonprofits is far from “nothing.” I can’t speak to what goes on in Connecticut, but in New York, charter schools are also required to undergo annual financial audits like this one, which will answer your questions about what services the management organization provides, and how much it costs: http://www.newyorkcharters.org/wp-content/uploads/Achievement-First-Apollo-2013-14-Audit-Report.pdf.
It’s nearly impossible to figure out how much of the per-student funding at my children’s schools and other DOE schools is spent on centralized management, administrative functions, and overhead, but I would be shocked if it is appreciably less than 8-10% of overall DOE expenditures. The nonprofit management organizations in New York are providing many of the same services as a school district, and as commenters on the Cotto piece noted, this is coming out of funding that is significantly less than what district schools get.
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Tim you are right on. but I would like to add to Tim’s comment. The IRS reporting requirements are national, and every charter school in every state must comply.
But try and try again, it is very difficult to find the administrative expenses in a public school district. It may be there, but buried deep.
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I think the charter management companies should have to present a detailed accounting of what exactly they’re doing to earn these fees.
That should also be true of “authorizers”.
I have no idea why this is even controversial. It is a no-brainer.
It’s amusing because of the (alleged!) reliance on “data” in ed reform. Except money. They don’t track that “data”.
I have no idea how many people are employed as “authorizers” in Ohio, who they are, what value they add, what they make, none of that- yet the public is paying ALL of them.
Why did ed reformers believe that it made sense to add a whole new level of administrators to public education? Even if they’re subcontractors to the contractor charter, why do we need so many managers/executives?
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Can we also get some public employee to look into whether the national charter chains are using state education money collected in one state to expand into another state?
This is a basic question and I have never seen it answered. Can a NY charter take NY per pupil funding and transfer it to expand CT operations?
Obviously this would put public schools at a huge competitive disadvantage because they can’t expand into other markets.
Reporting how much they COLLECT in a state subsidy is not “disclosure”. We need ordinary financial reporting that details every dime they collect (from any source) and where every dime goes. This is a radically different way to fund schools. People should know how it works and they can’t know “how it works” if we get this ridiculously opaque reporting.
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That was one reason WA State resisted K-12.com for so long. Because WA tax dollars went out of state. But they found some legislators to buy and weaseled their way in. I’m sure the charters are doing the same.
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It’s really a profound question. You can’t ask public schools to “compete” with a contractor who can use school funding to expand into new markets and leverage money collected in one state or district to prop up their system in another state or district.
I actually think that would be as unpopular in OH as it (apparently) was in Washington.
We’re all paying state auditors. Why don’t they ever ask any questions? “How much money comes in and where does it go?” is really rock-bottom.minimum reporting.
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It’s really interesting how charter supporters have made ordinary financial reporting their hill to die on.
“Washington state wants charter schools to follow the same rules as other public schools when it comes to keeping their budgets.
But what were supposed to be unremarkable changes — extending to charter schools more than 100 pages of financial rules that already apply to other schools — ended with unexpected backlash against the state Office of Superintendent of Public Instruction (OSPI) last week.
Charter proponents say the regulations would give OSPI too much oversight over the publicly funded but independently run schools, which voters here approved in 2012.”
Why is this such a huge sticking point? We can hardly compare public schools to charter schools if we don’t have any financial reporting from charter schools.
If we privatize the system surely we deserve to know sources of funding, whether funds are fungible, how much executives are paid, etc. Privatization could be a bad deal for citizens.
“This was, for us, just something that we never expected anybody to have an issue with,” Berge said.
Apparently he hasn’t noticed they fight financial reporting requirements in every state.
http://linkis.com/www.seattletimes.com/pOy5g
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Yup, private schools typically manage themselves, without paying fees to their own separate companies for that. It’s a shell game and in my experience, the companies that play shell games do so in order siphon increased public funds, to escape accountability regulations and to dodge higher taxes.
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Wouldn’t it be so funny if charter schools started to organize?
“Education in Youngstown may once again face changes- but this time from two charter schools. Summit Academy and Summit Academy Secondary Schools, in Youngstown, announced on Friday the decision to form their own teachers union.”
All of DC would have to RUSH to abandon them.
They’d all discover VOUCHERS for private schools are the way to go 🙂
http://www.wfmj.com/story/29200245/two-youngstown-charter-schools-seek-unionization#.VWx6UMsNvQs.twitter
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For a certain sub-set of so-called reformers, charter schools were never anything but the camel’s nose under the tent for vouchers, anyway…
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I agree. I expect the Obama Administration to announce vouchers are now officially “progressive”.
It’s like the lobbyist-written trade deal. The President announced it was “progressive” and that makes it so, apparently.
I just hope Democrats pay politically for privatizing public schools. There should be some accountability for this. I know the public will regret it, so then the question becomes “who is responsible?” and the answer is “Democrats”.
Maybe we’ll get a new political Party out of it to replace the bipartisan Money Party who own DC.
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Absolutely: Obama was given the nod precisely because he was expected to neutralize the Left wing of the Democratic Party.
Mission Accomplished!
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“Started” to organize?! In Chicago, our union (Chicago ACTS) represents 25% of charter teachers, and we’re growing like crazy. On Wednesday, three more schools (Urban Prep Academies) are likely to vote yes, bringing our membership to almost 1,000.
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Congratulations, Brian, on your successful organizing.
I hope you have no illusions about the likelihood that, once having reached a certain threshold of union density, the private funding for your schools starts to dry up.
Once in a union, you’re no longer useful to these people, and they’ll discard you and your students in the flash of an eye.
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Yeah, I know. The amount of illusions I’m under about charter operators is pretty small.
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The arrogance, again, is amazing. The whole country became aware that Ohio charter schools are not regulated. They only became aware of this because the constant media reports made it impossible to ignore.
The charter lobbyists are now seating panels on deregulating PUBLIC schools. I guess this is to “level the playing field” so we can have near-weekly public school scandals?
“For the past year, Ohio policymakers have been grappling with the issue of deregulating public schools. But what does deregulation really mean—and how should policymakers go about doing it?
Join us in Columbus on Thursday, June 11, 2015 for the release of Fordham’s newest report, Getting Out of the Way: Education Flexibility to Boost Innovation and Improvement in Ohio. The report highlights the key issues policymakers need to consider when loosening the regulatory grip on public schools.”
They DESIGNED Ohio’s failing charter sector. Frankly, they suck at “governance”. Now they want to ruin solid public schools by imposing this think-tank created “governance system” on public schools?
http://edexcellence.net/events/ohio-education-speakers-series-event-deregulating-public-education
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Posted a link to the Cotto piece http://www.opednews.com/Quicklink/Robert-Cotto-Jr–Follow-t-in-Best_Web_OpEds-Corruption_Education_Ferreting-Out-The-Truth_Problem-150601-59.html#comment547550
If you follow my quicklinks,
http://www.opednews.com/author/quicklinks/author40790.html
you will see that in keeping with the OEN mission for truth in this age of supreme mendacity, I publish links to pieces that discuss truth, and I frequently write about the charlatans who offer us Magic Elixirs -no evidence required, where I quote D. Willingham who explains why education is away with charlatans:
http://www.opednews.com/articles/Magic-Elixir-No-Evidence-by-Susan-Lee-Schwartz-130312-433.html
“In education, there are no federal or state laws protecting consumers from bad educational practices. And education researchers have never united as a field to agree on methods or curricula or practices that have sound scientific backing. That makes it very difficult for the non-expert simply to look to a panel of experts for the state of the art in education research. There are no universally acknowledged experts. Every parent, administrator, and teacher is on his or her own. “”The field of education is awash in conflicting goals, research “wars,” and profiteers”
Diane Ravitch has this to say about
Separating Fact and Fiction About Charter Schools.
http://www.opednews.com/Quicklink/NEPC-Separating-Fact-and-in-Best_Web_OpEds-Charter-Schools_Diane-Ravitch_Education_FICTION-150224-564.html
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