Audit shows issues with charter school management and transparency

By Andrew Powell | The Center Square contributor
Audit shows issues with charter school management and transparency

(The Center Square) — A recent Florida audit of the state’s charter school administration still shows a lack of oversight and business dealings that could be seen as conflicts of interest.

The Florida Auditor General recently released a follow-up report into the day-to-day management and transparency of charter schools in the Sunshine State and there were several issues that still needed to be addressed.

According to Florida law, charter schools are required to be organized and/or operated by a nonprofit organization or a public entity and as such are able to access a range of Federal education programs.

Federal law states that Charter School Program grant funding can only be awarded to nonprofit organizations, both public and private. Federal law further states that there should be strong fiscal monitoring and oversight of public charter schools to ensure federal funds are used appropriately.

State law also requires for-profit and nonprofit management organizations to use transparency in the day-to-day operations of charter schools, including having all information about the management organization and its members, available to the public via the school’s website.

Charter School Appeals Board members are also banned from participating in transactions that might result in a conflict of interest. This includes the purchase, rental or leasing of property, or the purchase of goods and services from any business or entity that the board members may hold a material interest in.

Furthermore, board members are strictly forbidden from holding a contractual or employment relationship with any business or entity that has a business partnership with the charter school. Board members are also forbidden from voting on any matter that would result in a gain or loss to them personally.

The Auditor General found that while there are oversight and transparency requirements in the statutes, multiple charter schools had not followed the proper processes.

The Department of State, Division of Corporations said in the report that, “1 charter school had been incorporated as a nonprofit organization by an agent of the for-profit MO it had contracted with to operate the school.”

The report also states that another two charter schools failed to disclose the management organizations associated with their schools on their websites and also found that 12 other charter schools had used for-profit management organizations or companies related to them, in leasing their premises.

Another 10 charter schools had “material related-party transactions between the schools and the for-profit MOs were disclosed in the schools’ financial statements, in addition to the lease arrangements previously noted.” According to the report.

The report also found that $126 million in bonds had been issued by public entities on behalf of three charter schools who had used for-profit management organizations to run their operations.

To address these issues, the Auditor General suggests that more oversight is needed to ensure no conflict of interest is taking place.

“Consistent with Federal guidance, we recommend that Department management work in concert with charter school sponsors and, as necessary, the Legislature, to enhance the oversight of potential charter school conflict of interest, related party, and separation of duty issues, and encourage transparency in the use of for-profit and nonprofit MOs by charter schools.” The report states in its recommendations.

Other issues included in the report all relate to better transparency for charter school board members and associates, and the report further recommends that all Department controls be enhanced and members recuse themselves when there may be a conflict of interest.

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