Search results for: "charter fraud"

 

Virtual charter schools are a disaster for students, but a honey pot for their operators—that is, until they get caught and face the music and possible jail time.

John Thompson describes the epic fail of the EPIC virtual charter in Oklahoma. 

Ghost students, straw teachers, parent bonuses. What a scam.

An Oklahoma State Bureau of Investigation revealed that the co-founders of the state’s largest virtual charter school system, Epic Charter Schools, David Chaney and Ben Harris, split at least $10 million in profits from 2013 to 2018. They allegedly recruited “ghost students” (who were technically enrolled but received minimal instruction from teachers) from homeschools and sectarian private schools “for the purpose of unlawfully diverting State Appropriated Funds to their own personal use resulting in high NFAY [not full academic year] rates and low graduation rates for the students.” 

Epic established an $800-to-$1000-per-student learning fund for students who did not enroll in a public school. These students were dubbed “members of the $800 club,” and assigned to “straw teachers,” who “would receive additional pay in the form of bonuses which included student retention goals,” while “those who dropped students would see a decrease in pay.”

A search warrant cited parents who received money but admitted they had no intention of receiving instruction from Epic. One family withdrew its ten children from public schools,  received $8000, and allowed the kids to ride horses instead of attending school. 

Does anyone have a link to Betsy DeVos’ Senate confirmation hearings when she rattled off the impressive but false statistics about virtual charter schools? It turns out they are the quintessential fraudsters of the Disruption Movement.

 

 

 

We learned recently that Oklahoma officials have charged the EPIC online charter with fraud, alleging that its leaders siphoned off $10 million for themselves while inflating enrollments of ghost students.

Schneider does her specialty investigation of EPIC’s tax returns and discovered that the corporation was created in 2009 for a variety of purposes, but not education. It eventually amended its filing to add education. In other words, the founders were entrepreneurs in search of a mark.

In 2010, it had revenue of $60,000.

After it went into the charter business, EPIC hit pay dirt. In 2016, it’s revenues exceeded $29 million.

Is this a great country or what?

 

 

Indiana is one of the state’s that has been all in for choice. One of the choices pushed by former governors Mitch Daniels and Mike Pence is Virtual Charter Schools. These are online schools that allegedly enroll home-schoolers or students who prefer not to attend a Brick-and-mortar school.

Study after study has found that these online schools have high attrition, low test scores, and low graduation rates. However they are very profitable since their operators are paid far more than their actual costs.

The name of their game is enrollment, since their costs decline as enrollment grows, and they must constantly replace those who drop out.

Unfortunately, the incidence of fraud is high since the online schools are seldom auidited.

Indiana is currently trying to recover $40 million from two online charter corporations and their authorizer, which was stolen by inflating enrollments.

Indiana will try to claw back around $40 million from two virtual charter schools and the public school district charged with overseeing them after an investigation found the charters inflated student enrollment counts and defrauded the state for the last three years.

Daleville Community Schools is the charter authorizer, charged with oversight, for Indiana Virtual School and Indiana Virtual Pathways Academy. A state audit found that the schools inflated their enrollment counts, which are used to determine how much money the schools receive from the state.

A report, provided by Daleville, showed that hundreds of students counted in the online schools rolls were never assigned a single class. In the 2016-17 school year, 740 students took no classes in the first semester and 1,048 took no classes in the second semester. 

Many students were re-enrolled by the school, even after they had left. In at least one case, the school re-enrolled a deceased student, said State Examiner Paul Joyce.

Joyce told the State Board of Education at its meeting Wednesday that the schools’ action could be considered criminal.

Is it a novel idea to treat the theft of millions of dollars as “criminal?” That certainly did not happen in Ohio, where the operator of the Electronic Classroom of Tomorrow (ECOT) closed his doors rather than repay the state some $60 million in inflated charges. Over the years, ECOT collected nearly $1 billion, and there were no audits or efforts to recapture public funds until the past year. No criminal charges either.

You know the old saying: If you steal a fortune, you are treated as a gentleman, if you steal a loaf of bread, you go to jail.

 

The California Legislature is considering four bills to reform the state’s massive charter school industry (1,300 schools, mostly unregulated and unsupervised). One of the bills would prohibit school districts from authorizing charters in other districts. The following story is a classic example of rural school districts authorizing online charters in San Diego and Los Angeles, solely to get the commission attached to each student. In this case, the online charters were cash cows for their owners. [A personal aside: Last February, I was in Newport Beach, California, having breakfast at a hotel. The man at the next table was loudly discussing his schools with someone who was selling athletic services, $5 a student. When he got up to leave, I asked him if he was “in the charter school business.” He said, “Yes,” and said he owned 40 schools under six different corporate names. I asked him his name. He said, “Sean McManus.” I should have asked him to join us. He is one of the key figures in the following article.]

The San Diego Union-Tribune reports that eleven people connected to online charter schools have been indicted for “criminal charges of conspiracy, personal use of public money without legal authority, grand theft and financial conflict of interest.“

The online charters operate in San Diego and Los Angeles, but were authorized by other districts that get a slice of the revenues. This is one of the corrupt practices that have been rampant in California, where lax state law allows sharp operators to get public money and cheat students with no consequences. The Legislature is currently debating a proposal to stop allowing District A to authorize a charter in District B, a practice that is mercenary and predatory. Until now, the powerful California Charter Schools Association—enriched by billionaires like Reed Hastings and Eli Broad—has fought all accountability for charter schools.

At the center of the allegations are leaders of the charter school management corporation A3 Education, a Newport Beach corporation whose leaders control 13 charter schools across California, according to an indictment filed May 17.

A3’s chairman, Sean McManus, and president, Jason Schrock, essentially owned and operated the charter schools throughout California at the same time that A3 contracted with those schools, according to the indictment.

McManus and Schrock operated multiple businesses that charged their own charter schools millions of dollars for services. Then they channeled money from those businesses into their own charitable trust and personal bank accounts, according to the indictment.

A3 Education and the businesses affiliated with McManus and Schrock together have invoiced at least $83.3 million from the 13 charter schools, according to the indictment.

From the affiliated businesses, at least $8.18 million went into personal bank accounts, some in Australia, and into charitable trust accounts for McManus, Schrock and their wives, and $500,000 went to a family member of McManus, according to the indictment.

McManus and Schrock also used $1.6 million of A3 Education’s funds to buy a private residence for McManus in San Juan Capistrano, the indictment states.

Also according to the indictment, six people, including McManus and Schrock, conspired to collect state money for students who were listed as being enrolled in Valiant Charter Schools but were not receiving services.

The two Valiant schools will close permanently on June 30. Several thousand students will need to find new schools. The San Diego online charter was authorized by the Dehesa School District, and the one in Los Angeles was authorized by the Acton-Agua Dulce Unified School District.

The children were not assigned to teachers who have state-required professional certificates, the indictment said. The students were not in contact with the schools or provided with educational services during the summer months, as some of the co-conspirators claimed, according to the indictment…

Also indicted is Nancy Hauer, who is superintendent of Dehesa School District, which authorized several charter schools, including Valiant Academy of Southern California. The Dehesa district office did not immediately provide a comment Tuesday.

Also among the indicted is Steve Van Zant, a former Mountain Empire Unified superintendent who three years ago pleaded guilty to violating conflict-of-interest laws, after he brokered deals with charter schools to operate in other school districts, prosecutors said at the time.

Valiant Academy had 43 students two years ago, 726 last year, and 2,250 this year. It’s academic performance was so poor that even the California Charter School Association recommended that it be closed.

Betsy DeVos says that parents always know what’s best. Why were they enrolling their children in these failing “schools.”?

 

 

 


 

Jane Nylund, a parent activist in Oakland, wrote this incisive overview of charter frauds in her district and submitted it to the Task Force reviewing the California charter law. Please copy and forward to the Task Force at:

chartertaskforce@cde.ca.gov

She writes:

For fifteen years as a parent, volunteer, and employee of Oakland Unified, I’ve been witness to what is now a full blown privatization movement in Oakland under our “portfolio district” model. A movement designed to crush our real public schools and privatize them; a movement to close our schools and gentrify our neighborhoods. A movement to allow outside interests and corporations to feed at the trough. And the current laws in California that allow this to happen, unchecked and unfettered. And the absolute failure of any of it to collectively improve the lives of our most vulnerable children. 

 The time for this damaging experiment on our children is over. Stop clutching at the billionaires’ purse strings, while at the same time declaring that more choice is the answer. Here’s why it isn’t.

 Choice in Oakland-Do you want fries with that?

What does choice in Oakland mean? The model here isn’t much different than saturating the poor neighborhoods with cheap fast food. Oh, there’s choice all right-McDonalds, Burger King, KFC, or Taco Bell. Plenty of choice, take your pick. How about a nice juicy steak? Forget it, you don’t need that choice, but here’s some other choices for you. Poor nutrition that fills you temporarily, but ends up starving you of any real sustenance. Saturating neighborhoods with charter schools is the same business model. I heard an East Oakland resident say, in a public meeting, that charter schools were like having drug dealers on every corner. Keepin’ it real….

 Scandals? You want ’em, we got ’em

 Scandal #1-American Indian Charter

The CEO of AIMS, Ben Chavis stole $3.8M from his schools in rent and paid it to his own leasing company which held the leases for his own schools. Self-dealing Gone Wild. He is in jail in North Carolina awaiting trial for money laundering and mail fraud. You’d think the school would be shut down after that? Nope, the school board wilted under the facade of those amazing test scores, gamed in part by shutting out African Americans and SPED from the AIMS schools, as well as having obscenely high rates of attrition. 

https://www.eastbayexpress.com/oakland/turmoil-returns-for-charter-schools/Content?oid=9074129  

 Scandal #2-Bay Area Technology School

A Gulen school run by Turkish teachers and a Turkish school board. In a squabble worthy of a B-rated movie, the principal was forced out but somehow managed to flee to Australia with $400,000 of our hard-earned tax dollars in his pocket. Nice gig if you can get it. 

https://www.eastbayexpress.com/oakland/former-principal-alleges-oaklands-baytech-school-was-source-of-funding-for-gulen-movement/Content?oid=19390167  

 Scandal #3-Oakland School for the Arts

Full disclosure-I’m a huge arts supporter, and I know plenty of parents who support the school and who have kids there. It’s not the program; it’s the enrollment policy. OSA is an experiment in what happens when a school supported by our former governor is allowed to select its own student body. OSA is now the second wealthiest school in Oakland and has virtually no ELL. How can that possibly happen when the school has a lottery? Easy. You have the kids do an audition and allow the kids into the lottery based on the results of the audition. Private schools do that. Is it discriminatory? Yes, the ACLU said as much.  Does it violate charter law? Yes. Has anyone done anything about it. No, because of big $$$ and the support of Jerry Brown and Friends. Alternatively, Jerry could have supported more arts funding in public schools instead of opening OSA. Food for thought….

 Scandal #4-Castlemont Junior Academy and Primary Academy

This was a script that practically wrote itself. Open charters right next door to the neighborhood elementary, Parker. Next, install a OUSD board member, James Harris on the charter board, as well as Yana Smith, the wife of former OUSD Chief of Schools Allen Smith. While it might have been legal, the perceived conflict of interest was breathtaking. Lastly, watch in amazement as the charters implode a few months later, due to low enrollment. Parker, the real public school has to enroll approx. 85 children from the elementary charter mid-year. It doesn’t get more disruptive than that. Startup funding? Gone….

https://www.eastbayexpress.com/oakland/two-highly-touted-oakland-charter-schools-quickly-closed-andmdash-and-now-owe-the-district-money/Content?oid=5091277  

 Scandal #5-Aspire Eres and the annexing of the Derby Parcel

When Reed Hastings says “Jump!”, Aspire says, “How high?” Aspire, in a bid to purchase city-owned public land for charter school expansion, tried to negotiate a backroom deal with the city. The expansion had not even been approved by the school board, but that’s okay because Reed Hastings doesn’t like elected school boards anyway. They just get in the way of his personal business. Public school activists found out, organized the public, pushed back hard, and thwarted the deal. 

https://www.eastbayexpress.com/oakland/oaklands-exclusive-deal-to-sell-city-owned-land-to-charter-school-draws-opposition/Content?oid=15872497  

 Scandal #6-the 100% Grad Rate myth

This is one of my personal favorites because of the inevitable comparison of district schools’ to charter schools’ performance. How many more times do we need to see grad rates/test scores stats tossed around on social media, popping up like so many toxic mushrooms. How can a charter school claim 100% (or close to it) grad rates when they lose 40, 50, or 60% of their children in high school? Easy, charters typically don’t backfill. Real public schools backfill; they fill that seat as soon as a student wants it, at any time. Any student, not just the easy ones.

 Scandal #7-Charters are superior to district schools because of their amazing test scores! (Marketing 101)

See Scandal #6. Until charters can claim that they educate the same number of FRPL, ELL, and SPED kids, and also have the same number of suspensions/attrition, there is no valid or fair comparison here. The student populations served (or not) are usually significantly different.

 Scandal #8-the “rightsizing” myth

Portfolio models “rightsize” (translation:downsize) by closing mostly district schools. But the schools don’t close; they are privatized into charters via Prop 39. Out of 18 of the last Oakland district school closures, 14 were converted to charters. This scandal illustrates the utter lack of local control on any charter openings/closings. Easy to open, nearly impossible to close, favoring charter growth by design. OUSD admitted that closing schools doesn’t save money, and yet they (Walton/Bloomberg-bought board) push the narrative constantly. It’s a mantra that’s growing stale but refuses to die.

 Scandal #9-the “high demand” for charters myth

See Scandal #8. How to create demand? Close your neighborhood elementary schools, which then feed into the middle schools (demand dries up there as well). Then, open a charter right near these same schools. Doesn’t take a genius to see how that will turn out. Ask the students at Roots International how they feel about their neighborhood school closure. But our charter-friendly ($$$) school board fully supports this portfolio model; there are charters right around the corner that former Roots students can attend instead. Instant charter demand creation.

https://www.kqed.org/news/11721015/the-big-fight-over-a-small-school-in-oakland-what-you-need-to-know  

 Scandal #10

The fact that all these scandals exist at all, and that public school advocates, as well as tenacious local reporters, have to do the important work of digging up the information and presenting it to the public. This is what accountability looks like in Oakland and the rest of California. We are getting tired of doing the job that the Office of Charter Schools is supposed to be doing, but doesn’t. And this list is far from exhaustive; it’s likely just the tip of the iceberg, because of the lack of transparency.

 Our school district loses $57M a year to unfettered charter expansion. It’s time to get back to some no-nonsense approaches to this problem such as real local control, as well as including impact to district finances. Charter schools don’t have the right to expand just because it’s what the Waltons and Reed Hastings want. The Waltons don’t send their children to Oakland public schools.  District schools aren’t offered the same expansion opportunity and if they were, Oakland Technical would be the size of a small college by now. This failed experiment on our most vulnerable children must end, and I implore the task force to make the recommendations that will serve the needs of ALL students and stop supporting an agenda that clearly favors charter expansion, the theft of taxpayers’ dollars, and not much else. The time is now, and if not now, when?

 Thank you for your attention in this matter.

Pennsylvania has many cyber charters. They are all failing schools. The legislature doesn’t care. Two cyber charter operators were arrested and convicted for stealing millions of dollars. One of them–Nicholas Trombetta– is awaiting sentencing for tax evasion on the $8 million he stole from the cyber charter he founded (Pennsylvania Cyber Charter School), the other–June Brown, founder of two cyber charters–was convicted but not sent to jail because the judge accepted her plea that she was too old and frail to be incarcerated (she is younger than me). Trombetta committed a crime by evading taxes, but stealing $8 million from his cyber charter was not a crime under lax Pennsylvania law, according to the article cited here.

Greg Windle writes here about the failure of the Legislature to reign in cyber charter corruption, fraud, waste, and abuse of taxpayers’ dollars.

Even choice advocates are embarrassed by cyber charters, but they keep on going, collecting tax dollars for rotten services.

No cyber charter school in Pennsylvania have ever received a passing academic score from the state, and very few have come close, according to information recently highlighted in a report from the office of Democratic State Rep. James Roebuck of Philadelphia.

Roebuck and other House Democrats have assembled a package of bills that would further regulate charters by reforming how they use reserve funds, rules for leasing buildings, special education payments, contracting, the teacher evaluation system, disclosure in advertising, school building closures, and the transfer of school records. The package would not single out cybers, but other legislation has been introduced that would reduce their per-student reimbursement.

Pennsylvania has 13 cyber charters enrolling more than 34,000 students, or 10 percent of all the cyber students in the country.

These schools are authorized not by local districts, but by the Pennsylvania Department of Education. But districts must send per-pupil payments to cyber charters for each local student they enroll, and the payments are the same as for brick-and-mortar charters, even though cybers have fewer expenses.

This has proven frustrating not only to the districts and other proponents of traditional public schools, but to several groups that favor school choice and charters…

No cyber charter school in Pennsylvania have ever received a passing academic score from the state, and very few have come close, according to information recently highlighted in a report from the office of Democratic State Rep. James Roebuck of Philadelphia.

Roebuck and other House Democrats have assembled a package of bills that would further regulate charters by reforming how they use reserve funds, rules for leasing buildings, special education payments, contracting, the teacher evaluation system, disclosure in advertising, school building closures, and the transfer of school records. The package would not single out cybers, but other legislation has been introduced that would reduce their per-student reimbursement.

Pennsylvania has 13 cyber charters enrolling more than 34,000 students, or 10 percent of all the cyber students in the country.

These schools are authorized not by local districts, but by the Pennsylvania Department of Education. But districts must send per-pupil payments to cyber charters for each local student they enroll, and the payments are the same as for brick-and-mortar charters, even though cybers have fewer expenses.

This has proven frustrating not only to the districts and other proponents of traditional public schools, but to several groups that favor school choice and charters…

It’s been a difficult school year for many U.S. cybers. Ohio’s largest chain was forced to close mid-year, and others closed down in Georgia, Indiana, Nevada, and New Mexico. In the past, it has been rare for states to close cyber charters despite low achievement across the sector and several financial scandals…

Of the 43 states that allow charter schools, only 35 allow cyber charters. The eight that do not are Delaware, Maryland, Massachusetts, New Jersey, New York, Rhode Island, Tennessee, and Virginia. Only 23 of the states that allow cybers have actually authorized any, according to the report from the National Association of Charter School Authorizers. Those states plus Washington D.C. have a total of 135 full-time cyber charter schools.

Cybers make up just 2 percent of all charters in the country.

At its peak, Pennsylvania had 14 cyber charters, more than 10 percent of the nation’s total. However, Education Plus Cyber closed in December 2015 during the state budget crisis after its bank pulled the school’s line of credit. Some staff also alleged financial mismanagement…

Out of the 13 full-time cyber charters in Pennsylvania, educating over 34,000 students, only four have come close to receiving a passing grade of 70. The rest have received the lowest rating on the state’s academic rubric every year….

Larry Feinberg has his own frustrations with cyber charters and gw attributes them to a poorly written charter school law. Feinberg has been a school board member in Haverford Township for over 20 years, is on the board of the Pennsylvania School Board Association, and co-founded the Keystone State Education Coalition — a group that advocates for traditional public education, including stronger regulations on charters.

“Every month in school board meetings, I have to approve payments to cyber charters,” Feinberg said. “Our test scores are 30, 40, 50 points higher than theirs. We never authorized any of them. … They are all authorized by the Pennsylvania Department of Education. That allows them to reach in and take our tax dollars.

“There’s just no way it can cost as much money to educate them without a building and full-time staff. So there’s huge profits to be made.”

Mark Weber, veteran teacher in New Jersey now studying for his doctorate at Rutgers, has yet another revelation of Chris Christie’s determination to place charter schools even though the community doesn’t want them.

Clifton, New Jersey, said no. That doesn’t matter. Clifton has been persistently underfunded. That doesn’t matter.

Worse, this is a charter school with serious legal and ethical issues.

Wouldn’t you know the contested charter is a Gulen school?

“More than $30 million in long-term, low-interest loans have been granted by the state to benefit the Paterson science and technology charter despite its continuing financial and academic troubles:

“In 2014, a Wall Street ratings agency downgraded the bonds issued for its expansion to junk status because the school’s revenues had fallen. Last year, Wall Street lowered its overall outlook on the bonds to “negative.”

“Tracking tax dollars spent by the schools can be difficult because of loopholes in state law:
ILearn, which is set to add a fifth charter to its chain this year, declined to answer routine requests for information about its payroll, saying that as a private contractor it is not subject to the state Open Public Records law.

“State officials said it is unclear if such charter-management organizations fall under the law, even though charters draw their funding directly from the tax-funded budgets of regular public schools. [emphasis mine]

“Is anyone seriously suggesting the Clifton BOE ought to just accept all this? That they don’t have a fiduciary responsibility to their constituents to make sure Passaic A&S and iLearn are using revenues appropriately — especially when the town’s public schools are being short-changed by the very state administration that forced them to fund this charter school?”

To make matters even more sordid, it turns out that being a charter regulator is a stepping stone to a lucrative job in the charter industry.

Bill Phillis of the Ohio Coalition for Equity and Adequacy forwarded links to Dennis Kucinich’s town hall meetings, where he blasted charter school fraud. Watch and enjoy!

Is he running for governor? Let’s hope so.

https://youtu.be/bbgnZ9LorEk

https://youtu.be/UHHaKdAuGJg

Former Congressman Dennis Kucinich, who may be thinking of a run for Governor of Ohio, launched a four-city speaking tour across the state, castigating the corruption in the charter industry at every stop.

Kucinich understands that every dollar that goes to a charter is taken away from a public school. He is the first politician who understands the shell game. Defund public schools while funding a dual system.


“Former U.S. Rep. Dennis Kucinich launched a four-city, anti-charter school tour in Columbus, Ohio on Monday, telling attendees at a press conference that “public education’s financial base is being destroyed by private, for-profit corporate interests.”

Kucinich, who served 16 years in Congress, was Cleveland mayor in the late 1970s, and ran for president in 2004 and 2008, plans to hold town hall-style forums across the state in Centerville, Columbus, Parma, and Elyria Monday through Thursday. He kicked it off by talking to reporters at the Ohio statehouse.

“When state revenue for public schools decreases because of money which goes to private for-profit charters, public school officials must make up the difference by asking local property taxpayers for more money,” Kucinich said. “It represents a deliberate, destructive undermining of the public education of Ohio’s children. What is our educational philosophy today? Let for-profit corporations exploit the mass of children by controlling the state government?”

“With that last line, he was referring to state legislators “who have accepted millions of dollars in campaign contributions from charter-school operators, notably William Lager of the Electronic Classroom of Tomorrow and David Brennan of White Hat Management,” according to the Columbus Dispatch….

According to a report released in advance of DeVos’ visit, since the 2012-2013 school year, $3,744,988 in state funding originally meant for children attending Van Wert County’s local public schools “has instead gone to privately run brick-and-mortar and online charter schools.” In turn, said the report from Innovation Ohio, “local taxpayers in Van Wert…have had to subsidize these larger state payments to charter schools to the tune of $1.4 million—money that should have supplemented the larger state aid amount but is now being used to subsidize poorer performing, privately run charter schools.”

Supporting Kucinich’s criticism, the report pointed out that indeed, “local property taxpayers in Van Wert County schools are paying $3 million more in property taxes in 2015 (the most recent available data from the Ohio Department of Taxation) than they did in 2013, which is increasing those communities’ reliance on property taxes to pay for education—a result deemed unconstitutional four times by the Ohio Supreme Court.”

According to a report released in advance of DeVos’ visit, since the 2012-2013 school year, $3,744,988 in state funding originally meant for children attending Van Wert County’s local public schools “has instead gone to privately run brick-and-mortar and online charter schools.” In turn, said the report from Innovation Ohio, “local taxpayers in Van Wert…have had to subsidize these larger state payments to charter schools to the tune of $1.4 million—money that should have supplemented the larger state aid amount but is now being used to subsidize poorer performing, privately run charter schools.”

Supporting Kucinich’s criticism, the report pointed out that indeed, “local property taxpayers in Van Wert County schools are paying $3 million more in property taxes in 2015 (the most recent available data from the Ohio Department of Taxation) than they did in 2013, which is increasing those communities’ reliance on property taxes to pay for education—a result deemed unconstitutional four times by the Ohio Supreme Court.”

Michigan has one of the worst charter sectors in the nation, according to the Detroit Free Press, which conducted a year-long investigation of charters in the state. The people of Michigan pay $1 billion a year for a sector in which 80% of the charters operate for profit, in which there is neither accountability nor transparency, in which conflicts of interests don’t matter. Billionaire Betsy DeVos and her husband Dick and other members of the DeVos family control education issues in the Republican-dominated legislature with their generous campaign contributions. Governor Rick Snyder is DeVos’s personal puppet. And the state continues to waste public money on failing schools because they are privately run. No regulation needed!

 

This is Billionaire Betsy DeVos’s idea of how education should work!

 

The Detroit Free Press writes:

 

Michigan taxpayers pour nearly $1 billion a year into charter schools — but state laws regulating charters are among the nation’s weakest, and the state demands little accountability in how taxpayer dollars are spent and how well children are educated.

 

A yearlong investigation by the Detroit Free Press reveals that Michigan’s lax oversight has enabled a range of abuses in a system now responsible for more than 140,000 Michigan children. That figure is growing as more parents try charter schools as an alternative to traditional districts.

 

In reviewing two decades of charter school records, the Free Press found:

 

Wasteful spending and double-dipping. Board members, school founders and employees steering lucrative deals to themselves or insiders. Schools allowed to operate for years despite poor academic records. No state standards for who operates charter schools or how to oversee them.

 

And a record number of charter schools run by for-profit companies that rake in taxpayer money and refuse to detail how they spend it, saying they’re private and not subject to disclosure laws. Michigan leads the nation in schools run by for-profits.

 

“People should get a fair return on their investment,” said former state schools Superintendent Tom Watkins, a longtime charter advocate who has argued for higher standards for all schools. “But it has to come after the bottom line of meeting the educational needs of the children. And in a number of cases, people are making a boatload of money, and the kids aren’t getting educated.”

 

According to the Free Press’ review, 38% of charter schools that received state academic rankings during the 2012-13 school year fell below the 25th percentile, meaning at least 75% of all schools in the state performed better. Only 23% of traditional public schools fell below the 25th percentile.

 

Advocates argue that charter schools have a much higher percentage of children in poverty compared with traditional schools. But traditional schools, on average, perform slightly better on standardized tests even when poverty levels are taken into account.

 

In late 2011, Michigan lawmakers removed limits on how many charters can operate here —opening the door to a slew of new management companies. In 2013-14, the state had 296 charters operating some 370 schools — in 61% of them, charter boards have enlisted a full-service, for-profit management company. Another 17% rely on for-profits for other services, mostly staffing and human resources, according to Free Press research.

 

Michigan far exceeds states like Florida, Ohio and Missouri, where only about one-third of charters were run by a full-service, for-profit management company in 2011-12, according to research by Western Michigan University professor Gary Miron, who has studied charters extensively.

 

While the Free Press found disclosure issues with both for-profit and nonprofit companies, the state’s failure to insist on more financial transparency by for-profits — teacher salaries, executive compensation, vendor payments and more — is particularly troubling to charter critics because the for-profit companies receive the bulk of the money that goes to charter schools. In some cases, even charter school board members don’t get detailed information.

 

Without that, experts say there is no way to determine if a school is getting the most for its money.

 

Authorizers in Michigan receive 3% of the state tuition money for every student who attends a charter school they authorize. That means millions of dollars flow to the authorizing groups, who have no responsibility or accountability. Anyone can open a charter school in Michigan. Charter schools can fail and be reauthorized. Charter operators can run failing schools and get to open new ones. Success is unimportant. Michigan is a free-for-all with public money.

 

State law sets no qualifications for charter applicants

 

In Michigan, anyone and everyone can apply to open a charter school. There are no state guidelines for screening applicants.

 

And in many cases, authorizers have given additional charters to schools managed by companies that haven’t demonstrated academic success with their existing schools.

 

Central Michigan University, for example, gave two additional charters to schools managed by the for-profit Hanley-Harper Group Inc. in Harper Woods, before its first school had any state ranking and despite test scores that showed it below statewide proficiency rates in reading and math. The school’s first ranking, released last year, put it in the 14th percentile, meaning that 86% of schools in Michigan did better academically.

 

“We have a product, yes, we are trying to sell and constantly working to make … better and better and better,” company founder Beata Chochla, who has run several small businesses, including janitorial and home health care, told the Free Press in an interview.

 

Ferris State University has authorized a fourth Hanley-Harper school, expected to open this fall in Oak Park.

 

“We were convinced they had a good plan,” Ferris State’s interim charter schools director Ronald Rizzo said, adding that critics who believe an operator should have a successful academic track record before adding schools are “welcome” to their views.

 

Authorizers also have been slow to close poor performers. Among the oldest and poorest performing schools in metro Detroit:

 

■ Hope Academy, founded in Detroit in 1998, ranked almost rock-bottom — in the first percentile — in 2012-13.

 

■ Commonwealth Community Development Academy, founded in Detroit in 1996, ranked in the third percentile.

 

Both schools are authorized by Eastern Michigan University, which said in a statement that it is not satisfied with either. Yet just last year, EMU renewed Hope Academy’s charter.

 

The article includes a list of recent charter scandals:

 

■ A Sault Ste. Marie charter school board gave its administrator a severance package worth $520,000 in taxpayer money.

 

■ A Bedford Township charter school spent more than $1 million on swampland.

 

■ A mostly online charter school in Charlotte spent $263,000 on a Dale Carnegie confidence-building class, $100,000 more than it spent on laptops and iPads.

 

■ Two board members who challenged their Romulus school’s management company over finances and transparency were ousted when the length of their terms was summarily reduced by Grand Valley State University.

 

■ National Heritage Academies, the state’s largest for-profit school management company, charges 14 of its Michigan schools $1 million or more in rent — which many real estate experts say is excessive.

 

■ A charter school in Pittsfield Township gave jobs and millions of dollars in business to multiple members of the founder’s family.

 

■ Charter authorizers have allowed management companies to open multiple schools without a proven track record of success.

 

Want to get rich quick? Move to Michigan and open a charter school.