After a scathing state audit of its finances, the EPIC virtual charter school cut its ties to the school’s for-profit co-founders.

The governing board of Epic Charter Schools underwent a major overhaul Wednesday night and then declared its independence from the for-profit school management company owned by Epic’s co-founders.

Epic’s seven-member board of education unanimously approved a mutual termination agreement, effective July 1, to end its contract with Epic Youth Services, which reportedly has made millionaires of founders David Chaney and Ben Harris.

“Big day for our school; big shift, obviously,” said the newly seated board Chair Paul Campbell, an aerospace and energy executive who founded the Academy of Seminole charter school.

“This school has outgrown its management company, CONTINUE READNG: Oklahoma: Epic Virtual Charter Severs Ties to Co-Founders’ For-Profit Firm After Paying Them Millions | Diane Ravitch's blog

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.

• In early March, the Columbus Dispatch reported that the Electronic Classroom of Tomorrow (ECOT), a giant, online charter school put out of business in the winter of CONTINUE READING: Eliminating Federal Charter Schools Program Would Curb Academic and Financial Abuses by Charter Operators | janresseger

 Some of the post may seem familiar as I wrote most of it last year. I am just going to update it every time a new IDEA scandal hits the news.

IDEA Public Schools CEO JoAnn Gama and Chief Operating Officer Irma Munoz have been fired after a forensic review found “substantial evidence” that top leaders misused money and staff at the state’s largest charter school network for personal gain, the organization’s board president announced Tuesday.  

Jacksonville needs another charter school like the average person needs another hole in their head and I think most people would agree. That however isn't going to stop DCPS from approving a massive expansion at their next board meeting. Here is the thing, the state despite the Florida constitution saying the school board is the final say doesn't give them a lot of leeway, but that being said wouldn't you like a little fight out of the board?

The IDEA charter school wants to open, and this is just a start, three new charter schools. You may have CONTINUE READING: Education Matters: Troubled IDEA charter chain coming to Jacksonville in even more trouble

OKLAHOMA CITY (KFOR) – The multicounty grand jury investigating Epic Charter Schools has released a scathing interim report of its findings following the state’s audit report against the school.

According to the report, “Due to the lack of transparency in accounting for the funds, intentional avoidance of disclosure of information by a private entity, and lack of cooperation; the investigation is unable to be completed at this time.”

The concerns from the Audit Report and the subsequent investigation by the Multicounty Grand Jury can be summarized as:

• Lack of oversight
• Lack of transparency in operations
• Lack of accountability by for-profit company Epic Youth Services

By failing to provide appropriate oversight, the entities responsible have allowed significant public funds to be diverted into private accounts without transparency. The public has not been served by the incestuous relationship between the for-profit vendor, Epic Youth Services, and the governing board Community Strategies. The system has failed to provide accountability and allowed a company to take advantage and generate a substantial personal profit on the backs of Oklahoma students. This is especially offensive at a time when Oklahoma students and parents are struggling with the weight of the pandemic and its effects on our students’ education and wellbeing.

This interim report focuses on the for-profit vender, Epic Youth Services LLC (EYS).

“The incestuous relationship between the board and a private vendor has resulted in a lack of independent oversight,” the report states. “As designed, this system is ripe for fraud.”

From 2015 to 2020, Epic Charter Schools received more than $458 million in state and federal funds as a  CONTINUE READING: ‘Ripe for fraud’: Multicounty Grand Jury releases interim report on Epic Charter Schools investigation | KFOR.com Oklahoma City

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

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

The Mind Trust in Indianapolis has been the central engine of charter creation in that city and holds itself up as a model charter authorizer.

Until it was “deceived” by a would-be charter operator with a rosy vision, according to this story by Stephanie Wang in Chalkbeat Indiana.

She begins:

To launch a “transformational” middle school in an overlooked eastside neighborhood, Indianapolis charter advocates turned to a man students call Coach T.

For two decades, Tariq Al-Nasir ran his Stemnasium enrichment programs with a mission of helping Black and brown students realize their “superpowers” in science, technology, engineering, and math. With a resume boasting advanced degrees from MIT and Stanford, Al-Nasir put forward a vision of education in which hands-on lessons in coding, flying drones, and tinkering with robots could change children’s lives.

Calling him “brilliant” at working with students, the influential charter incubator The Mind Trust gave Al-Nasir a two-year, $800,000 fellowship last summer to develop CONTINUE READING: The Mind Trust in Indiana Gives $800,000 to Charter Operator, Ignoring Lawsuits, Multiple Financial Scandals and Fake Resume | Diane Ravitch's blog

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

The governing board of Epic One-on-One Charter School agreed to the Statewide Virtual Charter School Board’s proposed settlement terms Wednesday night, one day after the SVCSB rejected Epic’s initial proposal.

The new settlement agreement (embedded below) still needs to be approved by the SVCSB, but Epic released a statement Wednesday night saying its new “settlement agreement reflects the exact terms proposed by the SVCSB at its April 20, 2021, meeting.” If approved, the Epic settlement would conclude the SVCSB’s charter termination proceedings, which began months ago in the wake of a state audit of Epic’s governance, finances and controversial “learning fund.”

“While we have objected to the politicization of the (state) audit and some of its findings, we have implemented many changes it recommended to strengthen our school and make our operations more transparent,” said Community Strategies Board President Doug Scott in a statement. “We’re in a different, stronger and better place than we were six months ago, and I’m proud of the hard work of this Board and our school leaders. I want to thank the SVCSB and executive director Dr. Rebecca Wilkinson for her leadership during this period of time. Everyone involved has a servant’s heart and wants to serve children and families to the best of our ability.”

Wilkinson did not return a phone call seeking comment about the Epic settlement CONTINUE READING: Epic board agrees to SVCSB settlement terms

The Statewide Virtual Charter School Board held a special meeting this afternoon where members approved a motion to draft a new consent agreement to conclude charter termination proceedings with Epic One-on-One Charter School.

Epic attorney Bill Hickman and assistant Attorney General Marie Schuble will each submit new Epic settlement proposals with amendments requested by the SVCSB, such as full cooperation with the State Auditor & Inspector’s Office and the appointment of a compliance officer.

Epic’s governing board had proposed a settlement agreement at its April 14 meeting in an effort to resolve the SVCSB’s charter termination case, but the Statewide Virtual Charter School Board declined to accept their proposal today.

“I’d like to make a motion to have the parties, through their designated counsel, submit an amended consent order that includes, but is not limited to the sections that (SVCSB director) Dr. Rebecca Wilkinson will CONTINUE READING: Back to the drawing board: SVCSB calls for new Epic settlement proposals

In meetings Tuesday that lasted until after midnight, the governing board of Epic Blended and Epic One-on-One charter schools, Community Strategies, approved a motion that will move the school’s controversial learning fund from private account management to public bank accounts.

The board also approved items after a nearly four-hour executive session, including a settlement proposal regarding contract termination proceedings with the Statewide Virtual Charter School Board.

Epic’s learning fund reimburses the families of Epic Blended and Epic One-on-One students for up to $1,000 of educational curriculum or extra-curricular purchases and is currently administered by the for-profit management company Epic Youth Services, which is owned by Epic co-founder Ben Harris and David Chaney.

Epic’s assistant superintendent of finance, Jeanise Wynn, presented the proposed changes, which would, effective July 1, place all funds allocated to the learning fund in bank accounts owned by Community Strategies doing business as either Epic Blended Learning Charter or Epic One-on-One Charter School, respectively.

“This will also require that all revenue and expenditure records for the public bank CONTINUE READING: Epic's controversial 'learning fund' will change, settlement proposed for SVCSB

Yesterday, State Auditor and Inspector Cindy Byrd’s gave a virtual presentation over her office’s findings in the investigation of Epic Charter Schools. The 45 minute video is now all over the World Wide Web Web and continues to be shared. It should also be required viewing for all educators parents, and … well, taxpayers. And probably legislators.

As important as the presentation is, I know that the tl;dr phenomenon applies to video content as well. I taught high school English long enough to understand that just because I assign it, doesn’t mean you’ll read all of it. That being said, let me cut it up into bite-size pieces for you.

I have taken screenshots of what I think are the ten most important slides from Auditor Byrd’s presentation. I’ll do my best to summarize them, but honestly, watching the whole thing (with captioning), is really worth it. After watching it in the morning, I even kept it on loop again yesterday afternoon while working in my office.

1. Governor Stitt initiated the audit process, writing to Auditor Byrd, “I respectfully request an audit of Epic Charter School and all related entities.” This isn’t the first slide in the presentation, but I’m doing the first two in reverse order. Too many times, I’ve seen the state’s leading far-right think tank accuse Epic’s detractors of being anti-choice.

Hardly.

This audit, which began six months into Stitt’s term, is about assuring that tax dollars go where they’re supposed to.

The other notable part here is that Stitt addresses not only Epic, but also all related entities. As Byrd demonstrates clearly, there is  CONTINUE READING: The 10 Most Important Slides from the State Auditor and Inspector’s Epic Presentation | okeducationtruths

Carol Corbett Burris was a teacher and principal on Long Island, in New York state for many years. After retiring, she became executive director of the Network for Public Education.

She writes:

Last spring, HBO released Bad Education, which tells the story of how a Roslyn, New York Superintendent named Frank Tassone conspired to steal $11.2 million with the help of his business officer, Pamela Gluckin.  Promo materials called the film “the largest public school embezzlement in U.S. history.”

I did not watch it. I am waiting. I am waiting for HBO to release a movie on how a crafty fellow from Australia, Sean McManus, defrauded California taxpayers out of $50 millionvia an elaborate scheme to create phony attendance records to increase revenue to an online charter chain known as A3. 

Or the documentary about the tens of millions that the Electronic Classroom of Tomorrow (ECOT) owes taxpayers for cooking the books on attendance. Or CONTINUE READING: Carol Corbett Burris: Why Do Charter Schools Get Away with Massive Fraud? | Diane Ravitch's blog