Tom Horne’s$6.4 Million Giveaway

by David Safier

(TASL) The Arizona Department of Education mistakenly gave Cyber Charter Schools a total of $6.4 million in extra funding. According to two sources I spoke with at the Dept of Ed, Tom Horne decided the schools can keep the money. They don’t have to return a penny of the $6.4 million to the state.

One of the people I spoke with promised to get me a copy of a memo Horne wrote explaining his decision not to ask for the money to be returned, but he hasn’t gotten back to me. So I’ll write what I know, and what I think I know. When I get the memo and any other information, I’ll fill in the gaps, or, if necessary, correct the record.

Let me start with what I know for sure. In October, 2007, the state published a Performance Audit of TAPBI Schools (TAPBI is the term of art for Cyber Schools, by the way. It stands for “Technology Assisted Project-Based Instruction Program”). According to the audit, the schools were given too much money for some of their students. The reason is, lots of students in the TAPBI schools attend brick-and-mortar schools as well. Since each student is only entitled to a certain amount of education money from the state, it should have been split, based on the amount of time the student spent at each school.

The Ed Dept goofed. For some reason, the computer program it used to calculate school funding wasn’t up to the task of figuring out how to split the money. (It doesn’t sound very hard to figure out the percentage of time spent in two schools and split the funding accordingly, but what do I know?) The result was, the TAPBI schools were given too much money.

A total of $6.4 million too much money.

According to the audit, the fault lies with the Ed Dept, not with the schools. I have to say, though, it’s a little hard for me to believe that out of all those schools, not one of them noticed they were getting a little too much money. If they were being shortchanged, what do you want to bet someone would have caught it?

The Dept of Ed could have said to the schools, “Sorry, we made a $6.4 million mistake. Each of you has to return the following amount of money to the state.” It even could have worked out a long term plan, where the schools got a little less each year until the entire amount was refunded, so it wouldn’t hurt so bad.

But apparently, the Dept of Ed didn’t say that.

Instead, according to the two people I talked to, one in the State Board of Charter Schools and the other in the School Finance Unit, Horne said, in essence, “My bad. Keep the $6.4 million.” I don’t know this for certain, because I haven’t been furnished with documentation yet, but two separate people in two separate offices told me the same thing: Horne decided the TAPBI schools could keep the money.

Let me note two important facts about Arizona Charter Schools. Some are for-profit entities, meaning that any money they don’t spend on education goes into someone’s pocket as profit. Others are nonprofit, but unlike traditional public schools, they set their own administrative salaries. According to the audit, the average administrative cost per student at the TAPBI schools is twice the average cost at state public schools. The top earner at one of the schools makes $187,000.

So what happened to the $6.4 million of taxpayer money Horne apparently gave away? I suppose the schools could have used it to bolster their students’ education, but they just as easily could have used it to add to the schools’ profit margin or inflate some administrator’s salary. We’ll never know. And Horne doesn’t seem to care.