We must hold charter schools accountable

There’s long been debate over the funding formula for Pennsylvania’s charter schools, but a recent report from the state auditor general points out an equally troubling issue — a lack of accountability on how public education funds are spent.

The state Legislature should review the charter school law and address the serious shortcomings in tracking where the money goes.

Auditor General Eugene DePasquale recently reviewed the tax filings of Lincoln Learning Solutions, which manages two Midland-based schools — the Pennsylvania Cyber Charter School, one of the largest cyber schools in the state, and Lincoln Park Performing Arts Charter School. The charter management company listed a staggering fund balance of nearly $82 million in the 2018-18 fiscal year, which was tens of millions of dollars more than the reserve funds of other charter management companies similarly reviewed.

Although LLS, a registered nonprofit organization, is almost entirely funded by public sources, Mr. DePasquale said it is nearly impossible to track how the management company spends the tax dollars allocated to the charter schools and then passed on to LLS in management and other fees.

“Pennsylvania’s charter school law prevents both the state’s auditor general and Department of Education from performing full reviews of charter management companies,” Mr. DePasquale said.

The auditor general referred to the state’s charter school law as “the worst in the nation” and said the Legislature needs to make changes to make sure “education funding is not being diverted to benefit private companies.”

There is good reason to question the accountability of management firms that rely almost exclusively on funding from public education. In reviewing LLS’ Form 990 tax filings, which are public record, Mr. DePasquale found the unusually high account balance for LLS, as well as substantial pay raises given to company executives over a four-year period. The board president and CEO received a 50% increase, and the chief financial officer received an increase of 148%.

And more than $600,000 was spent on lobbying the Pennsylvania Legislature and other state legislatures. Reviews of other charter management companies during the same period showed none spent any money on lobbying.

Charter schools — whether they are cyber schools or brick-and-mortar schools — play an important role in the public education system. But they are funded by taxpayers and how those tax dollars are spent — by the school or the management companies they contract with — must be open to public review and inspection.

The Legislature needs to revise the charter school law to hold management companies accountable.