Magnolia Charter troubles in LAUSD highlight larger concerns
Troubles encountered by the charter school operator, Magnolia Public Schools (MPS),at two of its eight charters in the LA Unified School District highlight a murky governance issue that legislatures in California and elsewhere have been slow to address.Should a parent company operate its charter school network as a single entity, as MPS does with its 11 California charters? Or should each school be run independently, with separate budgets and governance?
LA Unified last month closed two MPS schools, saying financial problems at the parent company rose to the “level of fiscal mismanagement.” But by scrutinizing the financial health of the overall charter management organization, the district has tread into uncharted territory for an authorizer.
“This is an emerging issue, and my guess is a lot of legislatures will have to address this in the near future,” says Kathy Christie of the Education Commission of the States, which compiles research on charter school practices nationally.
The school closures followed a District audit that not only examined Magnolia Science Academy 6 and Academy 7, both high-performing schools, but also MPS as the parent group. The audit found among other things that MPS met the IRS definition of being “insolvent” as of June 2013, that it owed millions of dollars to the schools it oversees and that it transferred money between schools. It also found that it paid millions of dollars to a third party non-profit, Accord, for educational services withMagnolia Charter troubles in LAUSD highlight larger concerns:
