Pat and Sue Legg of the Florida League of Women Voters have performed q public service by detailing how for-profit charter companies rip off taxpayers and cheat children.
You can be sure Jeb Bush will not assign this report when he lectures at Harvard this fall about the Florida “miracle” that no one can see other than himself and his hirelings.
Here is the beginning. Please note that 40% of taxpayer funds goes to the management company, not to educating students. What a racket!
Hall and Legg write:
“ANALYSIS OF CHARTER SCHOOL USA REAL ESTATE BUSINESS PRACTICES
“Florida now educates more than 230,000 students at more than 650 publicly funded charter schools. While many of these schools are providing good educational opportunities, we have found that the fundamental structure of the for-profit management companies, specifically Charter Schools USA, must be questioned. The following outline summarizes a very detailed report given the LWVF Board this past summer.
“1. CSUSA has six non-profit school boards that operate 49 schools in 12 urban counties in Florida. Additionally, CSUSA operates 17 schools in 6 other states.
“2. The six governing school boards cover the 49 charters and are run by CSUSA; they are not independent of the management companies.
“3. Inter related affiliated businesses include Red Apple Development, Ryan Construction Company, the Florida Charter Education Foundation and Connex (curriculum software). Furthermore, we found over 300 limited liability companies (LLCs) initiated by CSUSA.
“4. Facilities financing incorporates all aspects of land acquisition, site clearing, construction, bond financing and multimillion dollar lease fees. CSUSA charges the Hillsborough County School district at one of their four schools more than $30/square foot, significantly higher than downtown Tampa skyscrapers!
“5. Tracking expenditures of taxpayer monies is impossible due to for-profit business practices which are not transparent.
“6. Long term lease agreements, after flipping (changing deeds from one related company to the next) from Ryan Construction to Red Apple Development, are charged out 40 years, and charge rent and interest amounts on top of the lease payments. Most CSUSA lease fees in Hillsborough County take 25% of all taxpayer dollars designated for educating children. Some are even higher.
“7. Another 13% to 15% is charged by CSUSA for management fees, hence 40% of public money is not spent instructing children. State auditors have questioned how these costs are reported.
“8. Evidence exists of real estate “flipping” by CSUSA in Hillsborough County. This results in new real estate appraisals to increase value. Lease and rent costs use these values to justify cost charged to charter budgets.
“INTERIM REPORT: ANALYSIS OF CSUSA REAL ESTATE BUSINESS PRACTICES
“By Pat Hall and Sue Legg, LWVF Education Team, June 2016
“Introduction. District school boards grant charter school contracts to private entities and monitor their financial balance sheets, but by legislative intent, they do not have responsibility for their management and operation. Charters have little regulation, and the result has been a continuing saga of scandals. This report goes beyond the mismanagement and corruption issues to the fundamental structure of for-profit management companies, and it questions the accountability of these companies for their use of public funds. Charters may be self-managed or operated by non-profit or for-profit companies. We focus on one for-profit charter management company, Charter Schools, USA (CSUSA). Florida has several others including, Academica which was the focus of a federal investigation, and Newpoint charters which face indictments. A detailed example of the complex facility transactions for CSUSA’s Woodmont K-8 school raises the issue of excessive profiteering. We have data that indicate these business practices are not specific to one school or one company. CSUSA organizational structure: CSUSA is owned and operated by the CEO, Jonathan Hage. It has multiple interrelated entities whose operations are difficult to track. CSUSA has created six non-profit charter school boards to operate 49 publically funded, privately managed charter schools in 12 Florida counties. Additionally CSUSA operates 17 schools in 6 other states. These non-profit boards subcontract to the CSUSA for profit educational management firm which founded them.”