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Home » CER in the News » Ahead of other states, D.C. charters need equal funding, better fiscal oversight

Ahead of other states, D.C. charters need equal funding, better fiscal oversight

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By Moriah Costa
March 23, 2015

WASHINGTON, D.C. — The charter school program here is ranked among the strongest in the country, but advocates and city officials say equitable funding and tighter fiscal controls are needed.

The pro-charter Center for Education Reform ranked the District as the No. 1 charter sector in the country for the seventh consecutive year.

Kara Kerwin, president of the nonprofit, said D.C scored so well, in part, because other states have done so little. Meanwhile, D.C. charter laws that foster autonomy and competition have improved traditional schools, she said.

“We know that when teachers have autonomy, we know that when people can choose, we see that all of our schools do better,” Kerwin said.

The D.C. charter board works to ensure schools are performing well academically and will close schools for poor academics — factors that have helped D.C. maintain its top standing, she said.

“Performance-based accountability is the hallmark of charter schools, and in D.C. they actually do close schools or they give them to some other organization that is better equipped to do it,” she said. “In our traditional public school system, we don’t do that.”

About 44 percent of students attend  D.C. charters.

CER’s scorecard criticized the city for a lack of equal funding for charter and traditional schools. The nonprofit supports a lawsuit that alleges the city shorted charter schools by $770 million — or $1,600 to $2,600 per student —since 2008.

Funding in the district is allocated on a per-pupil basis, with the traditional public schools receiving money based on estimated enrollment while charter schools get money based on actual enrollment. Still, a city commissioned report found D.C. public schools often receive additional money from other government agencies.

Need for more fiscal accountability

A city audit found that while fiscal oversight has improved in the past three years, the city’s charter board needs to do more, city officials say. The audit found the board was unable to provide some contracts between charter schools and companies involving more than $25,000. The board is required to review contracts exceeding that amount.

The audit also recommended the D.C. Council require for-profit management companies to disclose their finances to the charter board. The recommendation comes in light of two pending lawsuits that allege charter school for-profit management companies diverted millions in public money for personal gain.

Prosecutors claim Kent Amos, founder of Community Academy Public Charter School, paid himself more than $1 million through a management company. The charter board, citing fiscal mismanagement, revoked the school’s charter last month. The other lawsuit involves the Options Public Charter for at-risk teens. The lawsuit contends three former leaders diverted public money into their management companies. The school relinquished its charter in February and will close at the end of the year.

The charter board said it did not know about the misuse of funds because for-profit management companies are not required to reveal their financial statements. A bill introduced by D.C. Council members David Grosso, I- At Large, and Elissa Silverman, I-At Large, earlier this month would require the companies to reveal financial information to the board.

The audit did not examine academic achievement of charter schools.

In a response to the audit, the D.C. charter board said it hired a specialist to help oversee schools finances and would continue to improve contract oversight. It did not agree with some of the audit’s recommendations, such as providing fiscal policies, because it found it “overreaching and incomplete.”

“The Auditor’s report highlights the continued progress PCSB has made in ensuring public charter schools are good stewards of taxpayer dollars,” Scott Pearson, D.C. Public Charter School Board executive director, said in a statement. “We are encouraged that the D.C. Council, led by David Grosso and Elissa Silverman, has already introduced legislation to strengthen our authority to oversee charter school finances.”

Continued success

Despite accusations of fiscal mismanagement at some schools, charter advocates praise the D.C. charter laws and say states can learn from the district’s charter authorizer. A recent study by the Center for Research on Education Outcomes found — in D.C. and nationally — charters outperform traditional public schools academically.

The National Alliance for Public Charter Schools rated the city ninth in its charter law study and No. 1 in a “Health of the Movement” report, which analyzed how the law is implemented.

“Even though these rankings are important, we still have a lot to do to improve the quality of the laws so that there’s enough funding on the table and so that there’s enough autonomy for charters to start and to do the work that they need to do without additional rules and regulations,” said Nina Rees, president and CEO of the alliance.

Although Grosso’s legislation to provide financial documents to the D.C. charter board would lead to greater transparency, Rees warned that lawmakers should be cautious about passing too many charter regulations.

“Every time you add a new provision to what’s required, you’re taking away one of the key things that makes chartering unique, which is fewer rules in exchange for academic achievement,” she said.