Carl Petersen reports from Los Angeles that the Charter School Division has forgiven over seven million dollars of charter school debt. Too bad for the students of LAUSD.
When the LAUSD Charter School Division last provided an update on the amount owed by charter schools for over-allocation fees on January 17, 2022, the past due balance stood at $13,745,310. While these summaries were supposed to be provided “approximately every month,” no further updates were provided until a new summary was released just as the district closed down for Spring Break. This new update shows why Jose Cole-Gutiérrez has been silent for the past three months.
The one bit of good news in the report is that charter schools paid $665,696 of the money owed to the district’s students. Approximately 90% of this will be distributed directly to the schools that were affected by the charter schools taking more space than they were entitled to under PROP-39. While this cannot change the fact that students had their educational experience improperly interrupted, at least the schools can use this money to improve the educational experience for future students.
While this payment should bring the balance due down to $13,079,614, the report shows that the balance owed by charter schools is now only $5,174,029. Comparing the April report to the one released in January shows that $7,678,022 has mysteriously disappeared from the assessed fees. No reason is given for the reduction.
Of the 60 charter schools that have been assessed over-allocation fees since the 2015–16 school year, 37 had their balances reduced, with the reduction averaging 59.91%. New Horizons Charter Academy received the largest giveaway with their $1,344,285 bill reduced 80.53% to $261,785.
There are only two possible reasons for these reductions. The first is that Jose Cole-Gutierrez’s department was incompetent when they assessed the fees and has been carrying an inflated balance for several years. This would have been aided and abetted by Megan K. Reilly, who was placed in charge of collecting this debt by former Superintendent Austin Beutner. It is hard to believe that the District’s former CFO, Reilly, did not check the accuracy of the numbers as soon as she was assigned the task.
If the original bills were accurate, then the only other explanation is that the charter schools were given a huge present. According to the language on the over-allocation letters, the fees assessed are mandated by the state, so it is unclear what authority the Charter School Division or even the LAUSD board had to reduce these charges.
Twelve of the charter schools that received the reductions have paid the reduced bill in full. Another 20 entered into payment plans with the LAUSD and will pay in multiple installments. The remaining five had their balances reduced but still have not paid or made arrangements to pay. This includes the WISH Academy High School whose parent organization has been promised the full campus that is currently being used by the Orville Wright STEAM Magnet.
The district cannot wait any longer to immediately collect this debt, much of it which is years past due.
