Nonprofit Newswire | Report Cites Questionable Charter-School Practices

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April 5, 2010; Philadelphia Inquirer | At the same time as a report emerges on the national scene challenging charter school performance results, Philadelphia is confronted with a draft report from the city controller that is critical of the management and operations of 13 of the city’s 67 charter schools.

He doesn’t address academic performance, but questions salaries, management practices, and the self-dealing found at these schools. The controller cites excessive salaries and, according to the Inky, “rampant conflicts of interest.” There’s good reason to be digging into Philadelphia’s charter schools. One of them, the Philadelphia Academy Charter School, has been the subject of a fraud investigation, sparked by reporting by the Inquirer.

The U.S. Attorney’s office is conducting criminal investigations of nine of these area charter schools based on the controller’s investigation. The controller found “ethical lapses at all 13 charter schools examined.” The full report isn’t due to be released for two more weeks, but the draft emerged in response to a TV station’s report that the facility of the Harambee Institute of Science and Technology Charter School had a different, apparently non-educational weekend function: it was a nightclub.

Harambee’s CFO also works as a business manager for two other charter schools, receiving $700,000 in salary from the three schools over four years (perhaps because records showed that she worked more than 365 days each year) and $101,000 in reimbursements for “unspecified” credit card expenses in 2008 alone.

In a number of cases, there were examples of conflict of interest regarding property rentals and sales, as the charters and their nonprofit landlords were founded and run by the same person. The Controller’s report doesn’t disclose the charter schools that are under federal investigation, so the picture might have been worse had those institutions been included.

Charters are often founded by nonprofits, sometimes managed by them and as the report shows, rent or buy their properties occasionally from nonprofits. It may be that some charters are delivering the goods on educational performance, but none are helped by evidence of rampant mismanagement and conflicts of interest.—Rick Cohen