US News & World Report and Newsweek ranked BASIS charter schools in Arizona as the best high schools in the nation, without noting their dramatic attrition rates and demographics that heavily favor whites and Asians.

But a new audit shows that BASIS is in deep financial trouble.

“The globally renowned BASIS charter school system is nearly $44 million in the red, according to a recent report from a Phoenix-based watchdog group.

“The international charter chain, whose first campus opened in Tucson in 1998, lost nearly $12 million in net assets last fiscal year alone, according to an analysis from Arizonans for Charter School Accountability. BASIS rejects the report’s findings.

“Jim Hall, the accountability organization’s founder, generated the report based on audit documents available on the Arizona State Board for Charter Schools’ website. The Arizona Daily Star confirmed the deficit claims independently with the charter board audit.

“Despite its multimillion-dollar deficit, BASIS Charter Schools, Inc., did retain about $17.2 million in cash flow by the end of the last fiscal year, according to the audit. Hall argues this was possible because BASIS refinanced many of the loans it has taken out over the years to keep its 22 Arizona campuses up and running.”
The charter chain denies that it’s in financial distress, but about 60% of its expenses are payments to the for-profit corporation that operate the chain and nearly 11% is spent for administration.