Jim Hall, whom I wrote about in the previous post, has uncovered many charter scams in Arizona. Here is his latest report. Open the link to read his attachments and documentation.
Arizonans for Charter School Accountability
arizcsa1000@gmail.com
602-343-3021
The Consequences of Unregulated Charter Schools:
The Leona Group LLC Reaps Millions in Real Estate Profits While Arizona Taxpayers (and Students) Foot the Bill
Arizonans for Charter School Accountability recently released two reports on charter school classroom spending in 2016 (see links below) finding that 191 Arizona charter schools are efficiently run and spend more money in the classroom than on administration and facilities combined. A majority of charter schools, however, spend less on classroom instruction than on administration and buildings. Imagine Inc. and the Leona Group LLC manage the majority of schools spending more on administration and facilities than in the classroom.
This report focuses on the Leona Group LLC which manages 25 schools in Arizona (and over 60 schools total in five states) to try to understand why Leona Group LLC managed schools spend so little on classroom instruction.
These were the key findings:
In 2007, Bill Coats, the sole owner of the Leona Group LLC, sold 10 schools owned by Leona Group LLC to a non-profit foundation Coats created in 1998, the American Charter Schools Foundation ACSF), for $33,890,485 more than their market value.
Bill Coats maintains the same management control over the schools as he had when Leona Group LLC owned the schools but now has set management fees that are not based on student enrollment.
ACSF schools have declined in enrollment by 25% since their purchase in 2007.
Between 2007 and 2016 overall instruction spending in ACSF schools has declined from $2090/pupil to $1455/pupil while facilities costs increased from $1455/pupil to $2479/pupil.
The real estate windfall Bill Coats received in 2007 by selling schools to his own foundation has caused ACSF to cut classroom spending to among the lowest rates of any school in Arizona – to fund the excessive mortgages.
Jim Hall, founder of Arizonans for Charter School Accountability, stated “ The Leona Group LLC has made tens of millions of dollars selling schools to their own non-profit foundation for double their market value – and still retain complete management control. The schools now spend most of their budgets on mortgages and management. Arizona doesn’t monitor charter school spending so this kind of waste and abuse goes unnoticed.”
Hall continued, “ The Arizona Auditor General needs to monitor charter spending and the Arizona Board for Charter Schools needs to sanction charter schools that divert public funds to corporate profits at the expense of children in the classroom.”
Diane Ravitch's blog 