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Charter Schools, Education, GERM (Global Education Reform Movement), New Zealand, Privatisation of state schools, UK Schools, USA Schools

Charter School Fraud and Mismanagement

Charter schools are sold with the promise of innovative teaching, greater freedom, and the magical word “choice”.  And it’s fair to say that in some cases they deliver.  Some charter schools do great things, as do some state schools, so what’s the problem?

Promise v. Reality

The charter school  promise all to often fails to match the delivery.

PR, sound bites and glossy brochures might sell a school as doing amazing things.  The desks might be new, and you might get your uniform paid for or other benefits that individual parents find hard to resist, especially if they are having trouble making ends meet as it is.  And some of those schools will be doing just what they say they are, a good job.

But far too many aren’t, and the level of fraud, mismanagement and dirty doings that is uncovered on a weekly basis is staggering.

In too many cases worldwide, we have seen that corporate greed and money-grubbing individuals use charters as just another opportunity to rort the system for profit.

The truth is, the charter school system is all too often co-opted by charlatans.

Personal Piggy Banks

swag theft moneyRupert Murdoch gleefully declared for-profit public education “a $500 billion sector in the U.S. alone that is waiting desperately to be transformed.”  Be under no illusion, the businessmen and corporates are already poised to cash in on your tax dollars.  They have only one thing in mind – profit.

However, even worse than that is the fact that so much money is stolen or misappropriated.

Between the frauds and the lavish wages, lunches and perks given to certain staff, it’s bewildering how much education money fails to be used for education!

As one observer noted:

It might be an overstatement to say that some operators use charter schools as their own personal piggy banks, but then again a recent corruption scandal…  illustrates just how easy it is for money to flow from charter schools to private individuals.” Source

Indeed, and that flow seems all too often to be more of a flood.

Lessons from Abroad

Let’s focus on the issue of fraud and money mismanagement.

A recent report Charter School Vulnerabilities to Waste, Fraud, & Abuse found that over US$100Million is misappropriated in charter schools in the USA.

For example:

  • Nearly $3 million in unsubstantiated expenses amassed by the Weems Charter School.
  • The director of the now-closed New Hope Institute of Science and Technology charter school in Milwaukee, was convicted in federal court of embezzling $300,000 in public money and sentenced to two years in prison.  She spent about $200,000 on personal expenses, including cars, funeral arrangements and home improvement…

Things are so bad in the USA that the FBI are involved. Just take a look at just some of the cases FBI were involved in during the past year alone:

  • “The troubled Hartford charter school operator FUSE was dealt another blow Friday when FBI agents served it with subpoenas to a grand jury that is examining the group’s operations. When two Courant reporters arrived at FUSE offices on Asylum Hill on Friday morning, minutes after the FBI’s visit, they saw a woman feeding sheaves of documents into a shredder.”—The Hartford Courant, July 18, 2014

 

  • “The FBI has raided an Albuquerque school just months after the state started peering into the school’s finances. KRQE News 13 learned federal agents were there because of allegations that someone may have been taking money that was meant for the classroom at the Southwest Secondary Learning Center on Candelaria, near Morris in northwest Albuquerque … “—KRQE News 13, August 1 2014

 

  • “Wednesday evening’s FBI raid on a charter school in East Baton Rouge is the latest item in a list of scandals involving the organization that holds the charter for the Kenilworth Science and Technology School. … Pelican Educational Foundation runs the school and has ties to a family from Turkey. The school receives about $5,000,000 in local, state, and federal tax money. … the FBI raided the school six days after the agency renewed the Baton Rouge school’s charter through the year 2019.”—The Advocate, January 14, 2014

 

  • “The state of Pennsylvania is bringing in the FBI to look into accusations that a Pittsburgh charter school [Urban Pathways Charter School] misspent tens of thousands of taxpayer dollars on luxuries such as fine-dining and retreats at exclusive resorts and spas.”—CBS News November 12,  2013

 

  • “COLUMBUS, OH—A federal grand jury has indicted four people, alleging that they offered and accepted bribes and kickbacks as part of a public corruption conspiracy in their roles as managers and a consultant for Arise! Academy, a charter school in Dayton, Ohio.” —FBI Press Release, June 2014

 

And it’s not just the USA charter schools that have this problem.

In England, where charter schools are called ‘Academies’, there has also been a staggering number of cases of both poor management and fraud:

  • Just yesterday (31/08/14) another Academy head teacher was arrested on charges of fraud at Kings Science Academy in Bradford. Source
  • Mid August 2014 – Two former bosses at a Lincolnshire academy federation have been charged in connection with alleged fraud.
  • The head of an Academy chain run by Haberdashers’ Aske’s Federation Trust was ordered to repay £4.1m (~$8m NZ) taken fraudulently.  Not a penny had been repaid as of mid 2014.
  • Three Glendene Arts Academy staff arrested over the use of academy resources and payment of the salaries and expenses of staff used by a private company. Source
  • In May, “Auditors warned of a culture of “extravagance” at the heart of the E-ACT group – the second-largest provider of academies in England – that led to hundreds of thousands of pounds being wasted.” Source

What Next for New Zealand?

Overseas charter school chains already have their eye on Aotearoa.* Given the levels of fraud in overseas charters – of which the above list is but a drop in the ocean – how can we ensure our taxes are not squirreled off by the unscrupulous?

Ask yourself:

  • Are our charters set up in such as way as to protect against fraud?
  • What measures are there to protect NZ charter school funds against mismanagement?
  • Are the oversights stringent enough?

I’m sure those running charters honestly are as frustrated by fraud and mismanagement as those who don’t want charter schools at all. The trouble is, the system is set up in such a way that makes them a prime target for rogues of all stripes.

Which begs the question, when it comes to fraud, will New Zealand’s charter school system fare any better than overseas?

____________________________________________

Notes:

KIPP , for example, sent over a representative to meet Hekia Parata and tour New Zealand just as charter schools were being legislated for.

Sources:

http://inthesetimes.com/article/17109/the_con_artistry_of_charter_schools

http://www.washingtonpost.com/blogs/answer-sheet/wp/2014/05/06/new-report-cites-100-million-plus-in-waste-fraud-in-charter-school-industry/

http://blogs.edweek.org/edweek/charterschoice/2014/05/report_documents_100_million_in_charter_school_fraud_in_14_states_and_dc.html

http://www.dailymail.co.uk/news/article-2699331/Nigerian-accountants-4million-fraud-academies-Gove-hailed-Staff-member-said-spent-cash-extravagant-lifestyle.html

https://saveourschoolsnz.wordpress.com/2014/07/17/yet-more-charter-schools-under-investigation/

http://cashinginonkids.com/blogs/feds-charge-michigan-charter-school-manager-fraud/

http://www.converge.org.nz/watchdog/31/06.html

 

http://nzfirst.org.nz/news/charter-schools-model-gets-failed-mark

 

See also:  The Great City Academy Fraud, by Francis Beckett

 

 

 

The problem is that

About Save Our Schools NZ

"One needs to be slow to form convictions, but once formed they must be defended against the heaviest odds." Gandhi

Discussion

One thought on “Charter School Fraud and Mismanagement

  1. N.Z. parents and teachers would be well-advised to fight against charter schools. Ultimately, they devalue teaching, teachers, learning, students, and schools. Their goal is profits. Public schools in America are functioning on less and less money each year as they share the limited public tax dollar with charter schools whose success is FAR from stellar. It’s a parallel system of schools, and who can afford to fund two school systems through taxes? Not to mention that charters serve to return the country to the days of segregation, both by race and by income.

    Like

    Posted by camb888 | September 2, 2014, 2:17 am

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