CCCTEC

Now closed Sacramento charter school advertises for students on opening day last fall Photo by Louis Freedberg

The California Department of Teaching is looking into the loss of upwardly of "tens of millions of dollars" in federal and state funds from start-up charter schools that either never opened or failed after their start year or two of operation.

Richard Zeiger, chief deputy superintendent in the California Department of Teaching, start made that assertion at the State Board of Didactics meeting on September vii after the closure of a Due west Sacramento career technical instruction lease school.

Zeiger said the state finds itself having to balance wanting to encourage innovation with ensuring that land and federal funds are not misspent.

The California College, Career and Technical Center, or CCCTEC, opened last September, in a vast building in an industrial park leased from a high tech company that moved its operations overseas.

Just despite making grand promises of what it hoped to achieve, backed up by its slogan "where eagles soar and students thrive," the schoolhouse had issues most from day one, leading somewhen to its declaring defalcation and closure on September ii, 2011.

At its September meeting, the Land Board of Pedagogy was informed that the school had closed and relinquished its lease, after spending near $1 million in grants and loans from state and federal sources.  "This is not an isolated instance of a get-go-upwardly charter getting into trouble," Zeiger, the chief deputy to State Superintendent of Public Teaching Tom Torlakson, told the lath. "This happens with corking regularity."

In a afterward interview with EdSource Actress, Zeiger said the department is all the same researching the issue of funds spent by failed charter schools that never opened or failed early on on. Although these comprise a pocket-sized fraction of the nearly 1400 California charters awarded in nigh two decades, "nosotros're easily into the tens of millions of dollars, and it wouldn't surprise me if it went higher," he said.

Jed Wallace, president of the California Lease Schools Association, said he could not comment on Zeiger's assertions without farther details. "It is pretty hard to react to something when there has been no release of data," he said.

Wallace said the primary challenge for beginning lease schools are the difficulties they face in getting funds for which they are eligible, including unnecessary delays past government agencies. "The challenge that these schools face are profound," he said.

Eric Premack, executive manager of the Lease Schools Development Middle, said that in the case of charters granted by the State Lath, as was the example with CCCTEC, it typically takes months to get through the appeals procedure, and "schools come out of the chute late," resulting in a cascade of financing and other difficulties.

Simply what is articulate is that in the drive to encourage charter schools to open up, new schools are eligible for a range of federal and country funds which they can receive even if the schoolhouse struggles to open or to sustain itself.

Total number of charter schools in California has increased over time

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For example, new lease school operators can be awarded upwards to $600,000 in federal start-up grants through the Public Charter School Grant Program, upwardly to $250,000 from the state'southward Charter School Revolving Loan Fund, as well as hundreds of thousands of dollars in state funds based on the school's projected "average daily attendance."

Every bit the California Department of Pedagogy website states, "charter schools that are in their offset year of operation may receive a special advance and or special allocation such as General Purpose Entitlement, Charter Schools Chiselled Cake Grant, and certain country and federal categorical programs."

"All this is money that tin be given in advance before the school has ever opened," said Zeiger.  "If the school runs into difficulties, it may never open at all.  Or you notice after a year that it has non been viable, so what do you lot practise?"

Although not alleging that schools broke the law, Zeiger said function of the trouble is the law itself. "The law was written to encourage outset-ups, and one way to exercise that was to make money easily available," he said.

Without providing specifics, Zeiger said that there has been an "unusually loftier" default charge per unit on loans made from the revolving loan programme. He said the process in the past has been to "push coin out the door and terminate up with a bunch of bad loans."

"We are now looking into that," Zeiger said.

In fact, the state education code specifically states that priority in granting loans "shall be given to new charter schools for start-up costs." To repay the loans, the law requires the state to automatically deduct payments from the annual amount it gives the lease school for its operations (known as its annual "apportionment"), over a period of upwards to v years.  However, if the lease schoolhouse never opens, or goes out of business within a year or two, collecting on the loan becomes extremely hard.

Premack said that the regulations around the loans were "unusually lax," and that "more work is needed in this area" to lower the possibilities of default.

Another problematical area is that beginning-year charter schools go a lump sum payment based on their projections of what their "average daily omnipresence" will exist subsequently it opens. Schools have to file those projections by the end of July, before any students have actually enrolled. By contrast, regular public schools and established charter schools are paid based on their actual attendance, not estimates.

But Zeiger said that, as in the case of the now defunct CCCTEC, some "badly overestimate" the number of students they eventually enroll. Charter schools are required to report their actual attendance on their 20th day of classes, which should requite the state an opportunity to adjust how much a school gets paid. Just it is non entirely articulate how the state recovers its funds if they have advanced far more dollars than can exist justified by actual attendance.

In fact, CCCTEC's founder and old superintendent Paul Preston said that 400 Sacramento-surface area students had signed up for the school. He expected that about 200 would evidence up. Instead, he said on the xxth day of classes, 84 students were enrolled, and "boilerplate daily attendance" was 44.  According to i California Department of Education study, the country overpaid the school $219,000 in this one category alone.

Preston, who insists that the educational model on which his schoolhouse was based works, blamed some of the depression enrollment on the local fire align who last fall delayed issuing a allow for the building until three weeks later the scheduled opening solar day. Every bit a consequence, students who intended to enroll at CCCTEC turned to other schools instead. "I knew nosotros were in trouble the day we started,"  Preston said.

Nonetheless in one of many reports send to the school in its last months, the California Department of Education alleged that the "school had failed to run into generally accepted accounting principles or engaged in fiscal mismanagement."  Zeiger said the country will have to ramp upwards its oversight of charter schools  "because it is our responsibility to brand certain that taxpayer monies are existence spent responsibly, peculiarly in these difficult times."

He said finding the right residuum between fiscal accountability and fostering innovation will be a challenge.  "Just nosotros accept to start that word."

Said Jed Wallace of the California Charter Schools Association, "There will always be some number of charter schools that launch badly or don't get off the ground." To help minimize their issues, he said, the land has to exist much more than responsive in processing claims for funds. "We are highly motivated to make sure that resources are used as wisely as possible."

For more on the growth of charter schools in California, see EdSource'south several reports on the subject.

Adjacent: Land burdened by oversight of more charter schools

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