CT News Junkie | OP-ED | Show Me The (Charter Management Fee) Money!

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OP-ED | Show Me The (Charter Management Fee) Money!

by | May 20, 2015 6:59am
() Comments | Commenting has expired
Posted to: Analysis, Business, Education, Opinion, State Budget, Transparency, Bridgeport, Hartford, New Haven

When traditional schools pay their bills to educate kids, they usually don’t have much money, if any, remaining. When charter schools pay their bills, they often have money left over to spend. How much? It depends on the school. For a number of charter schools, roughly 10 percent of all of public dollars meant for educating children in these schools go to pay fees for private companies called “charter management organizations.” That’s a problem.

Connecticut law states that a charter management organization (CMO), “means any entity that a charter school contracts with for educational design, implementation or whole school management services.” These CMOs claim that they are private corporations, not public agencies. Organizations that claim to be CMOs in Connecticut include Achievement First; Capital Preparatory Schools; DOMUS, and Jumoke/FUSE, which is now defunct. It’s often hard to tell the difference between the CMO and the charter schools they manage.

So how does this CMO thing work? As state law shows, CMOs are similar to school districts. They can provide the services that a school district would perform for local schools such as management or operations.

Roughly 10 percent of a charter school’s budget can go toward management fees. For example, the New Haven-based CMO called Achievement First charged Achievement First-Hartford Charter School a $1.14 million management fee in 2013-14. The state provided Achievement First-Hartford charter schools more than $11 million to operate. So about 10 percent of that state funding went to Achievement First the CMO, not the charter school in Hartford, which ended the year with a surplus.

For every $100 dollars the public spends on this charter school, the CMO called Achievement First gets $10 off the top.

Multiply this fee by the four Achievement First charter schools in Connecticut, and Achievement First Inc., the CMO, walks away with about $4.45 million in fees.

Source: CT SDE Annual Charter School Reports, 2014-15

The charter schools that we know pay charter management fees to CMOs have included the Achievement First schools, Stamford & Trailblazers Academies (DOMUS), and Jumoke until recently. Interestingly, the proposed Capital Prep Harbor School in Bridgeport would pay a 10 percent management fee to the Capital Prep CMO. Recent reports show that lobbyists have spent thousands to get this new charter school established.

Not all charter schools are managed by CMOs or pay these management fees. In 2012-13, most charter schools in Connecticut did not pay a “charter management fee.” These charter schools included: ISAAC, Common Ground, Explorations, Odyssey, New Beginnings, Bridge Academy, Highville, Side by Side, Park City Prep, Integrated Day, and Charter School for Young Children.

Simply put, charter schools can operate without the need to pay fees to CMOs.

There is a pattern here. The groups that would benefit the most from charter management fees are among the most vocal advocates for more charter schools managed by CMOs, like Capital Prep Schools Inc.

The charter schools that don’t pay CMOs are not as active in the massive lobbying effort this year for more charter schools. This is a key difference among Connecticut charter schools.

Source: Connecticut State Department of Education, 2014 Instead of operating schools as public responsibilities, CMOs operate charter schools as moneymaking arrangements, almost like fast-food franchises. Companies like Subway Inc. charge local franchises a fee for services ranging from start-up, food supplies, to signage. This is how Subway makes a profit.

The CMOs could be spending this money on millions of dollars in No. 2 pencils, helping to buy foot-long Subway sandwiches at lobbying events, or paying for student field trips to rally for more charter school money. It’s just unclear.

It’s also uncertain whether charter schools could simply perform these services on their own without CMOs. The contracts between CMOs and individual charter schools explain their fees. But the financial report above appears to show that the management fees were charged after paying all operating expenses for the school.

All other public schools and districts must disclose how they spend public dollars. Traditional public, magnet, technical, and charter schools must report their dollars. By law there also are regulations for CMOs, including rules about fees. But the CMOs say they are neither public agencies, nor charter schools!

And recently, Achievement First, among others, fought against a now-dead public accountability bill before the Connecticut General Assembly. The bill would have more clearly required that CMOs be subject to the Freedom of Information Act. (It’s already fairly clear, but CMOs don’t think the current rules apply to them.)

Many question where the money is coming from to aggressively lobby for more charter schools. I would add the question, “where are charter management fees going?”

As Rod Tidwell (played by Cuba Gooding Jr.) said to his agent in the film Jerry Maguire, “Show me the money!”

If CMOs won’t show us the money, then maybe we don’t need CMOs or their fees. Charter schools can manage without them.

Robert Cotto Jr. is an elected member of the Hartford Board of Education and a lecturer in the Educational Studies program at Trinity College. Reach him by .(JavaScript must be enabled to view this email address).

DISCLAIMER: The views, opinions, positions, or strategies expressed by the author are theirs alone, and do not necessarily reflect the views, opinions, or positions of CTNewsJunkie.com.

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Comments

(11) Archived Comments

posted by: Cladd | May 21, 2015  6:11am

Mr. Cotto makes a good case here for the FBI to consider expanding their investigation of FUSE/Jumoke to include other CMO’s.

posted by: ocoandasoc | May 21, 2015  2:39pm

The charter school folks have to charge fees to pay for promotion, public education and lobbying costs. They can’t tap into the millions in union dues that CEA and AFT have. (BTW, that money comes from taxpayers, as well!)

posted by: Sarah Darer Littman | May 21, 2015  3:26pm

“charters outperform public schools by a very significant degree, cost less to the taxpayer (AF spends $13K per pupil vs Hartford PS > $20K per pupil) and Cotto objects to 10% overhead expense? “

Where is your evidence for this? Where is your data? Since CMO’s won’t open their books to public scrutiny - in fact Eva Moskowitz of Success, with the full support of the NE Charter School Association - went to court in order to prevent it - we only have your word for it. And frankly, I’m not willing to take your word for it. Especially since the evidence of charter fraud and malfeasance nationwide is overwhelming.

As for Ocoandosoc, union dues are taxpayer money? My AAUP dues are DEDUCTED FROM SALARY my adjunct professor salary - which is ridiculously low to begin with. It is paid out of my EARNED INCOME. So yes, my salary is taxpayer money, but the dues are paid from MY MONEY. The money I FREAKING EARNED. You can’t double dip there, buddy.

posted by: ocoandasoc | May 21, 2015  5:29pm

Sarah—By your comments on this and other posts I understand that you don’t identify as, or empathize with, CT taxpayers. But you ARE one. So the money you pay in union dues IS your money—but since you (like it or not!) are a taxpayer, the dues you and your peers pay are taxpayer dollars.
And I love the way you criticize another poster’s statement of facts because he provides no evidence, then counter with your own undocumented (and quantitatively erroneous) blanket assertion that “the evidence of charter fraud and malfeasance nationwide is overwhelming.”
And, btw, I never double-dip.

posted by: DrHunterSThompson | May 21, 2015  6:54pm

I don’t get it - can’t we just make ALL public schools charter schools?

There, done. Next ......

HST

posted by: Sarah Darer Littman | May 21, 2015  7:22pm

Ocandsoc - first of all, if you say that I don’t identify with or empathize with CT taxpayers, I suggest you a) go get an eye test for new reading glasses and b) get tested for reading comprehension and/or c) actually READ some of my columns.

Secondly, and more to the point, the term “taxpayer dollars” as defined by the Financial Times, is “another way of describing public spending.” The income a resident earns and spends is NOT taxpayer money. You are wrong.

posted by: Sarah Darer Littman | May 21, 2015  7:33pm

ABC - you keep telling me to go to Guidestar and there will be all the information I want. Funny, I’ve been there and there isn’t.

As for charter fraud - I didn’t mention Achievement First. You did. Guilty conscience?

As for charter school scandals -

Probulica: Evaluating Charter Schools

Integrity In Education: Charter Fraud

LA Times: Report calling for more oversight to prevent charter school fraud draws rebuke

US Inspector General report which details charter school vulnerability to waste, fraud and abuse.

I could go on all night, but this gives CTNJ readers a start.  There’s so much more evidence. Now let’s see yours, instead of the usual bluster.

posted by: Sarah Darer Littman | May 22, 2015  6:58am

ABC keeps repeating, without addressing the criticism “On the academics, go on the State SDE website and see for yourself that most charters in Ct outperform not only their host districts on academic tests but also the majority of suburban districts.”

Once again, for the record - when you say “outperform their host districts” that is because they are not serving a similar population to their host districts. This has been shown time and time again in multiple pieces on this site, and other sites and numerous studies, but you still keep repeating the same talking point as if it is fact.

I bet if the district schools could push out their SPED and ELL students they could improve their test scores too. But they can’t, nor is that the purpose and goal of public education. And before you start trying to deny that it happens in charter schools, let’s remember that there is audio evidence that suggests otherwise here and here.

And here in CT, with good old Achievement First.

posted by: Bronx | May 22, 2015  6:58pm

Besides creaming their populations, it’s pretty clear Charter schools are fixated on testing. With stories of children at Success academies urinating in their seats to the hours dedicated to pre-testing with extended school days, Charters have been successful in creating little test takers. Is this really the sign of a quality education? It would be interesting to see how many of the children of the State Board of Education members, or children of Achievement First associates, or Conncann are exposed to the hours of pre-testing and testing in their respective schools. Since it seems this corporate reform agenda wants to be able to quantify everything in public education, we see testing is used as the catalyst to create artificial numbers and measures of success, while attaching evaluations of union teachers to the same poorly designed tests which have no diagnostic value.It’s pretty transparent and very self-serving, and it’s good to see Charters aren’t viewed as a magical elixir to the ills of education (hint; it’s poverty,)anymore. The numerous scandals nationwide,bogus Dr. Sharpe, and the Eva Moskowitz’s of the world have opened many eyes finally.

posted by: Truth_To_Power | May 23, 2015  10:38am

Sarah continues the public-sector sleight-of-hand, misdirection game by pretending her union dues are NOT taxpayer money, when of course they are. And her union membership makes sure that if costs go up that the rest of us have to absorb into out budgets, she gets an increase in her pay - again, from the taxpayers.

Worst of all, she continues to offer the same old tired nonsense in the face of the fact that in the case of HER pay and percs, we private sector taxpayers DON’T HAVE A CHOICE. Our taxes our extracted from us by force and paid to the public sector through the egregious game called ‘collective bargaining’ where the taxpayer doesn’t have a seat.

So Sarah hates any educational choice for private sector taxpayers that might infringe on her ‘golden goose’ compensation scheme - I get it. But let’s make sure we all recognize her obvious and blatant subjectivity during these discussions.

On subjects in which she isn’t so directly financially invested, she might (justly) complain that taxpayer money given to the educational establishment is not redirected to competing charter or magnet schools - it stays with the school departments! How fair is that? Quite fair if you benefit from the arrangement, apparently. And even more so when your principals seem to come with a price.

posted by: Sarah Darer Littman | May 23, 2015  1:12pm

ABC - I WENT to those worst schools in Stamford. And I graduated magna cum laude from Duke. Enough already.

Truth to Power - I’m curious - where did you study economics? Because your understanding of macroeconomics is really…curious. By your definition of “taxpayer money” any money earned by any taxpayer is “taxpayer money”. So by that definition, the money earned by hedge funders and paid to ConnCan to lobby for charter schools is “taxpayer money.” Honestly, can you please go take in basic macro? The ignorance is just astounding.

As for my “golden goose” compensation scheme - LOLOLOLOLOL. Have you ever seen what adjunct professors make? Trying to figure if WSCU is the second or third worst paying of my five jobs And OMG the chutzpah to talk about “golden goose compensation schemes”. Have you looked at private sector CEO pay? Ever heard of “golden parachutes”?