Charter Closings Come Under Scrutiny

Few states have more warmly embraced charter schools than Minnesota.

Since the first of the publicly financed but largely independent schools opened in St. Paul nine years ago, light regulation and broad political support have allowed them to multiply at a rapid clip. Governors and legislators have been generous in funding them, and school districts and other organizations have been quick to sponsor them.

That was before two St. Paul schools lost their charters last year because of financial mismanagement and shut down in the space of four months— disruptions that sent families and educators scrambling to find classroom space for 1,000 displaced students. Now, some Minnesota policymakers are questioning how much autonomy charter schools should have, and some districts are putting the brakes on sponsoring new ones.

“Academics in many cases has skyrocketed, and that’s the plus side,” said state Rep. Harry Mares, a Republican, who chairs the House education committee and supports charter schools. “But we need much better oversight so we don’t have schools closing in the middle of the year.”

Of the 2,150 charter schools that have opened across the country since 1992, only 86, or 4 percent, have closed, according to a new report from the Center for Education Reform, a Washington-based organization that backs educational choice.

But whether that figure shows the movement is succeeding or failing is a matter of growing debate.

Charter supporters argue that the low number of closings in Minnesota and elsewhere suggests both that most such schools are working and that they’re being held accountable for their performance when they fail—especially when compared with regular public schools, which generally face little threat of being shut down.

Fourteen states have the legal authority to shut down regular K-12 schools that are failing, but only New York, Maryland, Oklahoma, and Texas have taken such a drastic step. While some closures may take place at the district level, closing a school for poor performance remains a relatively rare occurrence.

“Charters are being held to a higher standard than traditional public schools, but it’s a good restraint,” said Katherine K. Merseth, the director of the school leadership program at Harvard University’s graduate school of education and an avid proponent of charter schools. “If we had a situation where none were closing, I’d see that as a sign that there is no accountability, and the whole theory of charter schools rises and falls on being able to hold these schools accountable.”

The number of closures so far “is not a warning sign that the movement is in trouble,” Ms. Merseth added.

Others, however, maintain that the closure figure is low because weak oversight allows many subpar charter schools to slip by undetected. Only seven of the 86 schools have closed because they failed to meet academic goals, according to the CER report. And many of the others shut down voluntarily, rather than being forced to do so by state officials or another chartering authority.

“If charter schools are tools for improving student achievement, we would expect to see some schools that aren’t doing that and being closed down,” said Joan A. Buckley, an associate director of the American Federation of Teachers’ education issues department. “That we don’t see that indicates a lack of reasonable accountability, and states need to address that in legislation.”

Financial Management

When charter schools close, money is usually one of the reasons.

A St. Paul-based company called Right Step Inc., for instance, made headlines in three states last year when schools it ran in St. Paul, Greenville, N.C., and Phoenix had their charters revoked amid charges of mismanagement. Success Academy, a St. Paul school run by a local management company, shut down owing $1.4 million to its employees, the state, and the school district.( “Troubled St. Paul Charter School Closes Early,” June 14, 2000.)

The CER report, titled “Closures: The Opportunity for Accountability,” blames 33 of the charter school closures to date on mismanagement; those schools are the true “bad apples,” the organization says. Another 32 closed for “involuntary” financial reasons, such as lack of enrollment or funding.

“If money hadn’t been an issue from the very beginning, these schools wouldn’t be closed,” Jeanne Allen, the president of the CER, said of the latter group.

In North Carolina, where state officials have closed six charter schools in addition to Right Step Academy, and roughly a dozen schools have given up their charters before they opened, financial woes are at the heart of most failed efforts.

Many charter school operators “have good motives, but the problem is not knowing how to run a business,” said Kathy A. Taft, a member of state board of education who headed the board’s review of two troubled charter schools that were ultimately closed. “With Right Step, it’s really a shame, because the school was serving some children who probably needed what it offered,” Ms. Taft said.

Thirteen charter schools nationwide have closed because of problems in finding a facility to hold classes, according to the Center for Education Reform. The group argues that burdensome zoning regulations and community opposition are often contributing factors.

The CER left out of its national tally of closures those schools that had received charters but never opened, reasoning that those cases should not be counted as failures.

“It’s not as if they took the money and ran—they’re not out there buying Ferraris,” Ms. Allen said. “If they get to the beginning of the year and it’s not possible for them to open, that’s not so much a flaw in the charter school as a flaw in the [level of] support and training given to them.”

But some critics disagree. The Texas Freedom Network Education Fund argued in a report last fall that thousands of dollars in taxpayer money are lost when a charter school fails to get off the ground.

As one example, the group noted that a charter school in East Texas received monthly start-up payments from the state for nearly a year totaling more than $240,000, but failed to teach a single student. In all, nine proposed schools in the past three years were granted charters in Texas but never opened for business.

A Tough Process

The number of failed charter schools is likely to increase in the coming years.

In several states that began allowing charter schools only in the past couple of years, the schools have not yet gone through the review process that typically determines whether their contracts are renewed. In time, more states may have to grapple with the difficulties Minnesota is encountering now with its older schools.

“Policymakers will have to decide what is an acceptable level of closures,” said Erik Hirsch, a senior analyst with the National Conference of State Legislatures in Denver. “We’re entering a time when this will become more of a focus now that the charter school population is more mature and, more to the point, now that many are coming up for their first evaluations.”

Officials of the CER and other like- minded advocates say they would welcome more charter school closings when they’re warranted, but they add that regular public schools should be subject to the same scrutiny.

“Policymakers need to start asking the important question: not whether or why a charter school is closed, but why, when other schools fail to show progress and cease serving children, that same level of accountability doesn’t exist and result in their closure,” Ms. Allen said.

How and when charter schools are closed varies widely from state to state, experts say. In some cases, charter sponsors, which can include state agencies, local districts, universities, and other groups, have broad discretion over whether to revoke a school’s charter. Some laws, as in Minnesota and North Carolina, provide an appeals process for schools whose charters are revoked by local sponsors. Still others, like New York, give a state agency the first and final word.

“Because most of the schools have closed because of financial problems and mismanagement, [the closure process has] been pretty clear-cut,” said Amy Berk Anderson, a co-director of the National Association of Charter School Authorizers, based in Louisville, Colo. “But in terms of closing schools for academics, for the most part there aren’t any clear processes in place to be able to judge whether [laws are] fair.”

When a school does unexpectedly close its doors or must be shut down, the educational process is disrupted, and students and their families are often left adrift.

“We’re very concerned about the effect on students and families of charter school students, and the effect on the schools [receiving the displaced charter students],” the AFT’s Ms. Buckley said. “When you have kids coming into a school in the middle of the year who may be behind and you have no records, ... that can cause problems.”

Those on the front lines say closing a school—any school—is painful for everyone involved.

“It’s not a fun process,” said Grova L. Bridgers, the director of the North Carolina education department’s charter school office. “Revocations are tough on students, they’re tough on the community, they’re difficult on our agency in terms of having to hold [school operators’] feet to the fire, and they’re tough on those who dream.”

Ties That Bind

As the number of closings increases, greater attention is being paid to the relationship between charter schools and the organizations charged with overseeing them.

“We have not had a lot of practice writing clear and measurable goals for schools and then holding them accountable,” said Joe Nathan, a leading advocate for charter schools and the director of the Center for School Change at the University of Minnesota. “I think one of the expectations a number of us had was that school districts and states would be more than willing to exercise a good deal of supervision of these schools. But in some states, there’s been less of that than we’d like, and we’re learning from that.”

Without a template or rule book, many charter schools and their sponsors have been feeling their way. The trick, experts say, is deciding where to draw the line between autonomy—which is central to the charter idea—and accountability.

“I think our first-year schools are probably at a greater disadvantage than the newer schools that go through more precharter workshops and have a better idea of what they’re in for,” said Cassandra A. Larsen, the executive director of the Arizona State Board for Charter Schools, which sponsors 158 charters and keeps tabs on 254 school sites. “With the schools that opened in the first two years [of the state charter program], it was basically, ‘Here’s your charter, and good luck.’”

The same was true for the first charter schools in St. Paul, a generation that included Right Step Academy and Success Academy. The 45,000- student district revamped its process and standards for renewing charters last year, just before the two troubled schools came up for review. The problems the district uncovered convinced district officials they would have to dedicate more time and resources to their sponsorship duties.

“To a great extent in St. Paul, it was ‘OK, you’re sponsored, we’ll see you in three years,’ ” said Kent F. Pekel, the executive assistant to district Superintendent Patricia A. Harvey. “We learned the hard way that causes problems.”

Gov. Jesse Ventura has proposed increasing aid to charter schools by $50 million—more than double the amount allocated for the past two years. But some policymakers and district officials are demanding that more money be dedicated to oversight.

Rep. Matt Entenza, a Democrat who represents St. Paul, recently released a review of 50 charter schools across the state and concluded that most are beset with financial and managerial problems. He introduced a bill last week that would require charter schools to disclose how they’re spending public money and institute proper financial controls.

“Unless states set clearer accountability systems, unscrupulous individuals will use charter schools as a way to make money and divert money away from kids to enrich themselves,” he said. “I think if we don’t pass legislation, we’ll continue to see confidence in the charter schools movement erode.”

Funding for this story was provided in part by the Ford Foundation, which helps underwrite coverage of the changing definition of public schooling.