CPD IN THE NEWS

Akron Beacon Journal - 05.30.215  - No sector — not local governments, school districts, court systems, public universities or hospitals — misspends tax dollars like charter schools in Ohio.

A Beacon Journal review of 4,263 audits released last year by State Auditor Dave Yost’s office indicates charter schools misspend public money nearly four times more often than any other type of taxpayer-funded agency.

Since 2001, state auditors have uncovered $27.3 million improperly spent by charter schools, many run by for-profit companies, enrolling thousands of children and producing academic results that rival .

And the extent of the misspending could be far higher.

That’s because Yost and his predecessors, unable to audit all charter schools with limited staffing and overwhelmed by the dramatic growth in the schools, have farmed out most charter-school audits to private accounting firms.

Last year, these private firms found misspending in one of the 200 audits of charter schools they conducted, or half of 1 percent, while the state’s own police force of auditors found misspending in one of six audits, or 17 percent of the time.

“You don’t even have to understand audits to know that something is broken there,” said Kyle Serrette, director of Education at the Center for Popular Democracy.

The Center for Popular Democracy, based in Washington, D.C., is allied with teachers unions that generally oppose privatization in public education.

released in April, the nonprofit watchdog detailed $200 million in waste, fraud and abuse in charter schools in Ohio and 14 other states.

Serrette said none of the 43 states with charter schools has created an accountability system designed to catch fraud. But Ohio has all of the telltale flaws, and more.

Because the money must first be spent, audits are conducted years after public funds go missing.

“[Financial] audits are historical. They’re not out in front of these things,” said Robert Hinkle, Ohio’s deputy state auditor.

And the audits, which note potential fraud but give no actionable opinion, aren’t designed to detect fraud. They merely check revenues against expenses, ensuring tax dollars going in match receipts and cash balances.

Often, though, the receipts are unavailable.

“You have a system in Ohio, and everywhere else, where every single year charter school operators are getting audited. And every single year, those audits come up clean. It’s because they are not set up to catch fraud waste and abuse,” Serrette said.

And finally, there has been a historical lack of political will to strengthen state law so auditors can delve more deeply into the private contracts that charter schools enter.

“Every year, state lawmakers fail to … take the evidence that [the media] is providing and change that into law that would improve the system,” Serrette said.

Of the 10 charter schools responsible for the most misspending, all but one closed. The money likely never will be retrieved.

What academic records remain of their last report cards show none scored higher than the lowest possible grade, though only two were shuttered by the state for poor academics. One voluntarily closed. The rest cited financial and contractual issues for closing.

Taxpayers high and dry

Ohio first employed private accounting firms to take over school audits about a decade ago as the number of charter schools swelled and budget cuts thinned the auditor’s staff.

Last year, private accountants audited 41 percent of the roughly 5,800 Ohio organizations that received taxpayer funds, and 54 percent of charter schools, according to Yost’s office.

While there were fewer than 400 charter schools among the 5,800, they accounted for 70 percent of all tax dollars found to be misspent, often intentionally and illegally, according to 14 years of audits reviewed by the Beacon Journal.

And the difference between state and private auditors was profound: For every $1 private auditors found to be misspent, state officials found $102 in their audits.

Most charter schools that misspent tax dollars folded for financial issues, and after six years of failure to make restitution, the state can no longer collect.

And so more than $25 million remains unpaid — and likely never will be.

The $27.3 million misspent since 2001 is only what the state knows about.

Charter school audits often cite “numerous” missing financial documents.

These documents — from receipts to contracts to bills — must be reviewed to ensure public funds are spent for a proper public use.

Last year, Yost declared financial records at five taxpayer-funded agencies too disorderly to audit; four were charter schools.

Audits privatized

Originally, all charter schools were audited by the state.

“We had to do all of them in house,” Hinkle said. “It’s just been within probably the [Auditor Mary] Taylor administration that, if we had some community schools that through prior audits have been fairly clean — again the issue is resources in a time when we were downsizing the number of employees — we allowed some contracting of community school audits.”

Today, networks of charter schools managed by the same private companies — among them Akron-based White Hat Management and Summit Academy Management — are bundled together and bid out to be audited year after year by the same private accounting firm.

The contracts usually last five years — longer than some charter schools are open. By bundling schools that employ the same treasurer (sometimes hired by the management company), there is greater efficiency because books are more uniform.

“It just makes sense for economy of scale, for the pricing we can get from the firms and also for the interest that we can get from a number of firms. If I send out one 80-hour [audit] job, I may not get as much interest as if I send out 10 of those jobs and it’s an 800-hour job,” Hinkle said.

The state pays around $41 per hour. Last year, REA & Associates, an accounting firm headquartered in New Philadelphia, conducted 111 of the 373 charter school audits, including nearly every audit on schools managed by White Hat and Summit Academy, the state’s largest operators.

Charting reform

Auditor Yost has taken notice of the misspending in the charter school sector, which nationally ranks low on academic performance and high on privatization.

Only Michigan and Texas have a greater portion of charter schools operated by private, for-profit companies, which are not compelled to disclose how they spend public money.

Sen. Peggy Lehner has proposed a bill that would require these private companies — which run most charter schools in Ohio — to give a more detailed account of how tax dollars are used. This heightened transparency in the auditing process was not included in charter school reform bills proposed earlier this year by the House and governor.

Yost worked with Lehner and a group of mostly charter-school advocates to draft the law change.

Meanwhile, the auditor is eyeing charter schools with what limited resources he has.

“We’ve already brought in a few of those audits,” Brittany Halpin, Yost’s spokesperson, said.

“[Yost] is considering bringing them all in,” she said.

Source: Ohio.com

89.3KPCC - March 13, 2013 - Wells Fargo writes the most mortgages in California. According to a new report released Tuesday from a consortium of grassroots activists and housing advocates, 11,616 of those loans are currently in foreclosure, out of roughly 65,000 homes in foreclosure in the state.

The report accuses Wells Fargo of damaging both California communities and the state’s overall economy. It was produced by the Alliance of Californians for Community Empowerment, the Center for Popular Democracy, and the Home Defenders League.

Ross Rhodes of the Alliance of Californians for Community Development said on a conference call Tuesday that Wells Fargo was singled out because the bank is "responsible for handling more delinquent loans than any other servicer."

He added that Wells Fargo is failing to live up to the terms of last year's mortgage settlement between the states and the country's biggest banks. Rhodes said that Wells is lagging behind both Bank of America and Chase in efforts to keep people in their homes.

In a statement, Wells Fargo said that its foreclosure rate in California is lower than its rate in the nation as a whole and that the report "appears to be an attempt to question Wells Fargo’s longstanding track record as a fair and responsible lender and servicer."

The bank emerged from the financial crisis relatively unscathed. But in recent years it has been called to task for past lending practices. It was was fined $175 million by the Justice Department in 2012 for steering minorities into costly subprime loans before the housing crisis.

The bank was also fined $148 million by the Securities and Exchange Commission for violations perpetrated by Wachovia Securities (Wells took control of Wachovia in 2008, at the height of crisis, when major U.S. banks were failing).

The report also argues that Wells Fargo’s foreclosures in the state are disproportionately affecting African American and Latino neighborhoods and could wind up costing the state $20 million in lost tax revenue.

The authors say that the solution is “principal reduction” — adjusting mortgages to reflect the reduced market value of homes in foreclosure.

Numerous economists support the idea of principal reduction, but the notion has been resisted at the federal level, most notably by Edward DeMarco, acting director of the Federal Housing Finance Agency, which has overseen mortgage giants Fannie Mae and Freddie Mac since they were taken into receivership during the financial crisis.

DeMarco has supported principal forbearance, a method that would not reduce the amount of mortgages held by Fannie and Freddie but rather restructure them so that homeowners could see more affordable payments.

The report's consortium of advocates doesn't favor forbearance, arguing that it can't address the core issue of borrowers drowing in debt.

But as tempting as principal reduction might be in theory, in practice is doesn't always lead to the homeowner staying in the home.

Economist Stuart Gabriel is Director of the Ziman Center for Real Estate at UCLA. He said that principal reduction isn't a "cure all."

"For borrowers that are deeply underwater, a modest amount of principal reduction is going to make no difference the ultimate outcome, which would be default and foreclosure," Gabriel said.

In its statement, Wells Fargo called its principal reduction efforts since 2009 "aggressive." But the advocacy groups said that Wells Fargo is one of the most difficult banks to work with, and that it engages in "dual tracking" — undertaking loan modifications at the same time it moves forward with the foreclosure process.

The report also recommends that Wells Fargo disclose more data about its foreclosures, and specifically about the impact that foreclosures are having on minority neighborhoods in California.

Gabriel said that more transparency about lending practices and the racial and geographical makeup of loan portfolios is always a good thing because additional information improves markets.

Source

 

Bring Me the News - March 5, 2015, by Adam Uren - Minnesota has the third-highest unemployment gap between white and black people in the country – with the jobless rate among blacks almost four times higher than among whites.

The figures come from a new study by the Center for Popular Democracy, which shows that the unemployment rate in Minnesota among black resident is 3.7 times higher compared to white people.

This is second only to the District of Columbia (5.6 times) and Wisconsin (4.6 times).

The gap in Minnesota has lessened since 2007 however, when 3.85 times

It also found that the jobless rate among Hispanic people is more than two times greater than for white people.

A rally will be held Thursday, WCCO reports, which will “draw attention to the racial differences between wages and jobs available” in the Twin Cities and Minnesota as a whole.

It is being organized by representatives of Neighborhoods Organizing for Change (NOC), the Center for Popular Democracy and the Economy Policy Institute, and held at the NOC offices in W. Broadway Ave., Minneapolis, starting at 3 p.m.

Unemployment falling, gap still wide

The significant disparity between black and white unemployment remains, even though overall unemployment has dropped in recent years thanks to the recovery of Minnesota’s economy since the financial crisis.

The unemployment rate among black people across the state fell to 11.9 percent in 2014, compared to 15.4 per cent in 2007.

However, the rate among white people stood at just 3.2 percent in 2014, down from 4 percent in 2007. The report also found that the unemployment rate among Hispanics stood at 7 percent in 2014, almost the same as it was in 2007.

The unemployment gap is even worse in the metro area, with the graph above showing that the black unemployment rate is 3.89 times higher than white.

The report features a case study of 23-year-old Minneapolis resident Tyrone Raino, who told the Center for Popular Democracy the only full-time job he could find is 40 minutes outside the city, and he works there 40 hours a week while taking a further 20 hours of classes every week.

Disparity is nothing new

Minnesota regularly features among the worst states for racial unemployment gaps.

In 2013, Minnesota was second only to Wyoming according to the Bureau of Labor Statistics, the Star Tribune reports, when the black unemployment rate was triple the white rate.

And in 2011, MPR reported on a study by the Economic Policy Institute, which found the Twin Cities along with Memphis had the biggest white-black unemployment gaps out of the nation’s 50 biggest metropolitan areas.

When The Atlantic ran a piece last month lauding the metro area for its winning mix of affordability, opportunity and wealth, several publications responded by highlighting the gaps that suggest not everything is rosy in the Twin Cities.

It’s not just with unemployment either. WalletHub found Minnesota has the second-worst wealth gap between white people and people of color in the United States, as well as one of the biggest gaps for home ownership levels.

Source

Trump won by over 20 points, the Democrat leads in fundraising as well, aided in part by Ady Barkan, a wealthy Democratic activist with the Center for Popular Democracy who was recently diagnosed with A.L.S. (Lou Gehrig’s Disease). In speaking with Bill Roe, the First Vice Chair of the Arizona Democratic Party, he indicated that this race is unpredictable for several reasons.

Read the full article here.