by Brian Washington
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A new report concludes that taxpayers in 15 states have lost about $216 million to charter-school waste, fraud, abuse, and mismanagement.
The report, issued this week by the Center for Popular Democracy, says that number is based on confirmed and alleged reports linked to charter schools.
Entitled “Charter School Vulnerabilities to Waste, Fraud, and Abuse”, the report gives several examples of cases that have grabbed headlines. One involved the founder of three charter schools in Atlanta who was arrested and charged with misappropriating about $600,000 he allegedly obtained through ATM withdrawals linked to the schools’ accounts.
Another case mentioned in the report involves the Hope Academy Charter School in Kansas City, Missouri. Law enforcement officials are suing the school for $3.7 million in state funding they charge was misappropriated by the school.
According to the report, with the rapid growth of charters nationwide, local and state governments are not equipped to adequately oversee the public’s investment in these schools. It adds that state, local, and federal governments nationwide could lose more than $1.8 billion this year due to deficiencies related to oversight. That’s up from losses totaling $1.4 billion in 2015. The report claims the bulk of these losses will go undetected because of the inability of government at every level to adequately monitor and regulate charters.
Public funding for charter schools (including local, state and federal expenditures) has reached over $30 billion annually,” states the report’s executive summary. “Yet despite this tremendous ongoing investment of public dollars to charter schools, government at all levels has failed to implement a system that proactively monitors charter schools for fraud, waste, abuse, and mismanagement.
The report states that within the last 20 years, the federal government has given more than $3.3 billion to states to increase its number of charter schools. However, it has not laid out any significant requirements for oversight.
Under the Every Student Succeeds Act (ESSA), the new law that replaced No Child Left Behind, the federal investment in charter schools is expected to grow exponentially—making the need for charter reforms all the more important.
“With the recent passage of the Every Student Succeeds Act (ESSA), the federal Department of Education is set to increase the pace of spending significantly over the next 10 years, doubling the total federal investment in charter schools in half the time,” states the report.
“With the continuation of inadequate oversight mechanisms and the new influx of federal dollars likely under ESSA, the amount of federal, state, and local dollars at risk of being lost to fraud, waste, and abuse in the charter sector is only going to grow.”
However, CPD has several recommendations to improve oversight, including the following:
- Mandate audits that are specifically designed to detect and prevent fraud and increase the transparency and accountability of charter school operators and managers;
- Design clear planning-based public investments to ensure that any expansions of charter school investments ensure equity, transparency, and accountability; and
- Increase transparency and accountability to ensure that charter schools provide the information necessary for state agencies to detect and prevent fraud.
CPD has issued similar reports and recommendations in 2014 and 2015. In its initial 2014 report, CPD concluded that taxpayers in those same 15 states had experienced over $100 million in charter losses. In its 2015 report, that number was bumped up to over $203 million.