When Charter Schools Are Nonprofit in Name Only

[marmar]

from ProPublica:

This post has been updated to include a response from National Heritage Academies.

A couple of years ago, auditors looked at the books of a charter school in Buffalo, New York, and were taken aback by what they found. Like all charter schools, Buffalo United Charter School is funded with taxpayer dollars. The school is also a nonprofit. But as the New York State auditors wrote, Buffalo United was sending " virtually all of the School's revenues" directly to a for-profit company hired to handle its day-to-day operations.

Charter schools often hire companies to handle their accounting and management functions. Sometimes the companies even take the lead in hiring teachers, finding a school building, and handling school finances.

In the case of Buffalo United, the auditors found that the school board had little idea about exactly how the company – a large management firm called National Heritage Academies – was spending the school's money. The school's board still had to approve overall budgets, but it appeared to accept the company's numbers with few questions. The signoff was "essentially meaningless," the auditors wrote.

In the charter-school sector, this arrangement is known as a "sweeps" contract because nearly all of a school's public dollars – anywhere from 95 to 100 percent – is "swept" into a charter-management company.

The contracts are an example of how the charter schools sometimes cede control of public dollars to private companies that have no legal obligation to act in the best interests of the schools or taxpayers. When the agreement is with a for-profit firm like National Heritage Academies, it's also a chance for such firms to turn taxpayer money into tidy profits. .................(more)

The complete piece is at: http://www.propublica.org/article/when-charter-schools-are-nonprofit-in-name-only

[riversedge]

1. When will folks get it--that these voucher schools are a taxpayer rip off??...

WI legislators will be expanding charter-voucher schools next year....AGAIN.

[belzabubba333]

2. it's just republican plot to take education private

[Smarmie Doofus]

5. Many DEMs involved in the charter industry.

Including the governor of my state. ( est. 1M in campaign contributions from charter -linked sources.) He says the pubic school system is a "monopoly."

No shit. Quid Pro Cuomo as trustbuster. Can you picture it?

[madfloridian]

8. Charter schools are major Democratic policy.

Both Obama and Arne Duncan want more of them, they call them turnarounds after a school fails the almighty tests.

[sendero]

3. The term non-profit or not-for-profit is all but meaningless..

.... it simply means there are no shareholders to serve. But there are administrators, CEOs, CFOs, accountants, brothers, sisters, uncles, companies providing "services" owned by brothers, sisters and uncles and on and on and on. There are as many ways for a "non-profit" company to provide an exorbitant profit to a select cadre of insiders as there are trees in the forest.

The idea that a non-profit company is automatically more well run or fiscally careful is bunk, in fact without shareholders watching what is to stop it from paying the CEO 5 times the going rate? Nothing is, and so that happens a lot.

[Smarmie Doofus]

6. There ya' go. ^^^^

[Starry Messenger]

4. Who could have predicted this?

[xchrom]

7. du rec.