As the deadline for round two of the federal Race to the Top grant competition loomed in May, the New York state legislature passed a contentious bill that symbolizes the nation’s hopes and fears for the charter school movement. New York raised the cap on the number of charter schools allowed in the state from 200 to 460, expanding future educational opportunities for thousands of children. And it prohibited new charter schools from hiring for-profit companies to manage those schools, thus constricting the range of the new opportunities.
Opponents of charter schools have long highlighted abuses by a small number of for-profit management companies as a reason to oppose all charter schools. And proponents of charters have too often looked the other way or perpetuated policies that have allowed these abuses to continue.
The award for the most breathtaking abuse in the nation surely belongs to Ohio. In 2006, the Ohio legislature enacted a law that allows a management company to fire the charter school governing board to which it supposedly reports and to replace that board with individuals who are more to its liking. This law turns the concept of accountability on its head. Yet the White Hat Management company is currently doing just that, taking action to remove the boards of 10 charter schools, presumably to prevent those boards from firing the company.
The chief executive officer of Imagine Schools didn’t wait for any state legislature to pass a law. He urged his staff to get undated letters of resignation from all board members and to remove members who didn’t behave to Imagine’s liking. “It is our school, our money, and our risk, not theirs,” he wrote. He’s wrong. It is a public school, it is the public’s money, and the risk is being borne by thousands of parents and students who enroll at an Imagine school.
Across the nation, most charter schools are run directly by the nonprofit boards that applied for their charters. But many charter school governing boards have hired management organizations to run their schools under contract. Thousands of students are receiving a high-quality education from charter schools operated by management organizations, both for-profit and not-for-profit. They are producing higher test scores, keeping more students in school, and sending more students to college. The most well-known for-profit company is Edison Learning, and the most well-known not-for-profit is the Knowledge Is Power Program, or KIPP, but there are dozens of others.
Because these school management organizations are purposely built to grow and open more schools (as opposed to single-school charters), the quality of growth in the charter sector depends a great deal on the quality of these organizations and the oversight they receive.
How is a parent, school official, or legislator to know the difference between a charter school with a strong governing board that provides appropriate oversight and a weak board that is open to abuse? Here are six criteria for ensuring strong governance and oversight, regardless of whether the management organization is a for-profit or a not-for-profit concern:
How is a parent, school official, or legislator to know the difference between a charter school with a strong governing board that provides appropriate oversight and a weak board that is open to abuse?
• Members of a charter school governing board should not be employees of the management organization running their school, nor should they be compensated for their service or selected by the management organization.
• A charter school governing board should have an independent attorney, accountant, and audit firm working for it, not the management organization.
• The governing board and the management organization should enter into a contract that defines each party’s rights and responsibilities. That contract must lay out the specific services provided by the management organization and the fees for those services. It must also allow for the board to terminate the management organization under defined circumstances and without “poison pill” penalties.
• All public funds paid to the charter school should be paid to and controlled by the governing board, which in turn pays the management organization for successful provision of services.
• All equipment and furnishings that are purchased with public funds must be the property of the school, not the management organization.
• All loans from the management organization to the school, such as facility loans or those for cash flow, must be appropriately documented and at market rates.
Responsible charter school governing boards and school management organizations will have no problem agreeing that these parameters provide a solid foundation for a successful working relationship. Further, the authorizing agencies that oversee charter schools should not approve any proposal that does not meet these criteria.
New York and other states concerned about these relationships would be well served to put these parameters into law, to enhance quality as the charter school sector continues to grow.
A version of this article appeared in the July 14, 2010 edition of Education Week as Who’s in Charge at Charter Schools?