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Showing posts with label CHARTER SCHOOL CRIME REPORT. Show all posts
Showing posts with label CHARTER SCHOOL CRIME REPORT. Show all posts

Friday, May 28, 2021

Eliminating Federal Charter Schools Program Would Curb Academic and Financial Abuses by Charter Operators | janresseger

Eliminating Federal Charter Schools Program Would Curb Academic and Financial Abuses by Charter Operators | janresseger
Eliminating Federal Charter Schools Program Would Curb Academic and Financial Abuses by Charter Operators



Charter schools are a form of private contracting, but across the 45 states which have authorized charter schools, the state laws that created these schools are different. Some states let school districts themselves authorize charter schools; other states override local authorization through state authority or permit other outside authorizers.  And the amount of and quality of oversight varies. The original goal was to stimulate innovation by reducing what charter proponents alleged was the bureaucratic regulatory straitjacket that, they claimed, constrains traditional public schools.

This blog will take Memorial Day off.  Look for a new post on Wednesday, June 2.

Charter schools originated in the early 1990s, and now, nearly three decades later as the charter school sector has matured, we discover what might have been predicted in an education sector paid for with public tax dollars but at the same time operated privately with little oversight. The Network for Public Education has set up a web page to track the hundreds of scandals reported year after year across the United States in local newspapers.

But there are also the stories of larger and more shocking scandals, often involving mismanagement by the chains of charter schools, some of them operated by charter management organizations (CMOs).  Here are four examples reported just this spring.  Three of the scandals are financial; one involves the violation of students’ rights in a CMO that made its reputation with zero-tolerance discipline.

Monday, May 3, 2021

Democracy Prep’s Fiscal Tottering | deutsch29: Mercedes Schneider's Blog

Democracy Prep’s Fiscal Tottering | deutsch29: Mercedes Schneider's Blog
Democracy Prep’s Fiscal Tottering



In March 2019 and October 2019, Democracy Prep charter chain founder and former employee Seth Andrew stole a total of $218K from three Democracy Prep escrow accounts. He was able to do so because two years after leaving Democracy Prep (in 2017), Andrew still had access to his school email account and could falsely portray himself as still associated with the charter chain. Andrew also still had access to the escrow accounts because he remained listed on documentation related to those accounts. Finally, given that Andrew was able to steal funds from the third escrow account five months after he depleted the first two accounts, it is obvious that Democracy Prep officials failed to adequately monitor all of the chain’s bank accounts.

In my May 01, 2021, post on the situation, I surmised that Andrew may have believed that Democracy Prep would not competently monitor its finances, thereby causing him to believe that he could get away with the theft. Indeed, the complaint against Andrew details the passage of 14 months from the first thefts (March 2019) to the maturing of a six-month certificate of deposit (CD) that Andrew purchased using the stolen funds (May 2020).

To lock that stolen money up for six months and patiently wait for it to mature demonstrates a level of certaintly that no one would be coming for that stolen cash.

Examination of Democracy Prep’s tax forms from 2007 to 2018 shows that the charter chain struggled to manage its money and to keep a positive balance CONTINUE READING: Democracy Prep’s Fiscal Tottering | deutsch29: Mercedes Schneider's Blog

Sunday, May 2, 2021

Charter schools exploit lucrative loophole that would be easy to close - The Conversation

Charter schools exploit lucrative loophole that would be easy to close
Charter schools exploit lucrative loophole that would be easy to close




While critics charge that charter schools are siphoning money away from public schools, a more fundamental issue frequently flies under the radar: the questionable business practices that allow people who own and run charter schools to make large profits.

Charter school supporters are reluctant to acknowledge, much less stop, these practices.

Given that charter schools are growing rapidly – from 1 million students in 2006 to more than 3.1 million students attending approximately 7,000 charter schools now – shining a light on these practices can’t come too soon. The first challenge, however, is simply understanding the complex space in which charters operate – somewhere between public and private.

Unregulated competition

Charters were founded on the theory that market forces and competition would benefit public education. But policy reports and local government studies increasingly reveal that the charter school industry is engaging in the type of business practices that have led to the downfall of other huge industries and companies.

Charter schools regularly sign contracts with little oversight, shuffle money between subsidiaries and cut corners that would never fly in the real world of business or traditional public schools – at least not if the business wanted to stay out of bankruptcy and school officials out of jail. The problem has gotten so bad that a nationwide assessment by the U.S. Department of Education warned in a 2016 audit report that the charter school operations pose a serious “risk of waste, fraud and abuse” and lack “accountability.”

Self-dealing

The biggest problem in charter school operations involves facility leases and land purchases. Like any other business, charters need to pay for space. But unlike other businesses, charters too often pay unreasonably high rates – rates that no one else in the community would pay.

One of the latest examples can be found in a January 2019 report from the Ohio auditor-general, which revealed that in 2016 a Cincinnati charter school paid $867,000 to lease its facilities. This was far more than the going rate for comparable facilities in the area. The year before, a Cleveland charter was paying half a million above market rate, according to the same report.

Why would a charter school do this? Most states require charter schools to be nonprofit. To make money, some of them have simply entered into contracts with separate for-profit companies that they also own. These companies do make money off students.

In other words, some “nonprofit” charter schools take public money and pay their owners with it. When this happens, it creates an enormous incentive to overpay for facilities and supplies and underpay for things like teachers and student services.

Millions of public dollars at stake CONTINUE READING: Charter schools exploit lucrative loophole that would be easy to close

Democracy Prep Enabled Its Founder to Rip It Off. | deutsch29: Mercedes Schneider's Blog

Democracy Prep Enabled Its Founder to Rip It Off. | deutsch29: Mercedes Schneider's Blog
Democracy Prep Enabled Its Founder to Rip It Off



On April 27, 2021, founder and former superintendent of Democracy Prep charter schools, Seth Andrew, was arrested for stealing $218K from school bank accounts. From the US Attorney’s Office press release (Southern District of New York):

Audrey Strauss, the United States Attorney for the Southern District of New York, and William F. Sweeney Jr., Assistant Director-in-Charge of the New York Field Office of the Federal Bureau of Investigation (“FBI”), announced today the unsealing of a complaint charging SETH ANDREW with wire fraud, money laundering, and making false statements to a financial institution, in connection with a scheme in which ANDREW stole $218,005 from a charter school network that he founded.  ANDREW was arrested this morning in New York, New York, and will be presented today before U.S. Magistrate Judge Gabriel W. Gorenstein.

Manhattan U.S. Attorney Audrey Strauss said:  “As alleged, Seth Andrew abused his position as a founder of a charter school network to steal from the very same schools he helped create.  Andrew is not only alleged to have stolen the schools’ money but also to have used the stolen funds to obtain a savings on a mortgage for a multimillion-dollar Manhattan apartment.  CONTINUE READING: 

Democracy Prep Enabled Its Founder to Rip It Off. | deutsch29: Mercedes Schneider's Blog

Wednesday, April 28, 2021

Seth Andrew, Founder of Democracy Prep Charter Chain, Arrested by Federal Officials | Diane Ravitch's blog

Seth Andrew, Founder of Democracy Prep Charter Chain, Arrested by Federal Officials | Diane Ravitch's blog
Seth Andrew, Founder of Democracy Prep Charter Chain, Arrested by Federal Officials



Federal officials arrested Seth Andrew, founder of the Democracy Prep charter chain, accusing him of taking money from the schools’ bank account to lower his mortgage rate on a new home. Andrew launched Democracy Prep in 2005; he left in 2013 to work the Obama Department of Education but retained financial ties with the charter chain. He severed his ties with the chain in January 2017.

Federal officials say he withdrew more than $200,000 from one of the schools’ accounts in 2019.

He is accused of wire fraud, money laundering, and making false claims to a bank.

CNBC reported:

Andrew, 42, was busted in New York City, where he and his wife, CBS News anchor Lana Zak, have a residence valued at more than $2 million. 

The founder of Democracy Prep Public Schools is accused of using more than half of the allegedly stolen money from that network to maintain a bank account CONTINUE READING: Seth Andrew, Founder of Democracy Prep Charter Chain, Arrested by Federal Officials | Diane Ravitch's blog