Charter Schools Need Basic Standards of Disclosure and Accountability

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June 2, 2015;Hartford Courant

School reform advocates who have placed their bets on charter schools ought to be taking one element of criticism to heart: The public seems unhappy with the reluctance of many charter school operators to be transparent in their operations and finances. That would seem to be the message from Connecticut, where the state senate passed on a vote of 35 to 1 new requirements calling for greater accountability and disclosure from charter school operators.

“I think it’s critical if we are going to have charter schools and add charter schools … that we have transparency,’’ said Sen. Beth Bye, co-chairwoman of the legislature’s appropriations committee. “When you take public money and invest in anything, we need to have utter transparency.’’

According to Daniela Altamari reporting for the Hartford Courant, the legislation requires charter schools to adopt anti-nepotism clauses and conflict of interest policies, to comply with Connecticut’s Freedom of Information requirements, and to have school managers submit to background checks.

Although Connecticut’s 22 charter schools are within the public school systems, they are managed by nonprofit charter management organizations. The legislation includes language that makes clear that the intent is in part to bring charter school management organizations into line with the best practices of the nonprofit sector. Some of the explicit nonprofit concerns in the new charter legislation include the following, as summarized in this analysis of the bill from the Connecticut General Assembly:

  • The bill “requires…each charter school governing council to adopt anti-nepotism and conflict of interest policies aligned with state law and nonprofit corporate governance best practices”
  • The bill “requires each [Charter Management Organization], or governing council in the absence of a CMO, to annually submit to the education commissioner a (a) certified audit statement of revenues from public and private sources and expenditures and (b) complete copy of its most recent Internal Revenue Service Form 990, with all its parts and schedules”
  • “The bill allows a charter school governing council to enter into a contract with a CMO only for the purpose of whole school management services. Such a contract must (1) be aligned with state or federal law or regulations, (2) not entail any financial or other conflicts of interest, and (3) not amend, alter, or modify any charter provision.”
  • “Additionally, the bill prohibits a governing council from entering into any whole school management services contract that would (1) reduce the governing council’s responsibility for operating the charter school or (2) hinder the governing council’s ability to effectively supervise the charter school”

It seems like someone in the Connecticut legislature was looking at texts on nonprofit management best practices and making adaptations to the state’s charter school laws. As usual, however, this move toward state-mandated nonprofit best practices in Connecticut didn’t originate in a self-regulating charter school community. Rather, it was due to an exposé conducted by the Hartford Courant concerning troubling misrepresentations connected with the Jumoke Academy, its CEO Michael Sharpe (who had said he had a PhD, which he didn’t, and never acknowledged having a criminal record, which he did have), and its Family Schools of Excellence CMO.

As is sadly the case with many charter school operators, they wanted to have it both ways—privileged to be part of the government-financed public school systems, but exempt from having to disclose what public schools routinely disclose. In Connecticut, the state’s largest charter school operator, Achievement First, and other CMOs contended that the state legislation wasn’t necessary because they—presumably the CMOs, even though they are managing public schools—aren’t public agencies and shouldn’t be required to adhere to state public disclosure requirements.

Complying with the Freedom of Information Act would be “incredibly burdensome” and “would significantly distract, undermine and obstruct nonprofit CMO resources and manpower from its most important work,” testified Achievement First president Dacia Toll in hearing last March. “We want to focus on the work of helping schools change the life outcomes of kids, not processing a litany of FOIA requests from charter school detractors and naysayers.” The legislature bought some of Toll’s argument and chose not to require the disclosure of charter school donors’ names.

Whether one likes or dislikes the latitudes in curricula and teaching methods allowed for charter schools, the attitudes of charter school operators like Toll to the basics of disclosure and public accountability send a message to the public that doesn’t win allies, especially when the public hears about significant charter school manager salaries, low charter school teacher salaries, and, as in Jumoke, the hiring of friends and relatives through rampant nepotism. For the record, Toll’s salary as co-CEO and president of Achievement First in 2013 was $243,255 (plus $8,690 from related organizations) and the salary of Achievement’s other co-CEO, Douglas McCurry, was $231,619 (plus $8,640 in other income).

Questions about the transparency and accountability of nonprofit-run charter schools are popping up all around the nation. In Escondido, California, the San Diego Free Press has published articles investigating practices at the Escondido Charter High School. In Revere, Ohio, the five members of the board of education plus the superintendent of schools and the district’s CFO wrote to Governor John Kasich and the Ohio legislature asking them to “enact meaningful laws to ensure greater accountability and transparency among Ohio charter schools.” Revere’s resolution cited a number of issues justifying increased accountability and transparency for charters, including these:

  • 511 of the state’s 613 school districts received less per pupil under the state’s funding formula than the minimum $5,745 per pupil received by the charter schools.
  • The share of state funding per each Revere student is $398, while the state supplements a charter school for each Revere student at $6,099.
  • Ohio’s charter schools have not lived up to their promise of better education with only one of 10 charter school students attending a school rated high performing.
  • Charter schools are exempt from more than 150 state education laws.

Given those subsidy levels, the current Ohio state law appears deficient in its required transparency. According to Ohio state auditor Dave Yost, the explanation charters must submit on their use of state funding is “just one piece of paper. It does not disclose any proprietary information or disclose how the company is run. The footnote just shows how money is being spent on instruction.”

Nonprofit best practice is to be as detailed and accountable with financial disclosures as possible. It would appear that some charter school operators need a refresher course in nonprofit best practice if they hope to retain even a tenuous hold on public trust.—Rick Cohen