The Massachusetts Board of Elementary and Secondary Education
Comments on the Inspector General's Report on Charter Schools
January 25, 2000
The Inspector General's report on charter schools makes several useful observations: most management contracts lack meaningful performance objectives or measures; there is a lack of uniformity in financial reporting; and there is a lack of sufficient oversight and guidance from ESE regarding internal financial control systems
Several of the report's observations, however, reflect a misunderstanding of how charter schools are formed and operated. The IG's office faults charter schools for not being more explicit in their charter applications regarding their school buildings. As anyone knows who has paid any attention to the development of charter schools, locating and financing a facility is extremely difficult. It is especially difficult when a school exists only on paper, without even the approval of the state. Any suggestion that charters should not be granted until facilities are secured lacks any grounding in reality.
The IG's office does not understand that relationships between charter schools and their affiliated organizations and management contractors are and should be partnerships, which should not be compared to arms-length procurement relationships between unrelated buyers and sellers. For example, the IG's report criticizes charter schools for having overlapping boards with related non-profit organizations. Many charter schools are created by non-profits. Indeed, these charters were granted in part because of the credibility of these pre-existing community institutions. The fact that there are overlapping boards is not a weakness, but a strength.
The IG's report also criticizes charter schools for securing loans from management companies. Charter schools lack access to capital that other public schools enjoy. One of the advantages of working with a management contractor is the access to financing they can provide, both directly and indirectly. Inevitably, these loans are make with concessional rates and terms. Without such financing, these schools may not exist at all. Nevertheless, they in no way impair a school's rights to terminate a management contract.
Several of the report's observations reflect a process-oriented, bureaucratic perspective, rather than one that is focused on results-which is the spirit of the charter school initiative. Rather than focus exclusively on documented procedures for procurement and construction, the IG's office should have made some effort to look at actual costs and efficiency. By way of example, most charter schools have undertaken significant building renovations or construction. My observation is that these projects have cost substantially less on a square foot or per pupil basis than similar projects conducted by school districts. A recent Pioneer Institute study shows that Massachusetts public construction laws and procedures virtually double the cost of building projects. Is this what we want to impose on charter schools?
In short, while the IG's report does provide some useful insights, on the whole its criticisms are wide of the mark.