Utica Observer-Dispatch - December 13, 2014, by Alissa Scott - Charter schools have been accused of posing a $54 million fraud risk to taxpayers, according to a new report.

The Alliance for Quality Education said vulnerabilities in the state’s charter system potentially could cause millions of dollars in fraud this year alone.

“There’s two parts of operating a charter,” said Kyle Serrette, director of the Education Center for Popular Democracy. “You need good educators — you have to provide academics — and you also need to know how to run a business. … What we’re seeing is folks that don’t know how to do either.”

Jessica Mokhiber, communications director of the Northeast Charter Schools Network, doesn’t agree with the report.

“Charter schools in New York are the most accountable public schools there are,” she said. “If they don’t perform, they close. Each year they are subject to outside audits. If they mismanage their finances, they close.”

The Utica Academy of Science, the city’s sole charter school, declined to comment on the report. Kelly Gaggin, chief communications officer of Science Academies of New York Charter Schools, said the school wants to wait until the comptroller report — the first audit it’s had since its founding two years ago — is released.

She said this will allow the school to “provide current examples and direct correlations that illustrate the checks and balances that are implemented to eliminate opportunities for malfeasance and provide exceptional stewardship of funds.”

They expect the report to be released early next year.

The AQE report found that 24 percent of charter schools in New York have been audited. The Comptroller’s Office audits about 2 percent every year, it said.

Part of what the agency is recommending is to have schools audited regularly with an external system to catch any internal flaws.

“A school could have not committed fraud in 2010, but they did in 2014,” Serrette said. “We’re spending $1.5 billion on charter schools. We need a system in place that makes sure those dollars are reported in some correct way.”

The most alarming part, Serrette said, is that 95 percent of the time the comptroller checked into a charter school’s finances, he found issues — some really bad, some just sloppiness.

Mokhiber said to “consider the source of the report.”

“These are groups who are trying every trick in the book to deny school choice to parents who have no other option,” Mohkiber said.

“The Utica Academy of Science charter school was started by the founders of the Syracuse Academy of Science charter school, which is a highly successful school with a track record of academic achievement,” Mohkiber said. “The Utica school is providing families with another public school option. The school emphasizes a science and technology education in a college prep setting, which sets students up for success in college or career.”

Either way, Serrette said this is something taxpayers should be paying attention to. And while it would cost them more money to hire extra auditors to check on all of the state’s charter schools, it will save money in the long run.

“You could hire more auditors to look at charter schools for $5 million, but if you end up catching $10 million of mismanagement, you’re $5 million ahead,” Serrette said.

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