March 27, 2019 2:11 pm

NPE uncovers how U.S. DOE wastes hundreds of millions on defunct charter schools

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A blistering new report from the Network for Public Education documents how the federal government, through the U.S. Department of Education, wastes hundreds of millions of taxpayer dollars on grants awarded to charter schools that never open or quickly close. The Department of Education is also funding charter schools that blatantly discriminate in their discipline, curricular, and enrollment practices. Yesterday members of Congress cited our report when they grilled Betsy DeVos.

You can read about our report here in the Washington Post.

Now do your part.

Tell Congress: Stop funding the broken U.S. DOE Charter Schools Program.

Asleep at the Wheel: How the Federal Charter Schools Program Recklessly Takes Taxpayers and Students for a Ride, estimates that the federal Charter Schools Program, over its history, has awarded over $4 billion in seed money to charter schools.  In California alone, the state with the most charter schools, the failure rate for federally grant-awarded charters is 39%.

Click the image below to read the full report.

Here is a quick summary of what we found.

Hundreds of millions of federal taxpayer dollars have been awarded to charter schools that never opened or opened and then shut down. In some cases, schools have received federal funding even before securing their charter.

  • Our investigations barely skimmed the surface of the thousands of charter school grant recipients that never opened or opened but then closed. Of the schools awarded grants directly from the department between 2009 and 2016, nearly one in four either never opened or shut its doors. The CSP’s own analysis from 2006-2014 of its direct and state pass-through funded programs found that nearly one out of three awardees were not currently in operation by the end of 2015.

The CSP’s grant approval process appears to be based on the application alone, with no attempt to verify the information presented. Schools have been approved for grants despite serious concerns noted by reviewers.

  • The CSP’s review process to award grants does not allow the verification of applicants’ claims, thus leading to what award-winning, New York Times journalist Mike Winerip referred to as an “invitation for fiction writing.” This process resulted in numerous examples of awardees that claim they seek to enroll high percentages of minority and disadvantaged students, even while their programs and policies are designed to draw from advantaged populations. Finally, we found instances where achievement and/or demographic data on applications were cherry-picked or massaged, with reviewers instructed to accept what was written as fact.

Grants have been awarded to charter schools that establish barriers to enrollment, discouraging or denying access to certain students.

  • Multiple schools we examined enroll smaller percentages of students with disabilities and students who are English language learners than the surrounding schools. Some appear to be designed to encourage “white flight” from public schools. Thirty-four California charter schools that received CSP grants appear on the ACLU of Southern California’s list of charters that discriminate—in some cases illegally—in admissions, and 20 CSP funded Arizona charters appear on a similar list created by the Arizona ACLU. One Pennsylvania charter receiving multiple grants totaling over one million dollars from CSP states on its website that its programs as limited to students “with mild disabilities.”

Recommendations by the Office of the Inspector General have been largely ignored or not sufficiently addressed.

  • We reviewed numerous OIG audits that found significant concerns over how CSP money is spent and that described the lack of monitoring the Department carries out to ensure those funds contribute to the intended goals of the grants. Each audit includes specific recommendations. But not only is there little evidence the department has adopted any of these recommendations; the current Secretary has denied responsibility for oversight, believing that it falls outside the federal government’s purview—even though this is a federal grants program.

The department does not conduct sufficient oversight of grants to State Entities or State Education Agencies, despite repeated indications that the states are failing to monitor outcomes or offer full transparency on their subgrants.    

  • Although the vast majority of public charter school grants are awarded to state education agencies (SEAs), our report reveals that the Department has shown no oversight when SEAs pass funding along to individual charters or charter organizations as subgrants. We found a continuing record of subgrantee schools that never opened or closed quickly, schools that blatantly discriminate in their discipline, curricular, and enrollment practices, and schools that engage in outright fraud as well as in related-party transactions.

The CSP’s grants to charter management organizations are beset with problems including conflicts of interest and profiteering.

  • The Office of the Inspector General’s 2016 audit of CSP funded CMO’s and their related schools found that of the 33 schools they reviewed, 22 had one or more of the following: conflicts of interest between the CMO or the charter, related-party transactions and insufficient segregation of duties.  We found troubling examples of CMOs that received massive grants that engaged in practices that push-out low-performing students, violate the rights of their students with disabilities and cull their student bodies through policies, programs and requests for parental donations.

Under the current administration, while Congressional funding for the CSP rises, the quality of the applications and awardees has further declined.

  • Based on our review of grant awards to SEAs and non-SEAs in 2017 and 2018, we provide evidence that the quality of the applications and the receiving grantees are likely getting worse, which may result in increased fraud, mismanagement and charter failure.

Send your letter to Congress today and say, “No more!”

Then share the report:

And this action:

At a time when Betsy DeVos and Donald Trump propose slashing funding for public education, it is outrageous that this wasteful giveaway to schools that may not ever exist is increased to half a billion dollars a year.

Let’s tell Congress to stop the scam today.