New reports criticize Arizona’s charter schools

Parents have more choice, but there’s friction over finances

Arizona Agribusiness & Equine Center which is one of the highest rated of the charter schools in Arizona. One of the school’s horses which allow the students to learn hands on as well as in the classroom. (Matthew Van Doren/Courier)

Arizona Agribusiness & Equine Center which is one of the highest rated of the charter schools in Arizona. One of the school’s horses which allow the students to learn hands on as well as in the classroom. (Matthew Van Doren/Courier)

Editor’s Note: This is a three-story package that reviews the history of charter schools in this state and region, and offers district and charter leaders views on how this is impacting education in our areas. The Grand Canyon Institute and American Civil Liberties Union-Arizona have recently released reports that suggest reform is necessary to assure that charters and districts are held to similar financial and admission criteria.

From the start of Arizona’s school choice movement in 1994, district school leaders have bristled over what they see as a lack of transparency over how charter school operators spend money, how they select students and over payment of teachers and administrators.

At a time when some parents were disgruntled with district schools and had no options beyond homeschooling or private schools many could not afford, charter schools were deemed to be a public school alternative. They were touted to be smaller schools, often with a specialty artistic focus or oriented toward those who were not succeeding in the traditional school setting. Charters were designed to be more flexible, innovative and free of regulation, state educators said. Students would be required to pay no admission; the state would pay charters a per pupil expense similar to that of districts.

In the beginning, most district leaders dismissed charters as a fad; they did not see them as competitors, said Tim Carter, a 43-year educator who is the state Board of Education president and the Yavapai County Schools Superintendent. The Yavapai County Education Service Agency oversees 26 districts and 24 charter schools.

“But it’s not a fad; they are here to stay,” Carter said.

From Carter’s vantage point, the advent of charter schools prompted some positive competition with certain underperforming district schools, including more public transparency about school operations and academic outcomes. In addition, some districts responded to charters by adding, or expanding, academic and extracurricular programs so as to enhance all children’s education.

Yet he admits they, too, created something of an “unlevel playing field.” District schools are required to comply with certain state and federal laws that charters do not have to follow, particularly when it comes to spending their dollars.

Charter leaders and advocates argue districts can ask their communities for bonds and overrides, with district leaders countering that only happens if taxpayers opt to invest extra dollars in education. And there is no guarantee they will, according to public education advocates. District school leaders argue their pupil funds are restricted, whereas, charters get money in a lump sum to spend any way they wish, they said.

In September, the Grand Canyon Institute released a portion of a detailed analysis related to charter school finances.

Though that report does not cite violations of law in its review, the research suggests a concern for malfeasance because charters are allowed to handle public dollars in ways that are not traceable to the taxpayers. Unlike district schools, the Institute states charter schools are not required to participate in competitive bidding for equipment and services, leaving open room for questionable financial deals and spending of tax dollars.

Another concern is that charter schools can set their own salary schedules for teachers and administrators, with administrators often earning more than district leaders and teachers getting paid less than their district colleagues. And records on those salaries can be hard to find, analysts suggested. Again, the Institute’s report suggests reform efforts that better align how salary expenses for charters and district schools are determined, particularly in a state where teacher and staff retention related to salaries is viewed as a crisis.

Arizona teacher salaries are listed at the bottom of all 50 states.

Even with financial audits and budget reports — charter schools are required to undergone annual financial audits and other financial reporting that includes IRS filings — the Institute was clear there needs to be a more consistent, standard way that charters report financial data so it is easy to obtain, comprehend and monitor. Oversight of the state’s almost 500 charter schools rests with the Arizona State Board for Charter Schools.

Board leaders were clear they take that responsibility very seriously, and offer vigilant oversight.

“Any suggestion that the Charter Board has not upheld the law is erroneous and intellectually dishonest,” declared board President Kathy Senseman. “The board has held Arizona’s more than 500 charter schools accountable for years now. Additionally, the board has made reforms for the complaint process over the past year, issued guidance documents clearly outlining the law for charter operators, and worked with multiple agencies to investigate allegations of wrongdoing.”

The Institute report identifies no illegal practices and ignores the updated legislation that mandates more transparency related to charter school finances.

“We’ve met with this group several times and we continue to try to maintain open lines of communication,” Senseman said. “However, they have yet to offer any constructive solutions to their perceived issues.”

Dave Wells, the research director for the Grand Canyon Institute, acknowledges the board has made adjustments and improvements with the financial reporting procedures. The challenge it faces is one of manpower, he said.

To properly monitor all the reports, and to stay abreast of all the various charter school operations, requires additional staff and such a request should be made to the state Legislature, Wells said.

The board’s Executive Director Ashley Berg dismissed that perception.

“The board, at this time, has a sufficient amount of staff to meet the board’s statutory responsibilities and, in fact, is viewed as a national leader for its success as an independent charter authorizing board,” Berg said.

The Institute will be releasing yet another report in the coming month that offers further observations and suggestions for ways to better monitor charter school performance, Wells said.

“We’re not opposed to charters,” Wells said. “We’re just proponents of similar financial accountability for all schools. We’re not saying that they are doing anything illegal. But we think they’ve been given too much latitude on how they take public taxpayer dollars and spend it.”

Editor's Note - this story has been updated to identify Dave Wells as the research director for the Grand Canyon Institute.