As a former Charter School founder and owner, I have followed the drive for increased accountability for Arizona’s charter schools with great interest.
Since charter schools first appeared in Arizona in the mid-1990s, the majority of them have demonstrated academic excellence and provided safe choices for families to enroll their children.
It is also accurate to state that charter schools have also been held to account since they first appeared in the mid-1990s.
In the twenty-three years charter schools have functioned in Arizona, several have had their charters revoked or surrendered for a variety of reasons. These include:
• Inflating their enrollment records to garner more revenues from the state.
• Cheating on the State Mandated Education Examinations.
• Providing textbooks (science for example) with religious themes.
My charter school, despite having an above average academic program and stellar academic team, had to appear before the State Board of Education because financial difficulties caused the late submittal of our annual audits and federal tax deposits. There was also one year where we also made an accidental clerical error with regards to the expiration of fingerprint checks on two of our faculty. There was another year where I had to explain why we had lost an invoice to my fathers exterminating company over a $150.00 bill to treat the school grounds. The Arizona State Board for Charter Schools mandated a corrective action plan on the invoicing, fingerprinting, audit submittals, and tax deposits. We came into compliance and proved, in a second renewal hearing, we were deserving of having our charter school contract renewed. The students continued to be well served until declining enrollment caused us to be absorbed by another charter school.
So since its inception, there have been accountability measures for charter schools.
However, recent revelations over the last year, largely thanks to Craig Harris of the Arizona Republic, have highlighted other troubling practices by the larger charter school chains who, after having been allowed by legislation supported by Governor Ducey (who has large charter school representatives speaking in his ear) to grow and expand, have embarked on their version of crony capitalism, complete with influence peddling with their own lobbying association and alliances with legislators, some of whom have a vested interest in some of these schools. These troubling practices include:
• Governing Boards where there are conflicts of interests among the members.
• The organization of private accounting-business “shelters”, exempt from annual audit requirements, that administer the funds the states distribute to the schools (who transfer the funds to the private entity where they are managed. Sometimes these funds are invested where the profits are not put into schools operations but multimillion dollar bonuses for the charter school leaders.)
• Cash bonuses, in the millions, to charter school owners and founders as well as no-bid contracts to their (and relatives) other business interests. While charter school owners and founders of schools that emphasize and demonstrate academic excellence undoubtedly deserve merit bonuses, it is quite another matter when someone earns millions of dollars from a school program that puts enrollment numbers over a child’s academic performance. It is also unseemly for charter school operators to use their schools as potential “cash cows” for their, or persons linked with them, other business ventures.
• Influence peddling with government officials with one legislator directly involved with writing legislation that benefits his charter school chain.
• Convince some families, in order to maintain their school’s high-grade status that their child may not do well in this particular educational institution.
• Ask families to “voluntarily” contribute additional funds (not just for extracurricular activities), sometimes in the thousands, to help the school fund its programs.
These troubling trends caused many educators and public servants, including Kathy Hoffman and all the local Democratic Candidates to run on greater charter school transparency and accountability during the 2018 elections. Superintendent Hoffman and the Democrats that won repeated these goals when the legislature came into session in January.
Since then, the legislature has considered a Charter School Reform bill (SB1394) from Legislative District 28 State Senator Kate Brophy McGee. It passed the State Senate on a straight 17 to 13 party vote. The bill contains the following provisions:
• Charter Governing Boards must have at least three members with no majority familial interests. However, as Mr. Harris wrote, there is no provision against friends or business associates.
• Potentially halt a charter school from purchasing “goods and services” from any charter school owner, operator, board member, or relative of any leader of the school. However, the legislation does allow an individual charter school board to make exceptions if necessary.
• Requires charter schools to report the names of its board members and how it allocates its expenses. From personal experience with my own school, charter schools do this all the time with the completion of its annual audits and its online posting of all their board meetings.
• Give the State Attorney General the discretion through the auditor general to perform random compliance and financial audits.
Democratic Amendments to strengthen this legislation were rejected on a party-line vote.
In commenting on what passed the State Senate, Superintendent Hoffman stated that:
“I was supportive of the legislative process, as were many Democrats, in the hope that meaningful and comprehensive charter school reform would be the result. While this bill includes some positive steps in the right direction, reform can and must go further in providing greater transparency and oversight. As I have said, the primary responsibility of charter schools is to educate students, not profit at the expense of our communities.”
From my school’s experience, the annual audit all charter schools are legally required to undergo, with its random checks of financial transactions (which would reveal any insider wrongdoing), governing board minutes and enrollment records, is going to reveal if there are instances of accidental or deliberate noncompliance.
That is why this legislation, while making a minuscule step forward, does not go far enough, to addressing the issues spawned by the proliferation of these large charter school chains. With this weak measure, it may only empower the other crony capitalist charter school chains and smaller charter schools, if they have not already done so, to organize their own private business shelters to hide how the funds are managed away from the eyes of the annual auditor and there will be guaranteed employment for Mr. Harris and other quality muckrakers who will expose each new transgression that occurs.
Arizona Charter Schools have mostly served students and families well since they first started operations in 1996. That includes some of the charter school chains (BASIS, Great Hearts, Ben Franklin) that would have been impacted by the Brophy McGee legislation if it had any “bite” to it.
There is nothing wrong with individuals, families, or business associates starting and running a charter school or chain of them. Superintendent Hoffman, as a member of the Arizona State Board of Charter Schools, has demonstrated this by voting to allow successful schools to increase their grade and enrollment levels. Furthermore, there is nothing wrong with these individuals, families, or business associates to make a salary that is suitable for the position they hold within the organization.
However, that does not mean the charter school owner should be able to write or vote on the laws that directly benefit them. That does not mean the charter school board members should be able to steer purchasing bids to enrich relatives, business associates, friends, or themselves. It does not mean they should hide how they are spending the public’s money through sheltering state dollars in a private entity or keeping most of the profits for themselves.
There are already sufficient mechanisms to hold charter schools accountable if they commit financial or educational fraud. There needs to be additional remedies for those charter schools that engage in continual self-dealing, allocating profits to charter leaders instead of school operations, conflicts of interest, and enrollment discrimination. The Brophy McGee bill does not accomplish any of this and a new bill is needed.