LANSING -Today State Representatives Sarah Roberts (D-St. Clair Shores), Ellen Cogen Lipton (D-Huntington Woods), Jeff Irwin (D-Ann Arbor), David Nathan (D-Detroit) and Charles Brunner (D-Bay City) announced legislation that would create transparency and accountability standards for charter schools, charter school authorizers and the for-profit educational management organizations that contract to run many charter schools. The standards are called for in House Bill 5852, which would enact a moratorium on opening any new charter schools until legislation is passed to ensure that they are transparent, accountable and have strong governance standards in order to best educate our students.

The charter school transparency and accountability legislation would:

  • Require complete transparency, including financial disclosure by authorizing bodies, charter schools and educational management organizations.

  • Require charter schools contracting with an educational management organization (EMO) to post on their websites audited financial statements from their EMO.

  • Require charter schools to post on their websites a detailed accounting of fees, reimbursements and charges collected by their authorizer.

  • Require EMOs to provide charter schools with a list, description and cost of each fringe benefit included in the compensation package for all employees, officers and board members of the EMO whose compensation exceeds $100,000.

  • Prohibit authorizers from contracting with a charter school whose contract has been terminated for poor academic performance.

  • Prohibit authorizers from issuing new charter school contracts if authorizers are not providing proper oversight to their current charter schools. It also gives strong oversight authority to the state superintendent and creates an appeals process to the state Board of Education.

  • Prohibit school officials from requiring employees to sign non-disclosure agreements and from signing with an EMO who requires or requests non-disclosure agreements.

“For-profit education management organizations receive public tax dollars from the charter schools they contract to operate. They must be held publicly accountable for how they spend our tax dollars, just like every other public school,” said Rep. Roberts. “For-profit EMOs have claimed they don’t need to fully disclose how they spend our money because they are private companies. That is wrong.”

A Detroit Free Press investigative series on charter schools that ran in June outlined some troubling findings, including a lack of financial transparency and accountability, authorizers allowing poor performing charters to stay open and unaddressed conflicts of interest. Michigan spends $1 billion annually on charter schools. A June 22 Free Press story on charter school spending included a list of “excessive spending and misuse of taxpayer dollars,”(1) including: a charter school board giving an administrator a severance package worth $520,000 in taxpayer money and the removal of two board members who had challenged their management company over finances.

“All public schools have to post their finances and spending on a website. For-profit education management organizations and those who authorize charters schools must fully disclose how they spend education dollars. Parents and the taxpayers have a right to know how their money is being spent to educate children,” said Rep. Lipton. “This package of bills will create necessary standards for transparency and accountability.”

According to the Free Press series, 38 percent of charter schools that were ranked according to academics by the state fell below the 25th percentile. That means that 75 percent of all schools in Michigan performed better academically than these charter schools.(2)

“Twenty years ago, charter school supporters promised that their schools would outperform traditional public schools, and that their innovations would lift up our traditional public schools,” said Rep. Irwin. “Unfortunately, many charters aren’t living up to their promises, and are instead siphoning off classroom dollars for corporate profits and sweetheart real estate deals. That’s why parents need more tools to make an informed choice and why taxpayers are demanding transparency and accountability for the $1 billion dollars going to charters.”

“Parents choose charter school because they want a better educational outcome for their child, and that is why we have to do a better job of holding these schools accountable,” said Rep. Nathan. “Holding authorizers of charter schools accountable to see that they are only authorizing the best charter schools will ensure that students, and not profits, are first.”

An EPIC-MRA poll conducted in August found that 88% of respondents support legislation requiring for-profit education management companies to report how all tax dollars are spent under the same guidelines that are currently required for traditional public schools. Another 84 percent agree that Michigan needs laws requiring that all charter schools meet the same standards for accountability, transparency and student performance that traditional public schools must meet.

Unfortunately in Michigan some teachers and administrators are afraid or unable to repot problems in the charter schools they work in. Some are even required to sign non-disclosure agreements. This inhibits transparency and accountability in any school.

“Non-disclosure agreements have no place in traditional public schools or in charter schools,” said Rep. Brunner. “Employees have a right to speak out if they believe those who run charter schools are doing something wrong. Freedom of speech should not be limited because some may be scared of what could be said.”

(1)”Michigan Spends $1 B on charter schools but fails to hold them accountable,” Jennifer Dixon, The Detroit Free Press, June 22, 2014.