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Report: U.S. government wasted up to $1 billion on charter schools and still fails to adequately monitor grants

Educators from the Acero charter school network protest during a strike outside Chicago Public Schools headquarters in December. (Joshua Lott/Getty Images)

The U.S. government has wasted up to $1 billion on charter schools that never opened, or opened and then closed because of mismanagement and other reasons, according to a report from an education advocacy group. The study also says the U.S. Education Department does not adequately monitor how its grant money is spent.

The report, titled “Asleep at the Wheel” and issued by the nonprofit advocacy group Network for Public Education, says:

  • More than 1,000 grants were given to schools that never opened, or later closed because of mismanagement, poor performance, lack of enrollment or fraud. “Of the schools awarded grants directly from the department between 2009 and 2016, nearly one in four either never opened or shut its doors,” it says.
  • Some grants in the 25-year-old federal Charter School Program (CSP) have been awarded to charters that set barriers to enrollment of certain students. Thirty-four California charter schools that received grants appear on an American Civil Liberties Union list of charters “that discriminate — in some cases illegally — in admissions.”
  • The department’s grant approval process for charters has been sorely lacking, with “no attempt to verify the information presented” by applicants.
  • The Education Department in Republican and Democratic administrations has “largely ignored or not sufficiently addressed” recommendations to improve the program made by its own inspector general.

“Our investigation finds the U.S. Department of Education has not been a responsible steward of taxpayer dollars in its management of the CSP,” it says.

The Education Department did not respond to questions about the study’s findings. The report has been given to members of Congress with education oversight authority.

Charter schools are publicly financed but privately operated, sometimes by for-profit companies, and they have become a controversial part of the “school choice” movement that has gained ground throughout the country over the past few decades.

Today, about 6 percent of U.S. schoolchildren attend charter schools, with 44 states plus the District of Columbia, Guam and Puerto Rico having laws permitting them. Some states have only a few charters while others have many. California has the most charter schools and the most charter students; in Los Angeles, 20 percent of children attend such schools. In the District, almost half of the city’s schoolchildren go to charter schools.

There's a backlash against charter schools. What's happening and why.

Supporters first described charters as competitive vehicles to push traditional public schools toward reform. Over time, that narrative changed, and charters were touted by supporters as offering choices for families who wanted alternatives to troubled schools in traditional systems.

Charter backers say the 30-year-old movement is an important feature of America’s education landscape, and the problems it faces are expected growing pains. They say many charters are superior to the traditional public schools near them.

Opponents say that charters are part of an effort to privatize public education, that there is little public accountability over many of them and that they drain resources from the traditional districts where the vast majority of children attend school. They say many traditional schools are superior to the charter schools near them.

The report, subtitled “How the Federal Charter Schools Program Recklessly Takes Taxpayers and Students for a Ride,” was written by Carol Burris, executive director of the Network for Public Education and a former award-winning New York high school principal, and Jeff Bryant, a communications expert and advocacy journalist who is now chief correspondent for the Independent Media Institute’s “Our Schools” project. The Network for Public Education, co-founded by historian and advocate Diane Ravitch, advocates for public education.

Burris and Bryant said they are asking Congress to stop funding new charter grants through the CSP, undertake “thorough audits of previous grant awards” and adopt measures to ensure that existing grant money is used responsibly.

The National Alliance for Public Charter Schools, an advocacy group, did not immediately respond for comment Monday.

A number of civil rights organizations have called for a moratorium on new charter schools, including the NAACP and the Black Lives Matter movement. California’s new governor, Gavin Newsom (D), has formed a task force to review the impact that charter schools have on traditional public school districts amid a growing backlash against unfettered charter expansion in some parts of the country.

Burris and Bryant said they spent months reviewing the federal Charter School Program, which began in 1994 with the aim, the department says, of providing funding “to create new high-quality public charter schools, as well as to disseminate information about ones with a proven track record” and to “replicate and expand successful schools.”

Democrats and Republicans in Congress and in the White House have consistently supported the program.

Teachers who have gone out on strike in recent months, including in Los Angeles, Denver and Oakland, Calif., have cited the spread of charter schools as one of the challenges they see for traditional public systems.

The federal government conducted the last major analysis of its Charter Schools Program in 2015, when it said the program had provided $3.3 billion since its inception to fund the creation, replication and expansion of charters. Since then, the department has not updated the list of schools that have received grants. Burris and Bryant estimated in their report that program funding “has grown to well over $4 billion” and that up to one-fourth of that has been wasted.

The authors said they examined the program’s application process and compared claims made by charter grant applicants with information in state databases and on school websites. They found grants being given “without scrutiny” of applicants’ claims.

As a result, numerous grant recipients claimed they would try to enroll high percentages of minority and disadvantaged students, even while their programs and policies were designed to draw from advantaged populations.

Only in 2015 did the department put restrictions on one of its grants, to the Ohio Department of Education. That state’s charter sector has long been known as scandal-ridden. A May 2015 report in the Akron Beacon Journal — which federal officials apparently missed — said:

No sector — not local governments, school districts, court systems, public universities or hospitals — misspends tax dollars like charter schools in Ohio.

The not-to-be believed letter sent by U.S. Education Department to Ohio

The Education Department’s office of inspector general has over the years issued reports citing problems with the program, most recently in 2016. It found that of the 33 schools it reviewed, most had conflicts of interest with the organizations managing them, known as charter management organizations (CMOs).

Burris and Bryant wrote: "We found troubling examples of CMO’s that received massive grants that engaged in practices that push-out low-performing students, violate the rights of students with disabilities and cull their student bodies through policies, programs and requests for parental donations.”

But, they said, the Education Department took little or no action on recommendations to fix the problems identified in the 2016 report or the previous ones from the inspector general.

Here’s the new report: