Reform of Arizona’s Charter School Laws Critically Needed
Monday, Dec. 18, 2017 (Phoenix) – Arizona’s charter school laws are in need of reform; two recent reports question the practices of charter holders that enroll 16 percent of the state’s K-12 student population and receive over $1 billion in public funds each year.
“Charter schools have been operating in Arizona for more than 20 years, funded with taxpayer dollars while operating with significantly less oversight than public district schools,” said George Cunningham, Chair of the Grand Canyon Institute (GCI), a nonpartisan public policy think tank. “It is time to review and reform the state’s charter school laws in terms of legally permitted self-enrichment practices and discriminatory admission practices documented in the two reports released this year.”
In September, GCI released the policy report Following the Money: Twenty Years of Charter School Finances in Arizona, a meta-analysis of charter school financial data including audits, Annual Financial Reviews (AFRs) and IRS 990 filings for nonprofit organizations. The report found that 77 percent of charter holders use their state taxpayer funds for potentially questionable financial transactions where operators of charters contracted with themselves or related parties in a manner that was not cost effective. That practice is illegal for district schools, but permitted for charters. Key recommendations from the report – which would require the adoption of new laws or regulations – include that charter schools:
- Conduct public competitive bid processes similar to public district schools.
- Ensure consistency among their Annual Financial Reviews (AFRs), audits and IRS 990 filings.
- Adopt executive salaries reasonably comparable to similarly-sized public district schools.
- Be subject to annual audits by the state Auditor General similar to public district schools.
On Dec. 14, the American Civil Liberties Union of Arizona (ACLU-AZ) released the report Schools Choosing Students, which analyzed exclusionary charter school enrollment policies. The report found that “out of the 471 Arizona charter schools that were analyzed, at least 262, or 56 percent, have policies that are clear violations of the law or that may discourage the enrollment of certain students.”
Key recommendations from Schools Choosing Students include that charter schools:
- Must make it clear that the school will provide special education services as required by state and federal law. Limits on the number of special education students enrolled are forbidden.
- Should wait to request academic records until after the enrollment process is complete.
- Must provide enrollment documents in English, Spanish and other languages as appropriate to the school’s surrounding population.
- Should make clear that donations by families are optional and will not effect enrollment.
While the ACLU-AZ report questioned the oversight provided by the Arizona State Board for Charter Schools (ASBCS), GCI to date has found that the regulatory body is limited due to insufficient resources to properly fulfill its obligations. The ASBCS has 14 staff members to oversee more than 500 charter schools. By contrast, Washington, D.C.’s charter school regulatory board oversees one-fifth as many schools but has twice the staff based on information the ASBCS provided to the Auditor General in 2013.
“Families do not have true school choice in Arizona given the practices of a majority of charter schools,” said Cunningham. “Questionable financial transactions resulting in a possible squandering of public funds by charter school holders and discriminatory enrollment practices that adversely affect students and their families are undermining the credibility and viability of the charter school system.
“Public confidence and support needs to be shored up by legislative action that prohibits these financial irregularities and more effectively prevents discriminatory practices. Then Arizonans will have a charter school system we can all be proud of.”
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For media release fully contained under summary.