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Misspending by charters puts Ohio on the defensive

Sunday, December 20, 2015

Ohio’s problem-plagued and failing charter school system continues to prove its critics right and its defenders wrong.

Indeed, even those advocates who have long argued that charter schools are a necessary alternative to failing public schools are beginning to wonder just how much longer this failed experiment in Ohio can be sustained.

Now, the latest manifestation of the systemic problems plaguing the charters may prove to be costly to the state.

According to the Columbus Dispatch, dozens of charters have failed to repay more than $6 million in misspent tax dollars. The improper spending involved about 40 of the privately operated but publicly funded schools and was uncovered by state audits conducted between 2008 and 2014.

This revelation could not have come at a worse time for the state.

Last month, the Obama administration placed a hold on a $71 million grant to the Ohio Department of Education for the schools after politicians of both parties – yes, Democrats and Republicans – questioned the department’s ability to responsibly oversee expenditure of the federal money.

According to the Dispatch, which has reported extensively on the troubled industry, federal regulators were concerned about the ODE’s rigging of charter-school evaluations and wanted assurances that the grant money would be spent properly.

Three months ago, the newspaper revealed that Ohio’s grant application had inaccuracies and questionable claims. The most significant was the state’s contention that there were no “poor performing” charters in the 2012-13 school year, even though about a third failed to meet a single standard on state report cards that year.

Ohio spends about $1 billion a year to educate more than 120,000 students attending abut 350 charter schools.

Superintendent’s report

Federal officials visited Columbus to discuss the grant award and their concerns. In response, Ohio’s superintendent of public instruction, Richard Ross, submitted a report to the federal government that he hopes will persuade the Obama administration to release the $71 million.

The report contains details of the state audits that revealed misspending by the charters.

“A majority of the unresolved findings for recovery are against individuals who operated or worked at the schools, and many of these schools are now closed,” Ross told the Dispatch.

The paper noted that the biggest offender is former school Treasurer Carl W. Shye Jr. of New Albany, who misspent a reported $2.1 million while handling finances for more than a dozen charter schools in Columbus, Dayton and Youngstown, according to state Auditor David Yost.

The report submitted to the Obama administration noted that the auditor’s office conducted 2,315 audits of charter schools between 2008 and 2014, and 347 of them had findings for recovery.

Most have been resolved or repaid, Ross contended.

The Dispatch reported that much of the illegal spending involved undocumented or overpayments to school management companies, vendors and employees.

Ross, who will be retiring at the end of the month, wrote a letter to Stefan Huh, federal charter-school director, designed to persuade Washington that Ohio has turned over a new leaf with regard to the charter-school industry.

“Recent legislation passed by the Ohio General Assembly and supported by the governor improves oversight of charter schools, including important new provisions that strengthen the ability of the state auditor to oversee activities of these schools,” Ross wrote.

But before the Obama administration releases the $71 million, the largest single award, officials should answer this overarching question: Why aren’t the publicly funded but privately operated charters governed by the same statutory rules, regulations and oversight that apply to public schools?

While we have applauded the Republican-controlled General Assembly and Republican Gov. John Kasich for finally taking some steps – albeit small ones – to bring the charters under control, we also have expressed our misgivings about the charter operators falling in line. After all, they have long been protected by Republican officeholders.