Go Read It: Truthout — Charter Schools Outsource Education to Management Firms, Often With Poor Results

Ohio is a state considered charter school-friendly. This Truthout article talks about the success of corrupt for-profit charter management organizations in collecting taxpayer subsidies and the failure of those same schools to provide an adequate accounting of school spending given poor student achievement measures. Currently a lawsuit between the state of Ohio and many White Hat schools against White Hat Management demands transparent accounting to explain why $230 million in taxpayer money was spent to have only 2% of White Hat schools meet No Child Left Behind’s Adequate Yearly Progress benchmark.

Charles R. Saxbe, the attorney representing White Hat in the lawsuit, said the company has complied with its legal and contractual requirements. He said that public funds become private once they enter White Hat’s accounts. [emphasis mine]

“If I’m Coca-Cola, and you’re a Coca-Cola distributor or a Coca-Cola purchaser,” said Saxbe [White Hat Management’s attorney], “that doesn’t entitle you to know the Coke formula or find any financial information you’d be interested in learning from the Coca-Cola company. And that’s kind of what they’re demanding.”

“Governing boards are purchasing the service and whatever it takes to deliver that service from White Hat,” Saxbe said. “And if White Hat loses money, that’s their risk. And if they make money, that’s their upside.”

But the boards say that students, not White Hat, carry the greatest risk—the risk of failing in school.

“We give the management company 96 percent of the revenues from the state, and they do not have a transparent means for us to see what’s happening with the money,” said [James] Stubbs[, former board member of a White Hat school]. “What I am concerned about is students not doing well under this management company, and that can’t continue,” he said.

Read for more details on for-profit charter school management companies. A bill sponsored in the 111th Congress calling for Charter School Good Governance and Transparency could eliminate much of the waste, fraud, and corruption that individual schools and state school boards are now having to fight on a case-by-case basis. A national law regulating charter school management would reduce confusion and not allow individual schools to hide behind gaps in oversight if the parent management organization operates across several states.

But oversight of the industry has lagged, resulting in a patchwork of state and district regulation, which experts say is failing to safeguard the interests of children and taxpayers.

Some states do not directly oversee either the company or the board and do not regulate the terms of their contracts. In many cases, the bulk of the oversight is left to “authorizers,” organizations empowered to green-light charter schools. Some states have many authorizers—which can include tiny nonprofit organizations—while others entrust the task to public universities, local districts or other specially created entities, many of which lack the resources needed to effectively carry out their role, according to Columbia’s Levin.

Because the bill proposing to consistent regulation of charters was proposed in the 111th Congress last fall, we may not see it again unless proposed in the 113th Congress or unless it’s offered as an amendment to the re-authorization of No Child Left Behind (the Elementary and Secondary Education Act).

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