June 22nd, 2010 -- The chairwoman of the Assembly Education Committee is citing embezzlement charges against the operators of a Southern California charter school organization as evidence why her two charter school accountability bills should become law.
The bills are sponsored by Democrat Julia Brownley of Santa Monica. They are now in the Senate, which must decide whether new laws could prevent the type of alleged fraud by the husband-wife creators of Ivy Academia charters, and if not, whether additional financial oversight and restrictions on charters are needed anyway.
AB 572, which was waylaid by the Senate last year, would prohibit anyone with a financial interest in a charter from serving on its board of trustees. It also would require that charters follow state open meeting and records laws – a gray area in the law – and that board members file financial conflict of interest statements.
AB 1950, which the Assembly passed this month but can expect a rougher treatment in the Senate, would impose new auditing requirements for charters as well as stiffer academic criteria for renewing them. It also would ban for-profit charter operators, although that provision may have more symbolic than practical impact.
In the case that Brownley cited, Yevgeny Selivanov, 38, and Tatyana Berkovich, 32, face five felony counts of misappropriation of public funds and embezzlement totaling more than $200,000. The couple, who run four charter schools, are charged with shifting public money to a for-profit preschool located next to one of the charters.
On its face, the financial requirements of AB 1950 appear straightforward enough. Charters would have to hire an auditor from an approved list, as do other public entities, and there would be special rules for charters drawn up by an audit oversight group, in consultation with the California Charter Schools Assn.
But audits are expensive and time-consuming, especially for individual charter schools. The charter schools association is legitimately worried that a case of alleged fraud, which a standard audit might not detect anyway, could lead to excessive paperwork demands by the state and chartering districts.
Shell game by for-profit operators?
Selivanov and Berkovich didn’t run for-profit charters, and there are few such operators, such as EdisonLearning, operating in California. Charters should be run by non-profit boards and use money saved from efficiencies back into the operation, for longer school days, more teacher training, competitive salaries and professional development. That’s what many successful charters do.
Banning for-profit operations should ensure that state money goes to priorities set by a nonprofit board of directors – and not into the pockets of investors. Taxpayers have a right to that demand.
But a simple ban on for-profit charters won’t get to the heart of the more complex and potentially problematic financial arrangements in which for-profit corporations establish charters run by supposedly independent boards of directors. Publicly traded K12 Inc. has done this in establishing online schools, the California Virtual Academies. For-profit companies like K12 then become the sole-source providers of student content for the schools. Whether the non-profit boards are truly independent or have just a veneer of control will depend on how trustees are appointed, who serves on the boards and board members’ authority to demand quality services and control prices.
Transparency will be critical. AB 572, which will ban trustees with financial interests from serving on boards of directors, may help keep an arm’s-length relationship. But the Legislature and school districts that grant charters must scrutinize the financial relationships closely.
New grounds for not non-renewal of charters
AB 1950 would also set new academic criteria for granting and renewing charters that the California Charter Schools Assn., the chief lobby for charter schools, is opposing. The charter advocacy group EdVoice, also has called on its supporters to fight the bill.
Even charter advocates admit that bad charter schools are driving down the average test scores of all charters and giving the sector a bad name. But so far they’ve paid lip service to the issue. There’s been no agreement on how to weed out ineffective charters without ensnaring charter schools that are working hard with the most difficult to educate students.
Some of AB 1950’s proposed regulations would appear sensible; others, depending on how they’re enforced, could be troublesome.
- Schools seeking a charter would have to serve similar populations of students as the school district as a whole. The concern is that some charters don’t serve – or intentionally avoid – low-income and special education students. But oversubscribed charters must choose students by lottery. So the bill would have to work around that requirement, perhaps by awarding minority students higher odds in a lottery. Also, schools whose mission is to educate underserved minorities should be allowed to do so, regardless of a district’s overall demographics.
- Under current law, charters whose test scores at least match those of surrounding district schools are renewed for five years. That would be eliminated. Instead, schools that have been in school improvement for at least seven years – facing penalties for poor performance – would not have their charters renewed. Schools that are in school improvement for any length of time would have a charter renewal for no more than three years. And charter authorizers would have the discretion to grant a renewal for as little as one year.
If there were an objective and effective oversight system, this would make sense. But renewals are time-intensive for charter schools, and some districts antagonistic to charters could use a one or two year renewal to create instability and uncertainty among charter parents. Since nearly all public schools will soon be in school improvement status – unless federal No Child Left Behind law is changed – it doesn’t make sense to use discredited criteria to decide the fate of charter schools.
The California Charter Schools Assn. is suggesting a model that measures individual students’ academic growth, a more refined instrument. But the state’s data system can’t accommodate that yet. In the interim, charter defenders and Brownley should reach a compromise on new accountability rules.
Comments on Fight brewing over new controls on charter schools
Charter school fraud is nothing new or novel. Take a look at Islamic Imman Fetullah Gulen (Gulen Movement) manages 97 Charter Schools throughout the USA. In California, the Magnolia Science Academys (los angeles) and Bay Area Technology (2 in Northern California) are manged by the numerous Gulen foundations: Willow Educations, MERF, Accord Institute, Pacifica Instiute. that is just the foundations on the west coast. Dr. Suleyman Bahceci is the "superintendent" but is ALSO on on the boards of several of these money machines. You can check out 990 IRS returns for free at http://www.guidestar.com Gulen schools are using our money to immigrate teachers from Turkey under HB-1 Visas, Texas's Harmony Science through their Cosmos Foundation has over 1,100 HB-Visas since 2001 alone. Then there is the teaching of Turkish language, dance and songs. They perform these at the Turkish Olympaid in the USA and they get a trip to Turkey to perform with other worldwide Gulen Schools for the politicians of Turkey. WHY are we paying for this again????
- Lisa Martell
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