MEDICINE FOR WHAT AILED US
Bringing marketplace principles to education
Charter schools first took hold in Florida in 1996, amid worries of overcrowded classrooms and poor student performance in urban school districts. They were seen as a cure for many of the problems in public schools, bringing innovative techniques and smaller classes to populations of students struggling to keep up. Charter schools were also designed to give parents more choices, and bring the principles of the marketplace to public education. Competition from charter schools was expected to force public schools to adapt and improve.
In many ways, the plan succeeded. Florida now has 519 charter schools — from small, specialized schools tucked in strip malls and churches to sprawling new campuses with 3,000 kids from kindergarten to 12th grade.
Some charter schools rank among the highest in the state in academic performance. School districts in Miami-Dade, Broward and around the state have responded to the competition by creating more magnet schools and specialized programs.
By design, charter schools are unshackled from many of the bureaucratic rules of traditional public schools, with independent school governing boards making most decisions instead of the local school district. Charter school advocates say this freedom is needed for schools to be creative and nimble, and to encourage start-ups.
While this freewheeling system has minimized the oversight of school districts, it has given rise to a cottage industry of professional charter school management companies that — along with the landlords and developers who own and build schools — control the lion’s share of charter schools’ money.
In Miami-Dade and Broward, about two in three charter schools are run by management companies, which charge fees ranging from 5 to 18 percent of a school’s income. These fees can exceed $1 million a year at a large charter school.
Some management companies handle only school finances, while others control the budget, hiring and the curriculum.
In some cases, the managers effectively take over the schools, using financial leverage to render the schools’ governing boards “irrelevant,” said Pam Hackett, a retired legislative aide who has served on the boards of five Broward County charter schools.
“They push the little guy into a corner where they can’t afford to do anything but acquiesce or go out of business,” Hackett said.
Two years ago, Hackett sparred with the Leona Group, a Michigan-based management company, after the company removed a popular principal from two affiliated Hollywood charter schools on whose board she serves — Sunshine Elementary and Paragon Academy of Technology. When the board tried to rehire the principal, the management company objected, saying it alone had that power.
“They basically told us: ‘According to the contract, we can do whatever we want,’ ” Hackett said.
The board had other complaints with Leona: The management company refused to provide school records, including contracts and spending documents, and failed to follow the school’s education plan, school officials said. The board canceled Leona’s contract in July 2009.
When school officials later tried to access the schools’ bank accounts, Leona refused to give up the money — and its lawyer accused them of attempting to steal it, court records show.
Leona “is committed to criminally prosecuting those individuals responsible for their attempted theft from the account,” attorney Jeffrey Wood wrote in a letter to the schools’ attorney. The dispute is now in litigation.
Leona executives did not return phone calls seeking comment.
Hackett says the schools now operate without any for-profit managers; instead, the principals make all financial and educational decisions. “Overall, it’s cheaper and more efficient and more accountable,” she said.
Many charter schools depend on management companies not just for expertise, but for cash. Schools often borrow money from the managers, creating an uneasy arrangement that can stifle a governing board’s independent oversight.
The Leona Group, for example, gave more than $360,000 to four Broward charter schools — money described as gifts in the schools’ financial reports. But in court papers, the management company said the payments were really loans disguised as gifts to make the schools appear financially sound.
“The funds were referred to as a ‘one-time gift’ so that the schools would not have to show the funds on their balance sheets,” the management company’s lawyers wrote. The schools insist the payments were gifts, not loans.
It is not uncommon for management companies to give or lend money to schools to get them up and running, said Jonathan Hage, president of Charter Schools USA of Fort Lauderdale, one of the region’s largest charter school operators.
Most charter schools lose money in the first year or two as they try to expand enrollment while paying rent, construction costs and other start-up expenses, he said. In addition, new charter schools often find it difficult to get financing from banks.
Hage and other charter school supporters say the state’s funding formula for charter schools is inadequate, making it difficult for smaller schools to survive without assistance. Hage’s company benefits from scale, he said. “Being able to spread overhead costs over many schools and many students helps.”
Statewide, about one in four charter schools have shut down since 1996, either voluntarily or at the command of local school districts — double the national average. Most schools close for financial rather than academic reasons.
Read more: http://www.miamiherald.com/2011/09/19/v-fullstory/2541051/florida-charter-schools-big-money.html#ixzz1gJz09WNY
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