Charters: The new face of American greed by Jason Engerman

Charter schools are public schools operated by nongovernmental organizations. Although the law varies by state, in Pennsylvania, charter school operators are granted financial, curricular, and operational autonomy. This opinion piece argues that the financial autonomy of charter schools should be severely curtailed, as there are multiple examples of charter schools abusing public money. When public money is given to large private agencies with minimal oversight, these businesses often fill their pockets at the public expense. Non-profits have also shown suspicious activity in their dealings with charter school funds. Although charter schools’ financial autonomy can provide benefits, the cons outweigh the pros.

Private Business in Charter Schools

The privatization of public education has led to public monies being transferred to private organizations. Unfortunately, this is when the money trail becomes blurred, as big businesses line their pockets with public funding. For example, in June 2012 the FBI raided the office of Pennsylvania Cyber Charter School founder, Nick Trombetta. Trombetta was accused of pumping charter school funds into private, for-profit organizations run by his former executive officers (Sheehan, 2012). Non-profits also have behaved questionably when it comes to charter finances. The FBI also investigated Pocono Mountain Charter School, which is located inside the Shawnee Tabernacle Church. The investigation discovered that $765,763 of taxpayer funds went to building improvements that benefited the church (Wagner, 2012).

A third example comes from Dr. Jessie B. Ramey’s Pittsburgh-based education blog, Yinzercation. Ramey follows the money trail between Pennsylvania’s top political donors and charter schools. For example, Van Gureghian, who was Gov. Corbett’s single largest campaign donor, owns a company that operates 150 charter schools in nine states (Ramey, 2010). Despite this, the Pennsylvania Department of Education continues to approve charter applications. Such flagrant misuse of taxpayer funds is unacceptable from any institution, let alone a public institution. Privatization of public schools opens the door for impropriety such as this.

Take Private Business out of Public Education

Because private companies view charters as business enterprises, private companies have no place in public education. Private business owners, such as Trombetta, view charter funding as “cash cows” (Ramey, 2010). In August 2012, CNBC’s financial program Street Signs interviewed David Brian, CEO of Entertainment Properties Trust, about whether or not to invest in the charter school sector. Brian referred to charters as “very stable business, very recession-resistant.” He added, “It’s a public payer…if you do business with states with solid treasuries, then it’s a very solid business” (“Invest in public charter schools?, 2012). Brian’s statements demonstrate how private corporations view charter schools as businesses, first and foremost. Their priorities are in their profits, not the well being of the students. Given the business mindset of charter school financial administrators, targeted policy reforms are needed to improve financial accountability within charter schools. These reforms should begin with limiting or eliminating private organizations from controlling charter funding.

Charter Finances Need Transparency

A second suggestion for policy reform is to limit charter schools’ financial autonomy. PA Cyber Charter has accrued large cash reserves of more than $13 million, resulting from obtaining more per-pupil funding than it spends each year (Vidonic, 2012). Some Pennsylvania charters are known to spend millions of dollars on advertisements. PA Cyber Charter was criticized by the Auditor General for inappropriately using millions in public funding for print, TV and radio advertising (Vidonic, 2012; Wagner 2012). To combat this, PA state representative Mike Fleck has introduced House Bill 2364 (2012), to attempt to rein in charter school spending. The bill stipulates that the charter shall receive only the actual expenditure that they have submitted in the most recent fiscal year (House Bill 2364, 2012) This bill is heading in the right direction to provide more transparency within charter financial operations and reduce abundant spending. A transparent process should be in place for charter school finances to ensure that charters receive only necessary financial support to educate each student.

Because states allow such significant financial autonomy to charters, I believe that Pennsylvania legislators should establish more regulations on charters and reduce their ability to become “cash cows” for private organizations.  As policymakers craft the level of accountability that charters will be subject to, they should also consider the extent to which these freedoms may be abused. To avoid these issues, charters need targeted policy reforms for financial accountability within charter schools. Charter authorizers should remove or limit private businesses from managing public funds through charters. Secondly, charters schools’ budgets must be more transparent and balanced. If these boundaries are clearly established and fully monitored by charter school authorizers, then some of the financial misuse by charters and their financial managers may be avoidable.

Dr. Engerman is an assistant professor within the Digital Technologies Department at East Stroudsburg University where he teaches courses in Digital Media Technologies, emphasizing sports, entertainment, executive coaching and digital media technology for underrepresented populations. He earned a Ph.D. in Learning, Design, and Technology from The Pennsylvania State University, focusing on intersection of underrepresented populations and their sociocultural uses of interactive digital media (such as video games) within native learning ecologies. Dr. Engerman is the PI for a National Science Foundation Innovative Technology Experiences for Students and Teachers Award to leverage Esports as a STEM career development tool for at risk youth.

References

House Bill No. 2364. (2012). General Assembly of Pennsylvania. Retrieved fromhttp://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2011&sessInd=0&billBody=H&billTyp=B&billNbr=2364&pn=3655

Invest in public charter schools? Television interview with David Brian. (2012, August 15) Street Signs: Live News on Mergers and Acquisitions. CNBC Video. Retrieved from http://video.cnbc.com/gallery/?video=3000109398&play=1

Ramey, J. (2010). Charters are Cash Cows. Yinzercation Blog. Retrieved from http://yinzercation.wordpress.com/2012/10/22/charters-are-cash-cows/

Sheehan, A. (2012). FBI Raids Office Of PA Cyber School Founder. CBS Pittsburgh. Retrieved from http://pittsburgh.cbslocal.com/2012/07/12/fbi-raids-office-of-pa-cyber-school-founder/

Vidonic, B. (2012). Trib Live News. Auditor general criticizes PA Cyber Charter School surplus, urges changes in state funding. Retrieved from http://triblive.com/news/adminpage/3090525-74/charter-cyber-schools#axzz2JgSJHkxq

Wagner, J. (2012, February). Pocono Mountain Charter School, Monroe County, Pennsylvania, Performance Audit Report. Office of the Auditor General of the State of Pennsylvania. Retrieved from http://www.auditorgen.state.pa.us/Reports/School/schPoconoMountainCharSch20812.pdf