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U.S. Audit Warns of Cronyism Between CMOs and Charters

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A federal audit warns that cozy relationships between charter schools and the organizations that run some of them could put federal funding at risk.

The audit by the U.S. Department of Education's inspector general's office found so little independence between the schools and their charter-management organizations that it could lead, and has led, to trouble.

The audit examined 33 schools in six states and cited several examples of conflicts of interest, related-party transactions, and insufficient separation of duties—all controls designed to prevent fraud. The lack of proper guardrails, the audit concludes, significantly increases the risk that federal programs are not being implemented correctly and are wasting public money.

Vol. 36, Issue 08, Page 4

Published in Print: October 12, 2016, as U.S. Audit Warns of Cronyism Between CMOs and Charters
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