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Feds Give Away $150M For Charter Expansion, Ask States To Keep A Closer Eye on Charter Finances

By Carolyn Phenicie | September 28, 2015

The U.S. Department of Education is doling out more than $150 million in grants to help boost charter schools at the same time as officials are asking states to keep a closer eye on charters’ finances and management practices.

“Amazing charter schools simply cannot remain outliers. They are a powerful demonstration of the achievements possible when students are given real opportunity,” Education Secretary Arne Duncan said on a call with reporters Monday afternoon. The department will give $125 million to eight states and the District of Columbia, and $32 million to 12 charter management groups.

The department released a “Dear Colleague” letter in conjunction with the grants, reminding state education departments that they have a role in ensuring federal funds accessed by charters “are used for intended, appropriate purposes.”

“We still see too many reports of unscrupulous or sloppy behavior” from charter operators and authorizers, Duncan said. Increased oversight by states is both “exactly what our children deserve” and a prudent way to allocate scarce tax dollars, he said.

Although many charters are effectively managed, the department’s most recent inspector general report identified examples of conflicts of interest between charter schools and their management organizations, and charters with problematic financial and management practices, the letter said.

The letter includes specific recommendations for operational oversight, relationship transparency between non-profit charter management organizations and for-profit educational management organizations, and strong authorizing practices.

Duncan admitted that “there’s not a lot at the federal level we can do,” to force better management practices, but said the department can “challenge states” to have better oversight.

Only high-quality charter operators that demonstrate both student achievement and sound management practices are eligible for the grants, a department official said. States that receive grants must require charter authorizers to re-evaluate charter schools at least every five years, on both their student results and financial practices.

State grants will go to Arizona, Colorado, Illinois, the District of Columbia, Ohio, Oregon, Nevada, and South Carolina. States will use the funds to run state-level grant contests that should support about 400 new and expanded charters, according to a release from the Education Department.

The charter sectors in several of those states, notably Ohio, have come under widespread criticism for poor results, financial mismanagement and corruption. An Education Department official said Ohio has put some good mechanisms into place to improve school quality and financial oversight, and the grant ($32.6 million this fiscal year, the largest of any state receiving an award) should allow the Buckeye State to focus on quality.

A strong charter reform bill unanimously passed the Ohio Senate in June but the bill was pulled by the Ohio House speaker before it could be approved. Advocates for charter reform in Ohio have expressed hope that tighter controls will soon be adopted in a state whose charter sector has been compared to the “Wild, Wild West.”

A total of $32 million to expand and replicate successful charters will go to 12 charter management organizations: Achievement First (Connecticut), Across the Bridge Foundation (California), Baltimore Curriculum Project (Maryland), Einstein Group (Louisiana), Lawndale Educational and Regional Network (Illinois), Mastery Charter High School (Pennsylvania), Noble Network of Charter Schools (Illinois), RePublic Schools (Tennessee), Success Academy Charter Schools (New York), UP Education Network, Inc. (Massachusetts), Uplift Education (Texas), and West Denver Prep/Strive Preparatory Schools (Colorado). (Read The Seventy Four's take on how Boston's Up Academy, a grant recipient, is posting big gains in student proficiency.)

“This investment will propel us forward in the pursuit of our mission to reimagine public education in the South,”  Ravi Gupta, RePublic’s co-founder and CEO, said of the $9.6 million his CMO received. “Because of this grant, these states will expand college opportunity to previously underserved students, and spur 100-plus fold increases in the number of students of color who will take and pass the AP Computer Science exam in the years to come.”

Both states and the charter management organizations will get additional funding in future years if Congress appropriates sufficient funds.

The department also said it plans to release “initial data” on the more than 4,000 charters funded under the charter schools program since its inception. Duncan said the department hopes to release the data “in the coming weeks” but was not more specific about what kind of information would be shared.

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