A new study based on publicly available data on the state’s website finds that the state has wasted millions of federal dollars designated for charter schools. Of the state’s federally funded charter schools, 37% either never opened or were among the state’s lowest performing schools. Only recently, the U.S. Department of Education decided to award another $71 million to expand the charter industry in Ohio, but the new funding has been delayed because of outrage over scandals in the state’s charters. The study was conducted by the Ohio Charter School Accountability Project.

 
New Study Shows Millions Intended for High-Performing Charter Schools
Went to Some of Ohio’s Worst – and Others That Never Even Opened

For Immediate Release: May 26, 2106

COLUMBUS – The federal government has sent more money to Ohio to expand “high-performing” charter schools than all but two other states, but Ohio spent millions on some of the lowest-performing schools. And nearly $4 million went to schools that never opened, according to a new analysis.

The Ohio Charter School Accountability Project did the analysis to determine how a state with so many of America’s worst-performing charter schools could be in line for so much federal money intended to help the best ones.

Ohio ranks third nationally in total money received during the program’s 21-year history. During that time, the U.S. Department of Education did just one assessment of the grants’ success in Ohio. Although it raised serious questions about the Ohio Department of Education’s ability to properly distribute the money, nothing appears to have changed as a result.

“As Ohio takes steps to make charter school sponsors more accountable under the reform law passed last year, it’s important that policy makers understand the past,” said OEA President Becky Higgins. “Together with our colleagues at Innovation Ohio and ProgressOhio, we examined how these Charter School Program (CSP) grants have been awarded, and tried to identify the shortfalls along the way. Ohio cannot afford to waste money on failing charter schools. It needs to invest in the good ones.’’

The new analysis, Belly Up: A Review of Federal Charter School Grants, shows how state and federal education departments ignored warning signs, systemically wasted tax dollars and made learning more difficult for many Ohio students.

Among the main findings:

· Of the 292 Ohio charter schools that have received federal CSP funding since 2006, 108 (37 percent) have closed or never opened, totaling nearly $30 million. Meanwhile, barely 2 percent of all companies nationwide that have received any federal grants or incentives since 2000 have failed.

· The Ohio tally includes 26 charter schools that received nearly $4 million in CSP funding but never opened. There are no records to indicate whether any of these public funds was returned.

· Ohio charters that received past CSP funding and State Report Card grades in the 2014-2015 school year had a median Performance Index score that was lower than all but 15 of Ohio’s 613 school districts.

· Since the federal grant program began 21 years ago, its lone assessment – conducted by WestEd – identified material weaknesses that appear to have been ignored by federal grant makers. In one instance, a potential grant reviewer even told the Ohio Department of Education that she was unqualified for the job and asked to be excluded from its reviewers’ list. Instead, the department thanked her for “agreeing to participate as a community school grant reader.”

· Paolo DeMaria, recently appointed Ohio Superintendent of Public Instruction, was Associate Superintendent of Finance and School Options at the time WestEd raised concerns about Ohio’s processes for distributing the federal money to charter schools.

Of the 44 Ohio charter schools where State Auditor David Yost conducted surprise attendance audits recently, 17 had received federal CSP funding. One of them – the London Academy – only had 10 of the 270 students ODE thought it had in attendance the day Yost’s investigators showed up. All told, these audited schools received about $6.6 million in federal funding.
Last September, federal officials stunned education experts by announcing that Ohio would receive $71 million in CSP grants – more than any other state. Ohio’s large award came in spite of its reputation as one the worst charter states in the country, according to national charter advocates. The swift and severe criticism that followed prompted USDOE to put Ohio’s award on hold.

“We urge federal regulators to revamp the way in which it makes grants so that the money goes to the best performing charter schools,” said Innovation Ohio President Keary McCarthy. “The mistakes of the past should not be repeated in the awarding of future grants.”

Those mistakes include giving millions to the state’s most notorious charter school scofflaws, including:

· Horizon Science Academies and Noble Academies: Total CSP Grants: 7.6 million

Linked to a Muslim cleric exiled in Pennsylvania, the chain is the subject of an ongoing FBI investigation, and WikiLeaks revealed cables showing the U.S. State Department notified the CIA about suspicious visas for teachers and administrators. In June 2014, 19 of its schools were raided by the FBI, including four in Ohio. The Ohio schools also have been dogged by allegations of test-tampering, teachers using racial slurs in the classroom, unqualified teachers, sexual misconduct in the classroom. ODE investigated allegations raised by teachers who witnessed the problems but found no wrongdoing.

· Imagine Schools: Total CSP Grants: $5.9 million

The chain has been under fire nationally for saddling schools with exorbitant leases paid to its subsidiary, SchoolHouse Finance. Imagine recently lost lawsuits in Indiana and Missouri over the same type of abusive leases seen in Ohio. A federal judge in Missouri ordered Imagine to pay $1 million and called the lease arrangement “self-dealing.’’ One of the chain’s worst-performing Ohio schools, Romig Road in Akron, is among the charters that closed – but received federal grant money. All of Imagine’s Ohio schools received a D or F on the most recent state report cards.

· White Hat Management: Total CSP Grants: $1.4 million
Owner David Brennan has been the most powerful and influential of Ohio’s charter school operators since state money started flowing to them. Brennan’s schools also are routinely among the lowest performing. While Ohio’s historically lax regulations make it difficult to close even the worst schools, several of Brennan’s schools have been shut down for academic reasons or contractual non-compliance. Staffers for GOP state Auditor David Yost made surprise visits to charters to see if they are padding attendance records and concluded that White Hat’s dropout recovery schools were among the worst.

It’s been well documented that ODE’s grant application for the $71 million was inaccurate and misleading, prompting state officials to revise the number of poor-performing charter schools in Ohio from six on its initial application to 57 – a tenfold increase. The author of the application, David Hansen, was forced to resign as head of ODE’s office of school choice and community schools after getting caught illegally cooking the state’s accountability system to benefit Ohio’s politically connected eSchool operators.

It is unclear when or if federal regulators will release the $71 million.

The Ohio Charter School Accountability Project is a joint venture of the Ohio Education Association, Innovation Ohio and ProgressOhio. OEA and IO host the website, knowyourcharter.com, which provides data from the Ohio Department of Education on how the state’s charter schools are faring compared to local public schools.

For More Information, contact:

Stephen Dyer, Innovation Ohio Education Fellow, 330-338-1486
Keary McCarthy, Innovation Ohio President, 614-425-9163