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New Report Alleges Charter School Fraud Could Be Costing IL Taxpayers $27 Million

Education Votes - February 2, 2015, by Brian Washington - Proven or suspected fraud in Illinois’ charter school industry is suspected of carrying a price tag for taxpayers as high as $27.7 million—that’s according to a new report that some say adds more credence to the argument that these schools need more oversight and accountability.

The report, Illinois’ Charter School Fraud Risk Problem, alleges three fundamental problems with charter school oversight in the state:

  • Oversight depends heavily on whistleblowers and reporting by the charters themselves;
  • General auditing techniques commissioned by the charters are not specifically designed to uncover fraud, only inaccuracies and inefficiencies; and
  • Government agencies in Illinois tasked with investigating fraud are severely understaffed.

The Center for Popular Democracy (CPD), which authored the report, also claims to have uncovered massive deficiencies which, at a minimum, reportedly total at least $13.1 million.

“Here is yet another state where lawmakers continue to dump massive amounts of public school funds into the charter industry, yet no one is held accountable at any stage of the funding pipeline,” said NEA President Lily Eskelsen García, who represents about 3-million educators nationwide.

Despite the alleged problems outlined by CPD, as well as what critics charge is the inability of charter schools to show real improvement in relation to student achievement, charter school enrollment in the state has grown by 680-percent.

In the Chicago Public Schools district, the state’s largest public school system, the budget for charter schools, which are considered public schools because they are taxpayer funded, is $616 million for fiscal year 2015—an increase of 15 percent compared to fiscal year 2014.

“Operators (of charter schools) continue to line their pockets unchecked while public schools are forced to slash programs due to lack of funding,” said Eskelsen Garcia. “Lawmakers need to stop treating education budgets like a slush fund for corporate charter school operators and hold them accountable to the students and communities they are supposed to be serving.”

For Illinois, CPD is recommending that the state make major changes to its current oversight structure, including the following:

  • Mandated audits designed to detect and prevent fraud;
  • Increased transparency and accountability; and
  • A state-imposed moratorium on new charter schools until the state oversight system has been reformed.

“Illinois students, their families, and taxpayers cannot afford to keep losing millions of dollars in public funds at the hands of charter school operators, who essentially enforce their own rules,” said Eskelsen Garcia. “It’s time for the Illinois legislature, State Board of Education, and authorizers, like Chicago Public Schools, to step in and make sure these operators use the funds they are given to fulfill their own promises of a great education for their students. There should be a sound structure for oversight and accountability whenever taxpayer dollars are applied.”

CPD’s Illinois report follows two other state-specific reports–including  one which focused on the state of Pennsylvania. That report, issued last month, charged that fraud and abuse of the state’s charter school industry amounted to a $30 million loss for state taxpayers.

Meanwhile, another recent report by CPD alleges that nationwide taxpayers have lost $100 million due to charter school fraud.

“It’s time Illinois and all states are able to assure taxpayers that their charter oversight systems are airtight and dedicated to quality and community,” said Eskelsen García.