For Immediate Release: April 27, 2015

Contact: Ricardo A. Ramírez, rramirez@populardemocracy.org, 202-905-1738

As Charter School Week gets underway, please keep the following questions in mind – from the Center for Popular Democracy, where we have documented state-level charter school fraud.  Gaps in accountability do not serve the public interest, and education advocates and concerned parents want answers:

1) Does the federal government provide adequate oversight over the grants they award to states to encourage charter school growth?  The federal Charter Schools Program (CSP) was created in 1994 to help seed new charter schools throughout the country (in states which allow them) and to provide funds to help disseminate best practices in the charter sector to inform public education overall.  The Charter Schools Program is funded through Title V, Part B, Subpart 1 of the Elementary and Secondary Education Act (ESEA). 

The Charter Schools Program has disbursed $2.9 billion in seed money for the creation of hundreds of new charter schools since it was created two decades ago.  An additional $300 million has been awarded to charter management organizations to expand and replicate existing charters.

In 2012, the OIG issued a final audit report, reflecting their findings from an investigation of the Charter Schools Program in just three states.  In this audit, the Inspector General’s report found that none of the three SEAs receiving the grants adequately monitored the schools they had funded. Further, the OIG found that none of the three states had adequate methodologies to conduct monitoring, nor did they properly monitor state or local authorizing agencies that are tasked with providing oversight to the schools.

2) Have any federal charter school dollars been lost to charter operator fraud?

1. guilty to embezzling more than $300,000 in federal funds provided under the Charter Schools Program (through afederal grant to the Wisconsin SEA) and Title I.  The school was closed in 2006, as Tucker’s case wended its way through the courts.  Other recipients of federal start-up funds include several Harmony Schools in Texas, run by the Turkish Gulen Schools network, which has been the target of numerous FBI and state-level probes, and several schools in Arizona run by the for-profit Imagine Schools network, which has raised controversy in a number of states for its lucrative real estate dealingsrelated to its charter holdings.  These examples are likely only the tip of the iceberg, however:  the names and status of the individual schools funded through the CSP’s SEA grant program are unreported by the Department of Education.

3)How much money has your state lost to charter waste, fraud and abuse? With at least $200 million tax dollars lost to fraud, waste, or abuse by charter operators in the United States, there is significant progress needed before the charter sector can claim best practices on fraud and abuse. What’s worse, given the scant auditing and regulation, the fraud uncovered so far might only be scratching the surface. The types of fraud fall into six major categories: [Reference: CPD April 2015 Report]

• Charter operators using public funds illegally for personal gain;
• School revenue used to illegally support other charter operator businesses;
• Mismanagement that puts children in actual or potential danger;
• Charters illegally requesting public dollars for services not provided;
• Charter operators illegally inflating enrollment to boost revenues; and,
• Charter operators mismanaging public funds and schools

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The Center for Popular Democracy promotes equity, opportunity, and a dynamic democracy in partnership with innovative base-building organizations, organizing networks and alliances, and progressive unions across the country. CPD builds the strength and capacity of democratic organizations to envision and advance a pro-worker, pro-immigrant, racial justice agenda.