Charter schools got millions from federal COVID bailout
Two Chester charter schools were among thousands of businesses and organizations in the region receiving Paycheck Protection Program funds, bringing into question their status as “public schools” that receive taxpayer money to educate students.
“The fact of the matter is that charters are ‘organizations’ and charters are public schools,” said Chester Community Charter School spokesman Max Tribble. “They are by definition and according to law, public schools. They are by organization, non-profit organizations. CCCS, for instance, is a registered 501(c)3 nonprofit organization and a public charter school under the Pennsylvania Charter School Law and authorized by the Chester Upland School District.”
But Tribble noted charters are not “districts” under the law and therefore cannot levy taxes in times of crisis, requiring them to seek funding wherever they can – including outside sources.
According to information released this week by the U.S. Treasury, Archway Charter School Of Chester Inc. – the nonprofit entity doing business as Chester Community Charter School – received between
$5-10 million in PPP funds, for which it indicated it had saved 479 jobs.
Chester Charter Scholars Academy also received
$1-2 million, according to that data, which it said resulted in 85 jobs saved. Both schools operate in the Chester Upland School District.
While charter schools must be non-profit by law, they can be managed by for-profit companies. In the case of CCCS, the management company is Charter School Management Inc., a private company founded by attorney Vahan Gureghian, which does not have to reveal its finances.
Tax records for Archway in 2017, the latest available public filing, indicate the non-profit received approximately $66 million in “grants” and spent $41.6 million on education services. It also paid $18 million under a line item for “management” that year.
Both schools also received funding under the Coronavirus Aid, Relief, and Economic Security Act, according to records from the Pennsylvania Department of Education. The CARES Act carved out $30.7 billion for an Education Stabilization Fund, including
$13.2 billion for elementary and secondary schools.
Chester Community Charter received more than $2.5 million in CARES funds while the Scholars Academy received more than $307,000, according to PDE figures. The Chester Upland School District received almost $2.4 million.
Lisa Wilson, director of operations for the Scholars Academy, did not return a call for comment Wednesday, but Tribble said CCCS moved to secure PPP funds due to uncertainty with the district’s ability to pay its charter obligations.
Tribble wrote in an email that the district missed making its first payment on time after schools shut down due to COVID-19 and only paid after the threat of litigation, validating the charter’s fear that it would lose funding as the pandemic wore on.
He did not disclose the exact amount CCCS received, but did say that hundreds of jobs held by Chester residents were not lost due to that funding. The charter was able to maintain its entire staff to offer distance learning during the shutdown and provide daily meals to all students who needed them, Tribble said. CCCS additionally provided nearly 4,000 free computers to students to finish the school year, participate in summer programs and prepare for the fall, according to Tribble.
CCCS, the largest brickand-mortar charter school in the state with more than
4,300 students, has also signaled its intent to expand in the district following a court order in May that directed CUSD Receiver Juan Baughn to consider outsourcing management of all grade levels as part of a financial recovery plan.
Congress designated PPP funds earlier this year to help businesses and organizations retain employees, pay rent and cover other expenses as closures associated with COVID-19 drove revenues through the floor.
Treasury has so far only released the names of organizations receiving more than $150,000, which account for about 14% of all recipients. The information released also does not indicate exact amounts received, but instead breaks out five tiers of funding for those receiving $150,000 to $350,000, $350,000 to
$1 million, $1 million to $2 million, $2 million to $5 million, and, at the highest bracket, $5 million to $10 million.
The program initially authorized up to $349 billion in forgivable loans if businesses retained or rehired employees and covered eight weeks ending June 14, but was extended in May 2020 with an additional $320 billion. There is still about $130 billion on hand for the program to disburse and Congress recently extended the application deadline to Aug. 8.