Corporatism, Education — October 22, 2015 at 12:38 pm

Charter school scam: 25 Michigan charter schools received $1.7 million in tax dollars but never actually opened


This week, the Center for Media and Democracy (CMD) released a scathing report on charter schools in 12 states which have received federal funding. The report, titled Charter School Black Hole shows that Michigan charter schools received $34,997,658 between 2010-2015 under the federal Charter School Program (CSP). 139 of the 297 charters (as of 2014, the number is up to 302 now) in Michigan were subsidized in part by federal tax dollars in the past five years, about half.

What CMD found is shocking:

Since the inception of charters in the state, more than 100 charters have closed (108). Many of them have closed due to lack of “academic viability” (poor results) while other have closed due to lack of “financial viability” (such as inadequate enrollment) and some for both or other failings. The total amount these schools have received is not known, but they certainly consumed well over $1 million in federal CSP grants before shuttering.

That’s bad, but it gets worse:

Perhaps one of the most surprising takeaways from the federal information available about how taxpayer money is being spent or wasted is the existence of “ghost” schools that never opened. Out of the charters that were approved for CSP funds by the Michigan Department of Education in 2011 and 2012, twenty-five never opened. CMD learned this through its FOIA.

The organizations behind these proposed charter schools were approved for a total of nearly $3.7 million in federal tax funds in “pre-planning” and “planning” grants, and they were received nearly $1.7 million, according to state expenditure reports CMD reviewed.

CMD also obtained a corrective action plan that shows that the U.S. Department of Education was made aware of the problem of schools not opening after WestEd flagged it in a monitoring report. WestEd is a private company that works for the federal agency to audit how states administer federal grants and comply with federal regulations.

Michigan was asked to “consider stronger measures to determine sub-grantee quality to ensure that planning sub-grant recipients will be of sufficiently high quality to be authorized to open following the grant period.” In a follow-up phone call, officials with the Michigan Department of Education assured federal regulators that they had amended the application. “Only those who have been told they are receiving a charter … would be eligible.”

This assurance was enough to satisfy federal overseers in the pro-charter agency. The corrective action materials indicate that because “this is only a recommendation, there will not be any additional follow-up,” which underscores the toothless-ness of the federal approach.

So Michigan charter schools, 80% of which are run by for-profit corporations, have received millions upon millions of tax dollars with little to no accountability and $1,726,693 went to schools that never even opened. That money is gone with no accountability. Sarah Burris at calls it what it is: an “education racket”:

What’s the story about these schools? Why did they close? Why couldn’t they make it work? Where did the money go? There aren’t a lot of answers. Some have closed due to allegations of fraud. There are even cases of people who started charter schools, got funding, closed the school down either before it opened or just after it opened and then turned around and started up another charter school. It’s literally an education racket.

It’s worth noting that the Snyder administration made it very difficult to do this analysis. In their report, CMD notes that, “Michigan provided the least information to CMD of any of the 12 states/jurisdictions within our investigation.” When CMD requested information about communications with outside groups seeking to influence the charter school process, they were rebuffed by Michigan officials.

And then there’s this:

Michigan refused to provide a list but said a person could instead search an online database by entering the name of each school. However, that database does not include information about how much federal CSP money each charter received, and doesn’t include charters that never opened.

Last year’s Detroit Free Press exposé of the Michigan charter school system showed how our state spends $1 billion each year funding charter schools with an astonishing lack of oversight, transparency, and accountability. CMD’s important report shows that it’s even worse than we thought. (As an aside, I find it pretty shocking that, after their exposé, the Free Press has ignored CMD’s report.)

If this sort of thing was going on in our public schools, every conservative, corporatist, and Republican in the state (along with everyone else, for that matter) would be carrying torches and pitchforks demanding reform and accountability. But, when there is money being made – funded almost exclusively with our tax dollars – in the operation of charter schools, it’s silence punctuated by the sound of chirping crickets.

The hypocrisy is disgusting.

UPDATE: This post has been updated HERE with the revelation that Michigan’s State Reform Officer, Natasha Baker, was the recipient of a $110,000 grant for a “ghost school” she never opened.