California Department of Education's failure to properly monitor charter schools' compliance

“Auditors cite lax oversight of charters by CDE, as enrollment grows.” SI&A’s Cabinet Report, 10/24/2012 

As advocates for California charter schools celebrated Tuesday another double-digit increase in enrollment – news arrived from Washington disclosing serious flaws in state oversight of the sprawling charter movement.

A stinging audit of the U.S. Department of Education’s management of charter school grant money also sharply criticized the California Department of Education for failing to properly monitor charter schools’ compliance with federal law.

The review team, from the Office of Inspector General, also noted that the CDE failed to provide required oversight of charter authorizing agencies and frequently assigned unqualified evaluators for site visits...

U.S. Department of Education Office of Innovation's failure to monitor federal spending

“Audit: US oversight of charter school funds lax; Audit assails US education department's monitoring of federal spending on charter schools.” Corrected version, Associated Press, 11/1/2012

LOS ANGELES (AP) — An audit of the U.S. Department of Education's division overseeing hundreds of millions of dollars in charter school funding has criticized the office for failing to properly monitor how states spend the money.

The report released in late September by the department's inspector general also singled out state education departments in California, Florida and Arizona for lax monitoring of what charter schools do with the funds and whether their expenditures comply with federal regulations.

Burnham Wood Charter School District (three schools)

“Problems bring TEA monitor for Burnham Wood Charter School District.” El Paso Times (TX), 7/21/2012

The Texas Education Agency has assigned a monitor to the Burnham Wood Charter School District as a sanction for many problems the state previously found, including school leaders who misused public funds on some business deals and campuses not properly serving at-risk students.

The charter district's Superintendent Iris Burnham did not return phone calls this week, but in an email she said the district is contesting the education agency's decision to assign a monitor...

A state audit report released earlier this year showed that the district, which runs three charter schools in El Paso [see * below], misused public funds on some property transactions, which allegedly resulted in private benefits for Burnham, who is also the president of the district's board of directors.

Florida charter schools (grant tapping-practices)

“Charter schools get a second helping of free money.” Miami Herald, 4/28/2012     

Established charter schools are able to tap into grants meant to help start-ups by nesting schools within schools. Sometimes the two schools share everything, from staffers to teachers to buildings.

From the outside, it looks like a single school, with one main door, one security guard, one principal greeting students.

But on paper, the Charter School of Excellence at Tamarac is actually two schools in one — a bookkeeping strategy allowing the school to collect an extra $250,000 in grant money from the state...

Reading Star Academy of Excellence

“Volusia School Board votes to close troubled charter.” Orlando Sentinel (FL), 4/24/2012   

Volusia County School Board members voted unanimously Tuesday to shutter a first-year charter school after learning about 21 academic and management violations at the school.

Reading Star Academy of Excellence, a kindergarten-through-fifth-grade charter school, will shut its doors in July unless its managers ask for a hearing...

Pennsylvania charter schools (re difficulty with oversight and closing schools)

“Closing a charter school is a long, costly process"; Allentown board expected to start process against Vitalistic this week.” The Morning Call, 4/22/2012   

...Charter school revocation hearings are costly, rare and time-consuming in Pennsylvania, which has 167 charter schools. Only eight charters have been revoked and those decisions were appealed to the state Charter School Appeal Board, state Department of Education records show...

While the law's directions for how a charter can open are precise, its oversight provisions are not. The law states school districts are to oversee a charter's academic and financial performance while the state oversees cyber charter schools.

The law does not explain how school districts or the state are supposed to conduct the oversight since school districts have no authority over charters' day-to-day operations or annual budgets. Nor does the law spell out how districts are supposed to force charters to correct problems they may find...

Even the state Department of Education has had trouble overseeing charters.

For example, the Philadelphia Daily News recently reported that cyber school Frontier Virtual Charter High School has a mountain of unpaid bills and laid off its principal and all its full-time teachers despite receiving $435,000 in tax money this school year. The state Department of Education, however, has had little luck getting Frontier's administrators to turn over records so the state can investigate, according to the newspaper...

The Legislature and state Department of Education have known since 2002 that oversight of charters was lacking. That year, research from Western Michigan University found some Pennsylvania districts make "compliance visits" while others visit for "ceremonial purposes." Researchers found oversight picks up when charters come up for renewal...

Charter oversight is also the responsibility of the state auditor general's office, which is having trouble conducting cyclical audits or special investigations to make sure tax money is spent appropriately in the state's charter schools.

"There's no doubt … it creates challenges for us," Auditor General Jack Wagner said.

That means there are few eyes on the $4 billion taxpayers have spent toward charter schools in the last decade. That total, according to Department of Education data, includes per pupil expenditures, salaries, building and rental costs, and grants...

Florida charter schools (investigator observations)

“Experiences As A Police Officer With The Ugly Side Of Charter Schools And Their Management Companies.” Florida Public Employees Partnership, 12/15/2011 

With such a strong push for continued expansion in Florida, I am compelled to share my experiences as a police officer with the ugly side of Charter Schools and their management companies. As a former investigator and supervisor of a public corruption unit, several years ago my unit was responsible for a series of criminal investigations involving personnel, owners, and partners of Charter Schools. Where as some of these investigations resulted in schools being shut down and arrests others culminated in utter frustration resulting from criminals getting away with fraud. A fact made possible by industry wide practices that benefit from weak laws and the impossibility of effective industry oversight. 

During the course of these investigations members of my unit worked with a host of local, state, and federal investigators. One of which became the target of a multi-state Federal Bureau of Investigations criminal investigation. Where as, I do not claim to be an expert in the business of running Charter Schools my investigative experience provided a good insight into the big businesses of collecting Tax Dollars for educating public school children. It is from this insight that I share the following:

In everyone of our investigative cases, the schools were set up as nonprofit organizations. Most hired management companies to oversee the day to day operation of the schools. They all had a Board of Directors, had applied for and granted a Charter to be a school from local school districts as governed by Florida State Statute 1002.33 http://www.leg.state.fl.us/statutes/. Their main source of revenue was per pupil funding – called Full Time Equivalent (FTE). Some received more funding based on student disabilities.  In every case the drive to recruit more students was the primary focus of the schools and management companies. Most schools had received additional funding from available grants and all claimed Tax Exemptions as nonprofit organizations.

In just about every case the founders of the Charter Schools had ties to the Board of Directors which authorized the hiring of the management companies to run the schools. Even worse, we discovered the owners of the management companies were either the same as the school founders or were directly connected to them.  All of which revealed major conflicts of interests in most of the decisions made on the spending of Tax Dollars and education of students.

Like the Miami Herald’s Charter Schools expose, we confirmed the common practice of management companies charging for the leasing of school site facilities, vehicles, and materials. Items that were either owned by the management company or linked to their owners.  A practice that was followed with exorbitant management fees charged for services that often could not be explained, were unjustified, or could have been done by school staff for less. In all, these companies’ rule over all matters of business resulted in the majority of the schools’ money being collected by the management company or vendors of their choice without the benefit of competitive bids.

Internally, school staff like teachers, school administrators, and other staff were generally paid less than their public school counterparts. Staff had no benefit of collective bargaining, union representation and as such were at will employees.  Teachers were commonly discovered to be teaching out of field. Interviews revealed there were individuals hired with minimal to no qualifications to teach or perform the job functions of their assignments. The majority of these schools were found to be ill equipped with teaching materials that often were substandard to those in public schools.  The lack of common resources available in public school districts was a constant...

Tikun Olam Hebrew Language Charter High School

“Rejected 3 Times, School May Still Open Soon, and With a Grant, Too.” New York Times, 1/8/2012 

In the last couple of years, Sharon Akman, a real estate agent, applied to the state of New Jersey three times to open a new charter school in the Highland Park area, to be called Tikun Olam Hebrew Language Charter High School.

Each time, she was rejected.

Then on Oct. 6, one week after the state’s most recent rejection, the United States Education Department announced that it had approved a $600,000 grant to finance Ms. Akman’s proposed charter.

It would have taken federal officials just a few phone calls to determine that there were many good reasons for the state to have rejected Ms. Akman’s applications...

Ms. Akman, who declined to comment for this column, writes that the charter school would be located in St. Mary of Mount Virgin Church in New Brunswick, even though the bishop of the Diocese of Metuchen, Paul G. Bootkoski, has repeatedly said that the building is not available.

Ms. Akman’s documents list community supporters of the school, including Jun Choi, a former mayor of Edison, and the directors of the Zimmerli Art Museum in New Brunswick, who have written in e-mails made public that they are not supporters.

The application says there is a need for a Hebrew charter in the Highland Park-Edison-New Brunswick area, even though there are many Jewish private schools close by and, as Ms. Akman has told state reviewers, no community survey has been done.

The application says that the families served by the New Brunswick schools, which are predominantly black and Hispanic, support the Hebrew charter, even though school leaders and the local N.A.A.C.P. chapter do not...

An applicant with a $600,000 pledge in her pocket may be seen in a new light by state officials...

What we do know is that in mid-October Ms. Akman made her fourth try, as 1 of 42 applicants statewide.

And in December, the state made its first cuts, leaving 17 applicants — including Tikun Olam.

Next week state officials are to announce which are approved. If Tikun Olam is successful, the school plans to open in September with 100 students.

Ms. Akman has repeatedly refused to talk to reporters...

California charter schools (problems w/oversight)

"Chief of state’s charter school division stepping down.” EdSource (CA), 10/14/2011 (bolding added)

The California Department of Education is looking for a replacement for the chief of its charter school division, who is leaving her post after 18 months on the job.

The departure of Beth Hunkapiller at the end of October comes at a time of continuing expansion of charter schools in California. At the same time, the state faces considerable pressures regarding oversight of state and federal dollars, especially at start-up charter schools.  It is also examining its capacity to oversee 31 charter schools authorized by the State Board of Education between 2000 and 2010...

Miller-McCoy Academy

“New Orleans charter testing drama casts light on how cheating allegations are handled.” The Times-Picayune, 08/19/2011

Last year, several teachers at Miller-McCoy Academy in eastern New Orleans told Recovery School District officials they feared someone on the school's staff had opened high-stakes exams in advance so students could be prepped on a few actual test questions.

An RSD investigation concluded some kind of cheating had likely occurred at the all-boys middle and high school. Then, Miller-McCoy's board of directors conducted its own investigation, which found no evidence of wrongdoing. In the end, the conflicting findings of the two probes were never fully reconciled.

The handling of the matter raises important questions about how cheating allegations are investigated. In most Louisiana school districts, central office personnel handle the task and report the results to state officials, often with a recommendation about whether to void scores.

There's a natural conflict there, experts say, in that most school districts are less than eager to announce they've found corruption in their midst.

At charter schools, the conflict might be more acute, some say, because charter boards play a role in investigations. Board members can be recruited by a school's administrators, which might make it even more difficult for them to take a hard look at allegations.

"If you are committed to finding out the truth, you need individuals who are not connected in any way to the individuals involved," said Robert Schaeffer, public education director of the National Center for Fair & Open Testing.

In Louisiana's current setup, there is "a conflict of interest all the way up the line," and not just as it relates to charter schools, said Gregory Cizek, a professor of educational measurement at the University of North Carolina at Chapel Hill. "No one has a really strong interest in investigating in a really searching manner," he said.

That's why some states have started putting such investigations under the jurisdiction of the state attorney general's office or another independent entity, he said...

The Miller-McCoy investigation began in the spring of 2010 when several staff members alleged that, just days before students were to take high-stakes tests, school administrators had given teachers math questions or essay topics that were uncannily similar to those that appeared on the state exam days later. Three staff members came in to meet with RSD personnel, while two others provided interviews; all told, nearly 20 percent of the school's teachers raised concerns. The administrators asked teachers to use the questions to prepare students for the exam, according to the RSD report on the matter and interviews with three of the teachers...

Ohio charter schools (inadequate oversight)

CHARTER BACKER SAYS HOUSE PROPOSAL WEAKENS OVERSIGHT; April 30, 2011; Columbus Dispatch (OH) 

A leading school-choice supporter says the sweeping changes proposed by House Republicans would weaken oversight of charter schools severely and threaten to turn Ohio into a "laughingstock of the nation's charter-school programs."

"It's hard for me to say that," said Terry Ryan, vice president of Ohio programs and policy for the Thomas B. Fordham Institute, which sponsors seven charter schools in the state, including two in Columbus.

"It's basically saying the operators should be left alone and should be able to open as many schools as they want, and there shouldn't be any accountability but the market. We believe that's not enough."

As part of their changes to Gov. John Kasich's $55.5 billion budget, which got another full hearing yesterday, House Republicans would boost the power of for-profit charter-school operators at the expense of charter-school sponsors, who are tasked with oversight of the schools…

Electronic Classroom of Tomorrow

STATE QUESTIONS ATTENDANCE RATES AT INTERNET CHARTER SCHOOLS; Sept. 23, 2006; Associated Press, via Akron Beacon Journal (OH) 

COLUMBUS, Ohio - Attendance has been so good at some of Ohio's Internet charter schools that the state is wondering if the numbers are too good to be true.

The Ohio Department of Education plans to give attendance figures a second look after 20 of the schools - state-funded public schools where students do work online from home or other sites - reported perfect attendance for the last school year. Others had rates that were nearly perfect.

At least two schools, including Ohio's biggest, admit that they don't count students expelled for being absent for at least 21 days.

"This sounds like just another way that charter schools are gaming the system," said Lisa Zellner, spokeswoman for the Ohio Federation of Teachers. "What does this do for the student? The point is to be educating these kids, giving them what they need."…

The state's largest Internet charter school, the 6,664-student Electronic Classroom of Tomorrow, has reported perfect attendance for the past three school years…

* * * * * * * * * * * * * * * * * * * * * * * * * * * * *

ONLINE SCHOOLS UNDER SCRUTINY; May 3, 2002; Wired 

More than 30 publicly funded virtual charter schools have launched during the past five years, and parents have largely been pleased with the results.

But the alleged mismanagement of two academies run by for-profit companies is prompting states to request more regulatory authority.

Educators say the Electronic Classroom of Tomorrow (ECOT) in Ohio and Einstein Academy in Pennsylvania, both of which are run by private companies, have ignored numerous academic guidelines while operating with questionable accounting practices…

[Ohio Federation of Teachers] president Tom Mooney said ECOT is "really being run by Bozo and Clarabell," claiming that management company Altair Learning Management had no background in education or technology. However, Mooney said they were "shrewd enough to smell a really good opportunity."…

The audit, which was released in April, showed that the company overcharged the state by $1.65 million for teaching hours it could not substantiate, and that $500,000 worth of computer equipment given to students who left the program were not recovered.

The auditor's office said ECOT's net loss of $3.8 million during the school year "causes substantial doubt about its ability to continue as a going concern."

ECOT recently agreed to pay back $1.6 million to Ohio's department of education over the next three years. ECOT superintendent Jeffrey P. Forster, who saw 30 percent of his students leave the program during its first year, said that because of cost cutting, the academy is on solid financial footing…

The federation also cites a recent charter granted directly to Akron "industrialist" David Brennan's White Hat Management company instead of to a nonprofit as required by state law.

Mooney said that when legislators passed the charter school law, they never envisioned cyber schools and "did not set up appropriate guidelines for oversight."…

Teaneck Community Charter

N.J. CHARTER SCHOOLS ESCAPE PAY LIMIT; March 20, 2011; The Record @ NorthJersey.com 

The director of a Teaneck charter school with about 300 students was paid more than $200,000 last year. In Englewood, the head of an even smaller charter school, with 200 students, earned $152,000 in public money for working part time.

Governor Christie has moved to cap the salaries of superintendents at much larger traditional public school districts, but has proposed no such ceiling on tax-supported charters.

To some, the exemption shows how charters — publicly funded but independently operated — are given a pass when it comes to state regulations meant to ensure fiscal accountability.

"It's patently inequitable," said Bruce Baker, a Rutgers professor who has studied charter school financing.

Under Christie's new cap for traditional schools, superintendents in districts with about 300 students can earn no more than $135,000.

Christie's office did not respond to questions about why the cap does not apply to charters. The governor has said he favors less regulation at charter schools, which operate free of some of the rules that bind other public schools.

Carlos Perez, executive director of the New Jersey Charter School Association, said the autonomous boards that run the schools need to be able to set salaries and hire staff as they see fit…

Most charter school administrators make less than $100,000, but the state numbers show 63 administrators have broken the six-figure barrier.

Rex Shaw, the head of the Teaneck Community Charter School, topped the list. Shaw made $199,739, according to the data. His actual take-home pay was higher thanks to bonus money and reimbursement for unused time, according to the school. Shaw's compensation is listed as $205,249 in the charter school's 2009 filings with the Internal Revenue Service…

The interim superintendent in Teaneck oversees seven schools with 4,500 students and makes about $190,000. The school board is looking for a permanent leader, and will be limited to offering a salary of $175,000 under Christie's new rules.

"It seems somewhat unfair that you're asking charters and [traditional] publics to compete for the same funds, but the rules are different," said Ardie Walser, president of the township school board.

Karla Foy, president of the Teaneck Community Charter, said Shaw's salary was the culmination of a five-year contract and was based on a set of unique circumstances. The school was making the leap to a new building and needed the veteran educator for the transition, she said…

With an infusion of philanthropy into the state's largest school district in Newark, the number of charter schools is expected to grow. Baker said financial reporting at the schools has been inconsistent with only about 23 percent making available the annual financial reports they are required to file with the IRS.

"There's very little accountability with the flow of private money into the charters," Baker said.

New Jersey charter schools (excessive compensation)

N.J. CHARTER SCHOOLS ESCAPE PAY LIMIT; March 20, 2011; The Record @ NorthJersey.com 

The director of a Teaneck charter school with about 300 students was paid more than $200,000 last year. In Englewood, the head of an even smaller charter school, with 200 students, earned $152,000 in public money for working part time.

Governor Christie has moved to cap the salaries of superintendents at much larger traditional public school districts, but has proposed no such ceiling on tax-supported charters.

To some, the exemption shows how charters — publicly funded but independently operated — are given a pass when it comes to state regulations meant to ensure fiscal accountability.

"It's patently inequitable," said Bruce Baker, a Rutgers professor who has studied charter school financing.

Under Christie's new cap for traditional schools, superintendents in districts with about 300 students can earn no more than $135,000.

Christie's office did not respond to questions about why the cap does not apply to charters. The governor has said he favors less regulation at charter schools, which operate free of some of the rules that bind other public schools.

Carlos Perez, executive director of the New Jersey Charter School Association, said the autonomous boards that run the schools need to be able to set salaries and hire staff as they see fit…

Most charter school administrators make less than $100,000, but the state numbers show 63 administrators have broken the six-figure barrier.

Rex Shaw, the head of the Teaneck Community Charter School, topped the list. Shaw made $199,739, according to the data. His actual take-home pay was higher thanks to bonus money and reimbursement for unused time, according to the school. Shaw's compensation is listed as $205,249 in the charter school's 2009 filings with the Internal Revenue Service…

The interim superintendent in Teaneck oversees seven schools with 4,500 students and makes about $190,000. The school board is looking for a permanent leader, and will be limited to offering a salary of $175,000 under Christie's new rules.

"It seems somewhat unfair that you're asking charters and [traditional] publics to compete for the same funds, but the rules are different," said Ardie Walser, president of the township school board.

Karla Foy, president of the Teaneck Community Charter, said Shaw's salary was the culmination of a five-year contract and was based on a set of unique circumstances. The school was making the leap to a new building and needed the veteran educator for the transition, she said…

With an infusion of philanthropy into the state's largest school district in Newark, the number of charter schools is expected to grow. Baker said financial reporting at the schools has been inconsistent with only about 23 percent making available the annual financial reports they are required to file with the IRS.

"There's very little accountability with the flow of private money into the charters," Baker said.

Oregon charter schools (inadequate oversight)

FINANCIAL OVERSIGHT OF OREGON'S CHARTER SCHOOLS REMAINS SPOTTY; October 26, 2008; The Oregonian 

An investigation by the North Clackamas School District has raised questions about accounting and financial practices at a group of public charter schools.

But after more than six months of review, district officials say so many questions remain that they are asking the state for help, both in sorting out the financial records of the Clackamas Charter Alliance and in establishing standards to guard against misuse of public money.

The case also raises the broader issue of financial oversight of charter schools, which operate with greater freedom than traditional public schools and are growing across Oregon and the nation…

The 1999 Oregon law that created charter schools is "pretty skimpy" on the question of district oversight, said Kaaren Heikes, executive director of the Northwest Center for Educational Options, an independent nonprofit that works with charter schools. By law, the schools are required to be 501(c)(3) nonprofits and to have an annual audit, but it's up to each district to determine how closely to monitor the finances, she said.

Some districts, such as the Oregon City School District, require monthly revenue and expense reports.

"On the other end, there are districts that never look," Heikes said. She recommends quarterly review of revenue and expenses and close analysis of the annual audit…

Before initiating its investigation, the only financial information the North Clackamas district received from the alliance schools in two years were annual audits, said Jim Langstraat, the district's chief financial officer.

The questions in North Clackamas revolve around the use of charter school funds at New Urban High School, Clackamas Middle College and Clackamas Web Academy.

"We have made an attempt to collect the records and to make some sense out of them," Superintendent Ron Naso said. "We've gotten just so far. We see some things that we were certainly concerned about, but it's hard for us to determine whether they're actionable or not."

In July, the alliance's accounting company noted "material weaknesses" and "significant deficiencies" in each school's 2007 audit. According to a July 11 letter from Jarrard, Seibert, Pollard & Co. of West Linn, the schools failed to consistently get two signatures on all checks. They also left the schools' accounting system "to one individual without significant oversight or review."

Under the North Clackamas charter, alliance staff are technically employees of the school district. Former district teacher Tim King started New Urban in 2003… [NOTE: King went on to start more charter schools with problems. See All Prep Academy Network.] 

King, who left as director of the charter group in June and has helped start a string of online and middle college academies across the state, said the district's questions came as a surprise and that he had a good working relationship with the district…

Naso said the district investigation was triggered by last year's decision to convert New Urban into a district-run magnet school. About the same time, King decided to step back from the alliance and ultimately left.

$300,000 in expenses flagged

Questions arose as new people came on board.

Clackamas Middle College Principal Brian Sien, who started in July, said he has flagged more than $300,000 in questionable expenses from the previous school year. He said the school has been billed for software, physical education and other professional services it apparently did not receive.

Some of the payments in question are to EdChoices, a new venture associated with King that helps set up middle colleges and Web academies across the state. EdChoices provides marketing, financial, technological and special education services to charter schools, King says. It now works with charter schools in Sisters, Marcola and Estacada.

A growing concern

After being notified last week that the district is referring the matter to the state, King provided an analysis to show how the schools benefited from EdChoices' services such as bookkeeping, paying rent and writing grants.

"It could well be that this is simply an attempt by the charter alliance to spread the costs among the schools they operated," Naso said. "It could be as simple as that. ... It also could, in a worst-case scenario, simply be that that money wasn't really owed and should be returned."

If nothing else, Naso said, the review shows that bookkeeping practices at the alliance do not meet district standards…

Growth brings problems

"It's a growing frontier," Naso said of charter schools. "That's part of the problem. Superintendents all over the state are having difficulties understanding exactly what the relationships are going to be."

Naso said he hopes the state will clarify whether charter schools are allowed wider parameters in terms of financial operations as well as curriculum.

"There is a dilemma," he said. "What happens if something goes wrong in the process? Who's held accountable for it?"

===========================
See this entry for more information:
EdChoices

"

Clackamas Charter Alliance

FINANCIAL OVERSIGHT OF OREGON'S CHARTER SCHOOLS REMAINS SPOTTY; October 26, 2008; The Oregonian

An investigation by the North Clackamas School District has raised questions about accounting and financial practices at a group of public charter schools.

But after more than six months of review, district officials say so many questions remain that they are asking the state for help, both in sorting out the financial records of the Clackamas Charter Alliance and in establishing standards to guard against misuse of public money.

The case also raises the broader issue of financial oversight of charter schools, which operate with greater freedom than traditional public schools and are growing across Oregon and the nation…

The 1999 Oregon law that created charter schools is "pretty skimpy" on the question of district oversight, said Kaaren Heikes, executive director of the Northwest Center for Educational Options, an independent nonprofit that works with charter schools. By law, the schools are required to be 501(c)(3) nonprofits and to have an annual audit, but it's up to each district to determine how closely to monitor the finances, she said.

Some districts, such as the Oregon City School District, require monthly revenue and expense reports.

"On the other end, there are districts that never look," Heikes said. She recommends quarterly review of revenue and expenses and close analysis of the annual audit…

Before initiating its investigation, the only financial information the North Clackamas district received from the alliance schools in two years were annual audits, said Jim Langstraat, the district's chief financial officer.

The questions in North Clackamas revolve around the use of charter school funds at New Urban High School, Clackamas Middle College and Clackamas Web Academy.

"We have made an attempt to collect the records and to make some sense out of them," Superintendent Ron Naso said. "We've gotten just so far. We see some things that we were certainly concerned about, but it's hard for us to determine whether they're actionable or not."

In July, the alliance's accounting company noted "material weaknesses" and "significant deficiencies" in each school's 2007 audit. According to a July 11 letter from Jarrard, Seibert, Pollard & Co. of West Linn, the schools failed to consistently get two signatures on all checks. They also left the schools' accounting system "to one individual without significant oversight or review."

Under the North Clackamas charter, alliance staff are technically employees of the school district. Former district teacher Tim King started New Urban in 2003… [NOTE: King went on to cause more problems. See All Prep Academy Network] http://charterschoolscandals.blogspot.com/2010/07/allprep-web-academy-network.html

King, who left as director of the charter group in June and has helped start a string of online and middle college academies across the state, said the district's questions came as a surprise and that he had a good working relationship with the district…

Naso said the district investigation was triggered by last year's decision to convert New Urban into a district-run magnet school. About the same time, King decided to step back from the alliance and ultimately left.

$300,000 in expenses flagged

Questions arose as new people came on board.

Clackamas Middle College Principal Brian Sien, who started in July, said he has flagged more than $300,000 in questionable expenses from the previous school year. He said the school has been billed for software, physical education and other professional services it apparently did not receive.

Some of the payments in question are to EdChoices, a new venture associated with King that helps set up middle colleges and Web academies across the state. EdChoices provides marketing, financial, technological and special education services to charter schools, King says. It now works with charter schools in Sisters, Marcola and Estacada.

A growing concern

After being notified last week that the district is referring the matter to the state, King provided an analysis to show how the schools benefited from EdChoices' services such as bookkeeping, paying rent and writing grants.

"It could well be that this is simply an attempt by the charter alliance to spread the costs among the schools they operated," Naso said. "It could be as simple as that. ... It also could, in a worst-case scenario, simply be that that money wasn't really owed and should be returned."

If nothing else, Naso said, the review shows that bookkeeping practices at the alliance do not meet district standards…

Growth brings problems

"It's a growing frontier," Naso said of charter schools. "That's part of the problem. Superintendents all over the state are having difficulties understanding exactly what the relationships are going to be."

Naso said he hopes the state will clarify whether charter schools are allowed wider parameters in terms of financial operations as well as curriculum.

"There is a dilemma," he said. "What happens if something goes wrong in the process? Who's held accountable for it?"

Jola Community Charter School

"When charters close, public schools foot the bill."  Voice of San Diego (CA), 12/4/2007 

Spending scandals brought down Children's Conservation Academy, a City Heights charter school shuttered in 2007, only two years after it opened. A year earlier, A. Phillip Randolph Leadership Academy dissolved, with questions swirling around its finances. Its closure echoed that of Jola Community Charter School, a girls' charter that sunk two months after opening in 2005.

These schools and two other closed charters owe more than $300,000 to San Diego Unified School District in unpaid fees and property taxes. None have repaid the district. School staff doubts they ever will…

Utah charter schools (inadequate oversight)

UTAH CHARTER SCHOOLS IN NEED OF GREATER OVERSIGHT, AUDIT SAYS, October 22, 2010, Salt Lake Tribune (UT)

The State Charter School Board needs to polish its practices to more effectively regulate Utah’s growing number of charter schools, according to a legislative audit released Thursday.

The number of charter schools in Utah has surged from 7 in 2001 to 76 this year with no increase in the charter board’s support staff at the Utah State Office of Education. In fact, the six-member staff has been cut to five.
The report highlights the board’s handling last year of financial struggles at Beehive Science and Technology Academy in Holladay. The board voted to revoke Beehive’s charter but later reversed that decision because of its own “ambiguous standards” for charter finances, the audit states. 

The report recommends the board establish and apply clear financial standards for all charter schools. The board also needs to clarify procedures for disciplinary actions and school closures…

The audit also found the State Board of Education approved more loans to charter schools last year than is allowed by statute. The cap is set at $2 million, but the board awarded 21 loans totalling $3.8 million in the 2008-09 school year. The report recommends better tracking of loans and for the Legislature to clarify how loan money can be spent…