Audit: Feds Failed to Track How States Spend Charter Money

By Andrew Ujifusa — October 25, 2012 2 min read
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cross-posted from Charters and Choice


An audit of charter school spending by the U.S. Department of Education has found that federal officials have not properly monitored how states have spent that money, and also found particular oversight problems at the state level in Arizona, California, and Florida, according to the Associated Press.

The report from the U.S. department’s office of the inspector general found that the department’s office of innovation and improvement (which oversees grants to states for charter schools, as well as direct grants to charters) did not check if states followed federal regulations for using the money, and did not keep track of how individual charters used the grants. [The item has been corrected to show that WestEd was not a contractor for the inspector general’s office for the audit.]

The full report from the inspector general can be read here. From 2007 to 2011, the department provided $940 million to charter schools through the various grants.

In its executive summary, the report stated that the U.S. department “did not have an adequate corrective action plan process in place to ensure grantees corrected deficiencies noted in annual monitoring reports, did not have a risk-based approach for selecting non-SEA [state education agency] grantees for monitoring, and did not adequately review SEA and non-SEA grantees’ fiscal activities.”

Readers may remember that over the summer in Philadelphia, following an FBI investigation, a charter school founder, Dorothy Brown, made headlines when she was charged with defrauding three charter schools of $6.5 million between 2007 and 2011.

The inspector general report found state-level problems in Arizona, California, and Florida, related to how they monitored their own activities related to the grants. (Combined, the two states received $275 million in charter school funds from 2008 to 2011.) There were a variety of criticisms for how these states monitored how charter money was spent. Arizona, for example, “could not provide written procedures outlining the process for a charter school closure,” while California did not adequately document how it tracked assets from closed charter schools. All three states were criticized for not adequately monitoring charter schools receiving grants from their state education departments.

The report also stated that by the time the innovation and improvement office called the Florida education department to address previous problems identified in a 2008 monitoring report, WestEd had already made another monitoring visit to the state in February 2011.

In an Aug. 30 response to the report, from the federal office of innovation and improvement said that subsequent to the audit, it has implemented a “risk assessment process” for new and continuing grant programs, and has taken other steps to correct the oversight problems.

A version of this news article first appeared in the State EdWatch blog.