D.C. Charter Schools: Strengthening Monitoring and Process When
Schools Close Could Improve Accountability and Ease Student
Transitions (17-NOV-05, GAO-06-73).
D.C. has a larger percentage of students in charter schools than
any state. To help oversee D.C. charter schools, Congress
established two authorizers--the Board of Education (BOE), which
has an Office of Charter Schools responsible for oversight, and
the independent Public Charter School Board (PCSB). Congress
required the GAO to conduct a study of the authorizers. This
report--which completes GAO's May 2005 study--examines the (1)
authorizers' resources, (2) oversight practices, and (3) actions
taken once charter schools close. GAO examined BOE and PCSB
monitoring reports, revenue and expenditure documents, and
closure procedures.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-06-73
ACCNO: A41620
TITLE: D.C. Charter Schools: Strengthening Monitoring and
Process When Schools Close Could Improve Accountability and Ease
Student Transitions
DATE: 11/17/2005
SUBJECT: Accountability
Charter schools
Comparative analysis
Consultants
Employees
Internal controls
Policy evaluation
Public schools
Records
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GAO-06-73
* Results in Brief
* Background
* D.C. Authorizing Boards Differed in Revenue and Their Use of
* BOE Office of Charter Schools Received Less Funding and Had
* PCSB Received More Funding and Had More Staff to Oversee Sch
* Both Authorizers Spent Their Financial Resources to Support
* Both Authorizers Provided Technical Assistance and Collected
* Both Authorizers Provided Schools with Technical Assistance
* BOE Collected Data Uniformly from Schools, but Did Not Alway
* PCSB Used Data to Target Additional Monitoring Efforts to Sc
* Authorizers Undertook a Wide Range of Activities When School
* When Schools Closed, Authorizers Took Actions to Manage Stud
* Overseeing School Closures Was Sometimes Costly for Authoriz
* Managing Student Records Was the Most Challenging Aspect of
* Process for Closing Schools Often Varied with Each Closure
* Conclusions
* Recommendations for Executive Action
* Agency Comments and Our Evaluation
* Analysis of Financial Documents
* Analysis of Monitoring Documents
* Focus Groups
* Analysis of Documentation from Closed Charter Schools
* GAO Contact
* Staff Acknowledgments
* GAO's Mission
* Obtaining Copies of GAO Reports and Testimony
* Order by Mail or Phone
* To Report Fraud, Waste, and Abuse in Federal Programs
* Congressional Relations
* Public Affairs
Report to Congressional Committees
United States Government Accountability Office
GAO
November 2005
D.C. CHARTER SCHOOLS
Strengthening Monitoring and Process When Schools Close Could Improve
Accountability and Ease Student Transitions
GAO-06-73
Contents
Letter 1
Results in Brief 3
Background 5
D.C. Authorizing Boards Differed in Revenue and Their Use of D.C.
Government Services, but Spent Their Financial Resources on Similar
Oversight Activities 13
Both Authorizers Provided Technical Assistance and Collected Academic,
Financial, and Other School Data, but Extent and Level of Oversight
Differed 20
Authorizers Undertook a Wide Range of Activities When Schools Closed, but
the Process Was Not Well Defined 26
Conclusions 29
Recommendations for Executive Action 30
Appendix I Objectives, Scope, and Methodology 32
Appendix II Comments from the D.C. Board of Education 36
Appendix III Comments from the PCSB 39
Appendix IV GAO Contact and Staff Acknowledgments 40
Related GAO Products 41
Tables
Table 1: Characteristics of D.C. Charter Schools, School Year 2005-2006 10
Table 2: Authorizer Revenue, Fiscal Years 2004 and 2003 15
Table 3: Authorizers' Expenses, Fiscal Years 2004 and 2003 19
Figures
Figure 1: D.C. Offices with Responsibilities to Charter Schools 7
Figure 2: Overview of D.C. Authorizers' Monitoring Process 8
Figure 3: Authorizer Staffing Levels and Schools Overseen, School Year
2004-2005 16
Figure 4: BOE Office of Charter Schools and PCSB Expenses, Fiscal Year
2004 18
Abbreviations
BOE Board of Education
PCSB Public Charter School Board
IDEA Individuals with Disabilities Education Act
FY fiscal year
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separately.
United States Government Accountability Office
Washington, DC 20548
November 17, 2005 November 17, 2005
The Honorable Sam Brownback Chairman The Honorable Mary L. Landrieu
Ranking Minority Member Subcommittee on the District of Columbia Committee
on Appropriations United States Senate The Honorable Sam Brownback
Chairman The Honorable Mary L. Landrieu Ranking Minority Member
Subcommittee on the District of Columbia Committee on Appropriations
United States Senate
The Honorable Joe Knollenberg Chairman The Honorable John W. Olver Ranking
Minority Member Subcommittee on Transportation, Treasury, and Housing and
Urban Development, the Judiciary, District of Columbia, and Independent
Agencies Committee on Appropriations House of Representatives The
Honorable Joe Knollenberg Chairman The Honorable John W. Olver Ranking
Minority Member Subcommittee on Transportation, Treasury, and Housing and
Urban Development, the Judiciary, District of Columbia, and Independent
Agencies Committee on Appropriations House of Representatives
When the school doors opened for the 2004-2005 school year in the District
of Columbia, over a fifth of all students were attending charter schools.
The District of Columbia has a larger percentage of students enrolled in
such schools than any state. Six new charter schools opened in the
2004-2005 school year alone. To help fund the growing number of charter
schools, Congress designated $13 million specifically for D.C. charter
schools in the 2005 D.C. Appropriations Act. When the school doors opened
for the 2004-2005 school year in the District of Columbia, over a fifth of
all students were attending charter schools. The District of Columbia has
a larger percentage of students enrolled in such schools than any state.
Six new charter schools opened in the 2004-2005 school year alone. To help
fund the growing number of charter schools, Congress designated $13
million specifically for D.C. charter schools in the 2005 D.C.
Appropriations Act.
Charter schools are public schools that are exempt from certain state and
local regulations in exchange for increased accountability for improving
student achievement. Charter school authorizers-the entities that approve
and oversee charter schools-are responsible for ensuring that charter
schools achieve expected outcomes and comply with applicable laws. The
District of Columbia School Reform Act, as amended, (D.C. School Reform
Act) established two entities, the D.C. Board of Education (BOE) and the
D.C. Public Charter School Board (PCSB), as charter school authorizers.
The law requires that the authorizers approve and oversee charter school
implementation. Although the law gives both authorizers similar
responsibilities, each has some latitude in how it implements these
responsibilities. As an independent agency, the PCSB devotes all of its
resources to charter schools, while the BOE, which also Charter schools
are public schools that are exempt from certain state and local
regulations in exchange for increased accountability for improving student
achievement. Charter school authorizers-the entities that approve and
oversee charter schools-are responsible for ensuring that charter schools
achieve expected outcomes and comply with applicable laws. The District of
Columbia School Reform Act, as amended, (D.C. School Reform Act)
established two entities, the D.C. Board of Education (BOE) and the D.C.
Public Charter School Board (PCSB), as charter school authorizers. The law
requires that the authorizers approve and oversee charter school
implementation. Although the law gives both authorizers similar
responsibilities, each has some latitude in how it implements these
responsibilities. As an independent agency, the PCSB devotes all of its
resources to charter schools, while the BOE, which also has responsibility
for D.C.'s traditional public schools, has established an Office of
Charter Schools to monitor its charter schools. As interest in charter
schools grows among parents, questions have been raised about how the
District oversees its charter schools.
As required by the 2005 D.C. Appropriations Act, we examined the
performance of D.C. charter school authorizers in their oversight roles.
In May 2005, we published the interim findings of our study in Charter
Schools: Oversight Practices in the District of Columbia (GAO-05-490),
which outlined the legal responsibilities of the D.C. authorizers. To
complete our study, we are addressing the following questions in this
report: (1) what resources (financial and otherwise) do the D.C.
authorizers have and how have they used these resources; (2) how have the
D.C. authorizers provided oversight and technical assistance to charter
schools after they have opened; and (3) what actions did the authorizers
take once charter schools closed to help students transition to new
schools, protect student records, and safeguard public assets.
To analyze the authorizers' resources and to learn how they have used
them, we examined their budgets, revenues, and expenses for fiscal years
2003 and 2004. Our budget analysis is based on the amount of funds each
authorizer received per school rather than per student, because the
authorizers provided services that generally benefited schools as a whole,
not individual students. We also examined the authorizers' use of their
staff. To analyze the authorizers' provision of oversight, we examined
monitoring reports, audits, and related documentation from 8 of the 42
D.C. charter schools-4 from each authorizer. These eight schools were
selected to include variety in school performance, demographics, number of
years in operation, and the schools' history of sanctions. Additionally,
we convened two focus groups of charter school administrators (one focus
group per authorizer) to substantiate and augment information the
authorizers provided. Appendix I provides our methodology and additional
information on the schools selected for our document reviews and focus
groups. To analyze the procedures in place once charter schools close, we
examined the actions the authorizers took to address issues arising from
the closure of the nine charter schools that have lost their charters as
of September 2005. In these cases, we examined monitoring reports and
other documents related to the closures and interviewed authorizer staff
and board members. Finally, we examined the authorizers' use of services
available to them by interviewing officials of District agencies,
including D.C. Public Schools, the Office of the Chief Financial Officer,
the Office of the D.C. Auditor, and the D.C. Office of Inspector General.
We conducted our work between January and November 2005 in accordance with
generally accepted government auditing standards.
Results in Brief
The D.C. authorizers differed in the amount of funding, staff, and their
use of available D.C. government services, but spent their financial
resources on similar activities. The BOE Office of Charter Schools
received less in local funds, collected less in administrative fees from
the schools it oversaw, and had fewer staff per school. To help fulfill
its oversight responsibilities, the BOE Office of Charter Schools used
test score analysis provided by D.C. Public Schools and referred four
schools to other D.C. agencies for further examination. The PCSB's total
revenue ($1,349,916 in fiscal year 2004) was more than twice that of the
BOE Office of Charter Schools. It received more in local funds and
collected more in fees from schools than its counterpart. It oversaw,
however, more charter schools and employed a larger staff. Unlike the BOE
Office of Charter Schools, the PCSB has not used D.C. Public School
services, but has referred one school to a D.C. agency for further
examination. Despite these differences, both D.C. authorizers spent their
financial resources to support oversight activities, with the majority of
funds being spent on in-house personnel and operational expenses. Both
authorizers also hired consultants to assist with school monitoring, as
well as application review and school closures.
Both D.C. authorizers provided technical assistance and oversaw charter
schools by tracking schools' academic achievement and financial condition,
but their approaches to oversight differed. With respect to technical
assistance, both authorizers provided some aid to charter schools,
including helping schools improve their academic programs and meet No
Child Left Behind Act requirements. While the BOE and PCSB had similar
oversight practices-both D.C. authorizers visited schools at least once
annually, monitored schools' test scores, and reviewed and approved school
budgets and expenses-the BOE Office of Charter Schools provided the same
level of oversight to all of its 16 schools regardless of risk. This
approach sometimes limited its ability to address the problems that its
oversight revealed. In addition, BOE Board members told us that they did
not regularly review information collected by the BOE Office of Charter
Schools. By contrast, the PCSB targeted additional oversight to new
charter schools and those where problems had been identified. For example,
the PCSB conducted pre-opening visits only for new schools or schools in a
new location, as opposed to visiting all schools each fall. Additionally,
the PCSB targeted extra financial oversight to new schools or schools with
problems. Although some PCSB schools have had problems, the PCSB's
targeted monitoring approach has allowed it to more readily identify
problems and direct monitoring activities to those schools.
Once charter schools closed, both D.C. authorizers undertook a wide range
of activities to safeguard student records and public assets and inform
parents of their children's school options; however, issues arose during
closings that both found difficult to adequately address, particularly
when the closed school was financially insolvent. The D.C. authorizers
used their staff and financial resources to oversee school closings as
well as handle closing logistics, such as inventorying assets and
communicating with parents. Both D.C. authorizers reported managing and
safeguarding student records was the most expensive and challenging aspect
of closing schools. The D.C. authorizers reviewed student records for
completeness, collected records from closing schools, distributed records
to new schools, and, in instances where students were no longer continuing
their education, stored student records. Although D.C. law requires that
student records become the property of D.C. Public Schools when a charter
school closes, D.C. Public Schools officials were unaware of this
responsibility. While both D.C. authorizers provided various types of
assistance when schools closed, the procedures following a charter school
closure varied in all nine instances. Neither D.C. authorizer has followed
the same closure process, and both have closed each school differently.
To improve D.C. charter schools oversight, we recommend that the BOE
Office of Charter Schools implement a risk-based oversight system that
targets monitoring resources to new charter schools and those identified
at risk. Additionally, we recommend that the BOE create a routine and
timely process to review the monitoring information collected by its
Office of Charter Schools. We also recommend that the BOE Office of
Charter Schools, the PCSB, and D.C. Public Schools establish a routine
process to use once schools are closed, including, among other things, a
system for the secure transfer and maintenance of student records.
In comments on a draft of this report, the BOE Office of Charter Schools
Executive Director noted that the BOE was taking actions that would
address the recommendations in this report. The PCSB Executive Director
also provided comments on a draft of this report. These comments supported
our recommendation that the BOE Office of Charter Schools, the PCSB, and
D.C. Public Schools establish a routine process for the secure transfer
and maintenance of records when schools close.
Background
Charter schools are public schools established under contracts that grant
them greater levels of autonomy from certain state and local laws and
regulations in exchange for agreeing to meet certain student performance
goals. Charter schools are often exempt from certain state and school
district education laws and in some states may receive waivers or
exemptions from other laws; however, charter schools must comply with
select laws, including those pertaining to special education, civil
rights, and health and safety conditions. While charter schools are free
from many educational regulations, they are accountable for their
educational and financial performance, including the testing requirements
under the No Child Left Behind Act.
A wide range of individuals or groups, including parents, educators,
nonprofit organizations and universities, may apply to create a charter
school. Charter schools are typically nonprofit organizations and, like
other nonprofits, are governed by a board of trustees. The board of
trustees, which is initially selected by the school founders, oversees
legal compliance, financial management, contracts with external parties,
and other school policies. School trustees are also responsible for
identifying existing and potential risks facing the charter school and
taking steps to reduce or eliminate these risks.
Charters to operate a school are authorized by various bodies, depending
on the state's laws, but may include local school districts, municipal
governments, or special chartering boards. According to a GAO survey,
about half of the charter school states and the District of Columbia
allowed more than one authorizer, providing charter school founders an
opportunity to find support for a wider range of instructional approaches
or educational philosophies than might be possible with a single
authorizer.1 Many charter school authorizing bodies have formal procedures
to monitor charter school performance in areas such as student
performance, compliance with regulations, financial record keeping, and
the provision of special education services. If charter schools do not
meet expected performance measures, authorizers may revoke a school's
charter or decide not to renew the charter when it expires, resulting in
the charter school's closure. Since the first charter school opened in
Minnesota in 1992, about 350 charter schools-of the approximately 3,700
that opened-have closed as of April 2005.
1See Charter Schools: To Enhance Education's Monitoring and Research, More
Charter School-Level Data Are Needed, GAO-05-5 (Washington, D.C.: Jan. 12,
2005). This report presented the results of a survey that asked states to
report the number and type of authorizers allowed in school year
2002-2003, among other information.
The D.C. School Reform Act, a federal law that applies only to D.C.,
designated two charter school authorizers-the D.C. Board of Education
(BOE) and the D.C. Public Charter School Board (PCSB). Both authorizers
have similar responsibilities, but are structured differently. While the
PCSB was created as an independent board with the sole purpose of
approving and overseeing charter schools, the BOE oversees both the 167
traditional public schools that enrolled about 59,000 students in the
2004-2005 school year and charter schools. To effectively manage its
oversight responsibilities for both traditional public schools and charter
schools, the BOE created an internal Office of Charter Schools to manage
its functions as an authorizer. In fiscal years 2003 and 2004, the BOE
generally determined how much local funding to allocate to each of the
Board's functions, including charter schools, while Congress determined
the level of PCSB's local funds through its D.C. Appropriations Act. In
addition to the two authorizers, several D.C. offices have
responsibilities related to the District's charter schools, including the
D.C. Inspector General, the D.C. Auditor, the D.C. Chief Financial
Officer, the Mayor's State Education Office, and the State Education
Agency, which is part of the D.C. Public School system (see fig. 1).
Figure 1: D.C. Offices with Responsibilities to Charter Schools
The D.C. School Reform Act allows the BOE and the PCSB to grant up to 10
charters each per year. Each charter authorizes a school for 15 years, at
which point the charter may be renewed if the authorizer approves. To
date, no school has reached the end of its 15-year term. After granting
charters to schools, each authorizer is responsible for monitoring those
schools. Under the D.C. School Reform Act, the BOE and PCSB are required
to monitor charter schools' academic achievement, operations, and
compliance with applicable laws. Both authorizers conduct pre-opening
visits to new schools and subsequently conduct annual monitoring visits
and data reviews to meet this requirement (see fig. 2). All schools
granted a charter in D.C. must create an accountability plan that outlines
the school's 5-year academic goals. Accountability plans become part of
each school's charter and are used as guides for the authorizers to
monitor academic progress. Additionally, under the D.C. School Reform Act,
the D.C. authorizers must conduct more comprehensive reviews of charter
schools every 5 years to determine if the schools should be allowed to
continue operating. Charter schools that are not meeting academic
performance goals may be closed following a 5-year review. Charter schools
may be closed for other reasons, such as financial mismanagement or legal
noncompliance, at any time.
Figure 2: Overview of D.C. Authorizers' Monitoring Process
As we noted in our May 2005 report, the BOE first began chartering schools
in 1996, and the PCSB chartered its first schools in 1997.2 As of the
2004-05 school year, 23 BOE and 27 PCSB charter schools had opened.3
However, between 1998 and September 2005, nine charter schools closed. The
BOE has revoked seven charters, and two PCSB charter schools closed; one
voluntarily released its charter, and the other had its charter revoked at
the end of the 2004-2005 school year. Financial reasons contributed to the
closing of most of the schools that had their charters revoked. During the
2004-05 school year, 16 BOE schools and 26 PCSB were in operation. As of
January 2005, BOE charter schools enrolled 3,945 students, and PCSB
charter schools enrolled 11,555 students.
The two D.C. authorizers monitored a diverse set of schools (see table 1).
These schools enrolled students at all grade levels, from pre-kindergarten
to high school and offered varied instructional and academic models. For
example some schools had a particular curricular emphasis, such as math
and science, art, or foreign language, while other charter schools focused
on specific populations, such as students with learning disabilities,
students who have dropped out or are at risk of doing so, youth who have
been involved in the criminal justice system, and adults. Additionally,
the charter schools pursued a variety of school-specific goals that were
aligned with their missions or the student populations they served. The
D.C. School Reform Act requires the authorizers to monitor schools' annual
and 5-year progress toward these goals. Some examples of goals included in
school charters are improved attendance rates and increased parental
satisfaction. Other goals varied widely. For example, Maya Angelou, a high
school serving at-risk youth, included among its 5-year goals both an 85
percent graduation rate, as well as a significant reduction in violent
behavior by students. JOS-ARZ, a high school serving students with
emotional and behavioral problems, included as a goal that at least half
of its students would acquire skills that would allow them to function
independently and would earn a high school diploma or the equivalent.
2For more information on GAO work concerning charter schools and D.C.
public schools, please see related GAO products at the end of this report.
3Eleven additional charter schools opened during the 2005-2006 school
year.
Table 1: Characteristics of D.C. Charter Schools, School Year 2005-2006
School mission,
Year curriculum,a or target
School opened Grade levelb Enrollmentc population
BOE schools
Barbara Jordan 2002 5-8 204 Critical thinking,
character, and leadership
education
Booker T. 1999 9-12 and 229 Career-focused school
Washington adult with emphasis on building
trades
City Lights 2005 9-12 65d Students with special
needs
Children's 1997 preschool-6 111 Arts focus
Studio
Community 1998 preschool-8 944 Community-centered
Academy learning model
Elsie Whitlow 1998 K-6 Bilingual education
Stokes
Community
Freedom
Hyde Leadership 1999 K-12 735 College preparatory,
Academy character education, and
service learning
Integrated 1998 7-12 367 Career-focused school;
Design & junior ROTC program
Electronics
Academy
Ideal Academy 1999 preschool-8 260 Math, science, and
technology focused
program
JOS-ARZ 2000 9-12 49 Residential school for
Therapeutic students with emotional
or behavioral disorders
Kamit Institute 2001 9-12 144 Cultural-based education
for Magnificent with an emphasis on
Achievers Africa
Latin American 2003 preschool 59 Bilingual education
Montessori -preK
Bilingual
Mary McLeod 2004 preK-4 92 Features foreign
Bethune languages and the arts
Next Step 1998 ungraded;age 75 Dropout prevention or
16 and older remediation
Options 1996 5-8 215 Alternative learning
environment for
underachieving students
using project-based
approach
Roots 1999 preK-8 109 Instructional emphasis on
African heritage and
culture
Washington 2005 K-6 340d Focuses on academics and
Academy technology
Young America 2004 9-10 102 Vocational/technical
Works career-based school
PCSB schools
Academia 2005 6-7 150d Bilingual education
Bilingue de la
Comunidad
Academy for 2005 K-6 100d Arts focus
Learning
Through the
Arts
Appletree Early 2005 preschool- 36d Focus on literacy skills
Learning preK
Arts and 1999 preK-6 617 Arts and humanities
Technology education, technology
Academy education
Bridges 2005 preschool- 72d Individualized education
preK for children with and
without special needs
Capital City 2000 preK-8 236 Project-based curriculum
Carlos Rosario 1998 10-adult 1059 Adult education
International
Cesar Chavez 1998 6-12 469 Public policy focus
PCHS for Public
Policy
D.C. Bilingual 2004 preschool-1 115 Bilingual education
D.C. 2003 4-7 153 College preparatory
Preparatory
Academy
Eagle Academy 2003 preschool- 130 Individual focus, active
preK learning model
Early Childhood 2005 preschool- 116d Literacy, numeracy, and
Academy preK cognitive and social
skills emphasized
E. L. Haynes 2004 preschool-3 138 Math and science focus
Friendship 1998 preK-12 3071e Curriculum that
emphasizes basic learning
using technology
Hope Community 2005 preK-5 150d Broad-based cultural
knowledge and character
education
Howard Road 2001 preK-7 571 Arts and humanities
Academy education
Howard 2005 6 120d Math and science focus
University
Middle School
of Mathematics
& Science
KIPP D.C. 2001 5-8 317f College preparatory with
extended day and year
Marriott 1999 9-12 146 College-preparatory
Hospitality school with emphasis on
hospitality industry
Maya Angelou 1998 9-12 176 Adjudicated and at-risk
youth
Meridian 1999 preK-8 583 Features frequent testing
and student portfolios
Paul 2000 6-9 573 Converted public school
focused on general
academic skills and
character education
Potomac 2005 preK-3 168d Arts focus
Lighthouse
New School for 2000 9-12 437 Career-focused school
Enterprise & featuring business
Development information, technology
and the arts
Sasha Bruce 2001 7-11 278 Project-based curriculum
School for Arts 1998 K-9 118 Arts focus for students
in Learning with learning
disabilities
School for 1998 7-12 320 Boarding school
Educational
Evolution and
Development
Thurgood 2001 9-12 224 Law-related focus
Marshall
Academy
Tree of Life 2000 preK-8 222 Emphasizes literacy
Community skills for students
performing below grade
level
Tri-Community 2002 preK-5 216 Focus on literacy skills
Two Rivers 2004 preK-4 151 Project-based curriculum
Washington 1998 9-12 342 Math and science focus;
Mathematics, ROTC program
Science &
Technology
William E. 2004 preK-6 153 Performing arts focus
Doar, Jr.
YouthBuild 2005 ages 16-24 55d Career-focused school
emphasizing vocational
training, employability
skill-building, and
community service
Source: GAO analysis of D.C. charter school documents.
aAn individual school's curriculum may combine elements from various
sources; for the schools shown, the table highlights one or more aspects
of the curriculum.
bReflects grade levels that were actually being served in September 2005.
Individual schools' charters may allow schools to gradually add grades
over time.
cReflects actual enrollment as of January 2005. Individual schools'
charters may allow schools to increase enrollment over time up to a
specific limit or ceiling.
dFigure represents projected enrollment. School opened in September 2005.
eFigure does not include the Friendship Southeast Campus, which opened
under the same charter in fall 2005 with a projected enrollment of about
350.
fFigure does not reflect school expansion in fall 2005, which was
projected to add 80 new students to the number already enrolled.
D.C. charter schools receive funding from a wide range of sources. Charter
schools in D.C. receive funding on a per-pupil basis using the same
allocation formula for operating expenses that is applied to traditional
D.C. public schools. In the 2004-2005 school year, charter and traditional
public schools in D.C. received $6,904 to $8,077 for a regular education
student depending on grade level. D.C. charter schools received an
additional allotment-equal to $2,380 per non-residential student and
$6,426 per residential student-to help cover the cost of school
facilities.4 In addition to the per-pupil allotments, charter schools in
D.C., like all public schools that meet federal criteria, are eligible for
other federal funds, such as funding under the No Child Left Behind Act
and the Individuals with Disabilities Education Improvement Act.5 A few
charter schools also receive additional funding from foundation grants and
other fundraising efforts.
4Unlike traditional public schools, charter schools are responsible for
identifying and securing appropriate spaces in which to operate. D.C.
charter schools are responsible for maintaining their facilities. However,
upon mutual agreement, D.C. Public Schools may provide some facilities
maintenance services to charter schools and bear some of the costs of such
services.
D.C. Authorizing Boards Differed in Revenue and Their Use of D.C. Government
Services, but Spent Their Financial Resources on Similar Oversight Activities
The two D.C. authorizers' revenue, staff, and use of available D.C.
services differed, but the authorizers spent their funds on similar
activities. The BOE Office of Charter Schools had less revenue and fewer
schools and staff to oversee them than the PCSB. To help fulfill its
oversight responsibilities, the BOE Office of Charter Schools occasionally
called upon D.C. agencies for financial operations reviews and used some
D.C. Public School services. The PCSB, which had more staff and oversaw
more schools, had total revenue that was more than twice that of the BOE
Office of Charter Schools' and employed a larger staff. The PCSB also
received more revenue per school than the BOE Office of Charter Schools.
Unlike the BOE Office of Charter Schools, the PCSB did not use D.C. Public
Schools services, which were available to it, but did use D.C. government
services on one occasion. Despite these differences, both authorizers used
their financial resources similarly. Both spent most of their fiscal year
2004 funds on board operations, including personnel costs, and their
remaining funds on consultants to help with monitoring, application review
and school closures.
BOE Office of Charter Schools Received Less Funding and Had Fewer Staff to
Oversee Fewer Schools Than PCSB, but Used More Available Government Services
The BOE Office of Charter Schools received less funding from its two main
sources of revenue-the local funds allocated to it by the BOE and the
administrative fees it was permitted to charge the schools it oversaw-than
the corresponding amounts received by the PCSB (see table 2). The BOE
Office of Charter Schools received $307,340 from the BOE in fiscal year
2004, less than half the amount of local funds the PCSB received in
accordance with congressional directives, and collected $251,623 in fees
from the schools it oversaw. The BOE Office of Charter Schools collected
less in fees from schools than the PCSB, because these fees are based on
the number of students per school, and the PCSB oversaw more schools with
more students. In total revenue, the BOE Office of Charter Schools
received approximately $38,000 per school in fiscal year 2004.6
5The nation's primary special education law, the Individuals with
Disabilities Education Act (IDEA), was reauthorized in 2004 under this new
name.
In fiscal years 2003 and 2004, the BOE Office of Charter Schools had three
staff, including its Executive Director, to oversee its schools, which was
less than a third the staff of the PCSB's. In October 2005, the new budget
for the BOE made possible the hiring of three new staff for its Office of
Charter Schools. The BOE Office of Charter Schools supplemented its staff
by using consultants to help oversee charter schools. In fiscal year 2004,
the Office of Charter Schools spent $121,502 on consultants in areas such
as reviewing applications, conducting annual monitoring visits, and
assisting with school closings. Consultants with issue area expertise also
provided specialized assistance associated with monitoring schools'
financial condition and special education compliance. The BOE Office of
Charter Schools spent $28,589 per school on both in-house personnel and
consultants in fiscal year 2004, which was 16 percent less than the PCSB
spent.
6We focused our analysis on per school revenue because the authorizers'
services were not targeted to individual students and instead generally
benefited entire schools. For example, the authorizers monitored schools'
financial condition, academic programs, compliance with laws, and
governance structures, which were generally school-and not student-based.
However, some aspects of monitoring, such as student record review, may
have been affected by the number of students enrolled, and the PCSB did
have a higher total and median school enrollment.
Table 2: Authorizer Revenue, Fiscal Years 2004 and 2003
BOE Office of Charter Schools
(unaudited)a PCSB (audited)b
FY 2004 FY 2003 FY 2004 FY 2003
Carryover from prior
year 11,773 0 106,408 275,661
Revenue
Local funds $307,340 $300,000 $660,000 $589,000
Fees from schools 251,623 127,800 527,403 382,819
Grantsc 0 0 43,961d 30,680
Miscellaneouse 0 0 12,144 9,333
Total $570,736 $427,800 $1,349,916 $1,287,493
Source: GAO analysis of data submitted by BOE Office of Charter Schools
and PCSB.
aThe D.C. School Reform Act does not require the BOE Office of Charter
Schools to obtain an annual financial statement audit.
bThe D.C. School Reform Act requires the PCSB to obtain an annual
financial statement audit.
cGrants reflects revenue received from foundations and other sources.
dThis figure does not include $147,405, which the PCSB received as the
initial installment of a $1.7 million federal grant to support both the
PCSB's and the BOE Office of Charter Schools' efforts to oversee their
charter schools' compliance with the No Child Left Behind Act. We did not
include this amount because, by mutual agreement, the PCSB has managed the
grant, which will benefit both authorizers and their schools.
eMiscellaneous includes revenue from areas such as reimbursed parking fees
and interest income.
In addition to using consultants, the BOE Office of Charter Schools
augmented its financial and staff resources by leveraging services
provided by other D.C. government agencies.7 On four occasions, the BOE
Office of Charter Schools referred schools to the D.C. Auditor or the
Office of the Chief Financial Officer for financial operations reviews.
For example, in 2002, the BOE Office of Charter Schools asked the Office
of the Chief Financial Officer to review the internal controls of one
school. Additionally, the BOE Office of Charter Schools referred one
school to a special interagency team that included the D.C. Department of
Mental Health and the D.C. Child and Family Services Agency, to review the
level of services provided to children. For the past 2 years, D.C. Public
Schools has provided the BOE Office of Charter Schools with some test
score analysis and school performance data, which the office used to
determine if its charter schools were in compliance with No Child Left
Behind Act requirements.
7No cost estimate has been computed for the services that the BOE Office
of Charter Schools received from outside entities, because the Office does
not assign a value to these services.
Figure 3: Authorizer Staffing Levels and Schools Overseen, School Year
2004-2005
Note: This figure represents data as of January 2005, which corresponds to
fiscal year 2005. Our budget analysis was based on fiscal year 2004 data,
as these were the most recent data available. During fiscal year 2004, the
BOE Office of Charter Schools had 3 staff, 15 schools, and a total
enrollment of 3,646, while the PCSB had 9 staff, 22 schools, and a total
enrollment of 10,097.
PCSB Received More Funding and Had More Staff to Oversee Schools, and Used Fewer
Available Government Services
In fiscal years 2003 and 2004, the PCSB received more revenue, had a
larger staff and oversaw more schools than the BOE Office of Charter
Schools. As an agency independent from the D.C. Board of Education, the
PCSB received $660,000 in local funds in fiscal year 2004, as required by
Congress. Additionally, the PCSB collected over $500,000 in fees from
schools that year and in total received $61,360 per school. The PCSB used
its revenue, which was more than double that of the BOE Office of Charter
Schools, in part to employ nine people to oversee 22 charter schools in
fiscal year 2004. The PCSB also had other revenue sources that the BOE
Office of Charter Schools did not, such as grants and interest income.
Like the BOE Office of Charter Schools, the PCSB supplemented its staff by
using consultants. In fiscal year 2004, the PCSB spent $134,756 on
consultants to help with charter school oversight, such as reviewing
applications, conducting annual monitoring visits, and assisting with
school closings. PCSB consultants also reviewed schools' financial
conditions and special education compliance. The PCSB spent more than its
counterpart-$33,897 per school-on both in-house personnel and consultants.
The PCSB used fewer services available to the authorizers from D.C.
government agencies than the BOE Office of Charter Schools. Unlike the BOE
Office of Charter Schools, the PCSB did not use D.C. Public Schools test
score analysis to determine if its schools were meeting No Child Left
Behind Act standards. However, in April 2005, upon the recommendation of
its financial consultants, the PCSB referred one school to the D.C.
Inspector General for investigation of certain questionable financial
practices.8 Although the PCSB could refer more cases to D.C. agencies, a
PCSB official stated that the PCSB instead tries to resolve all school
issues by itself in order to help maintain the organization's independence
as an authorizing board.
Both Authorizers Spent Their Financial Resources to Support Oversight Activities
Although the two authorizers differed in terms of revenue available to
them, they both used their financial resources to support oversight
activities. Both authorizers used their staff and consultants to perform
functions such as reviewing applications, monitoring schools, and
overseeing school closures, although the costs associated with in-house
staff were not separately tracked by the authorizers. For both
authorizers, the majority of their expenses were used to support salaries
and benefits for authorizer personnel involved in these activities, and
other operational costs, such as conferences and technology. In fiscal
year 2004, about three-quarters of the BOE Office of Charter Schools'
expenses, and 88 percent of the PCSB's expenses were used in this way (see
fig. 4). However, a smaller percentage of the PCSB's expenses were used on
personnel and a larger percentage on other operational costs, such as
technology, conferences, and books. The PCSB also had to pay for office
space, an expense that the BOE Office of Charter Schools did not have to
incur as its offices were provided by the BOE.
8We were unable to determine the value of this referral, because
information from fiscal year 2005 had not been calculated when we were
conducting our audit work for this report.
Figure 4: BOE Office of Charter Schools and PCSB Expenses, Fiscal Year
2004
aBoth authorizers stated that personnel spent most of their time on
activities related to application review, monitoring, and school closings;
however, the authorizers were unable to provide personnel expense
information for these activities because staff time was not recorded in
this manner.
The BOE Office of Charter Schools used a larger percentage of its total
expenses for consultants than the PCSB. Consultant fees represented
one-quarter of the BOE Office of Charter Schools' total expenses and
one-eighth of the PCSB's in fiscal year 2004. Both used consultants
primarily to monitor schools, but both also hired consultants to review
applications and help with school closings. For example, both the BOE and
PCSB hired consultants to conduct site visits and review schools' academic
programs. Expenses for both authorizers in fiscal year 2003 were similar
to 2004 expenses, as both authorizers used most of their expenses for
personnel and other operational costs. See table 3 for detailed expense
information for both authorizers.
Table 3: Authorizers' Expenses, Fiscal Years 2004 and 2003
BOE Office of Charter Schools
(unaudited)a PCSB (audited)b
FY 2004 FY 2003 FY 2004c FY 2003
In-house expenses
Personnel $307,337 $294,859 $610,981 $472,426
Facilities 0 0 78,416 74,160
Other operational
costsd 30,857 22,845 309,441 192,010
Subtotal 338,194 317,704 998,838 738,596
Consultant expenses
Applications 4,000 11,700 15,312 8,248
Monitoring 109,318 78,400 111,839 152,017
School closings 8,184 3,083 7,605 8,755
Subtotal 121,502 93,183 134,756 169,020
Total $459,696 $410,887 $1,133,594 $907,616
Source: GAO analysis of data provided by the BOE Office of Charter Schools
and PCSB.
aThe D.C. School Reform Act does not require the BOE Office of Charter
Schools to obtain an annual financial statement audit.
bThe D.C. School Reform Act requires the PCSB to obtain an annual
financial statement audit.
cPCSB FY 2004 expenses do not include $142,045, which the PCSB spent as
part of a $1.7 million federal grant to support both the PCSB's and the
BOE Office of Charter Schools' efforts to oversee their charter schools'
compliance with the No Child Left Behind Act. We did not include this
amount because, by mutual agreement, the PCSB has managed the grant, which
will benefit both authorizers and their schools.
dOther operational costs includes expenses for items such as technology,
books, and conferences.
Both Authorizers Provided Technical Assistance and Collected Academic,
Financial, and Other School Data, but Extent and Level of Oversight Differed
Both D.C. authorizers provided schools technical assistance and oversight
of charter schools by tracking schools' academic achievement and financial
condition. Both authorizers provided charter schools with assistance and
had similar oversight practices, such as visiting each school at least
once annually to assess performance and school operations. However, their
approaches to oversight differed. The BOE Office of Charter Schools,
staffed with only three employees, provided the same level of oversight to
all of its 16 schools and in doing so limited its ability to provide
additional assistance to those schools needing more help. Moreover, the
BOE, which was also responsible for 167 traditional public schools, did
not regularly review information collected by its Office of Charter
Schools. BOE board members we interviewed acknowledged that problems were
sometimes allowed to go unresolved for too long. By contrast, the PCSB
targeted additional oversight on new charter schools and those where
problems had been identified.
Both Authorizers Provided Schools with Technical Assistance
Both authorizers provided charter schools technical assistance in several
areas. They often integrated technical assistance and monitoring to help
schools improve academic and financial programs, identify potential
facilities, and apply for facility funding. For example, the BOE Office of
Charter Schools helped a school improve its financial condition after its
2003 audit raised questions about the school's financial viability.
Specifically, its staff helped the school end a disadvantageous
relationship with a school management company and negotiate a lower rent
and security deposit for new school facilities. In another case, the BOE
Office of Charter Schools obtained a financial operations review from the
D.C. Chief Financial Officer in 2003 and a multi-agency school review in
2004 to help a school that was identified as having enrollment and funding
problems. The PCSB also integrated technical assistance and monitoring.
For example, the PCSB referred a school to several local organizations for
help, after the PCSB's 2005 review concluded that the school needed to
improve teacher professional development. PCSB has also established a
governance project to develop pools of candidates for schools' boards of
trustees, created a financial policy manual for charter schools, and
provided guidance to help schools address transitional issues as the
schools increase enrollment and add grade levels. To help schools address
academic deficiencies identified through monitoring, both authorizers have
helped schools develop their academic accountability plans.
The BOE Office of Charter Schools and PCSB also helped schools develop
school improvement plans to meet No Child Left Behind Act requirements.
For example, BOE Office of Charter Schools officials told us that they
worked with one school to help it create an academic improvement plan and
get relevant training for school leadership after the school did not make
Adequate Yearly Progress in reading and math under the No Child Left
Behind Act in 2005. They also said that they worked with the seven schools
identified as needing improvement as a result of not achieving Adequate
Yearly Progress in the 2004-2005 school year by identifying actions each
school must take to comply with the law, such as developing school
improvement plans outlining corrective strategies and offering services
such as tutoring. The BOE Office of Charter Schools plans to use its
annual monitoring visits to track these schools' progress. For the 13 PCSB
schools identified in 2004-2005 as needing improvement as a result of not
making Adequate Yearly Progress, the PCSB closed one and has made plans to
track schools' improvement efforts through its annual monitoring visits.
For example, it has incorporated key questions into its visit protocols in
order to measure schools' progress.
BOE Collected Data Uniformly from Schools, but Did Not Always Use Information to
Address Problems
The BOE Office of Charter Schools provided oversight to charter schools by
using a uniform process to collect academic and financial data from all
its schools, as well as other information about schools' governance
structure and compliance with laws. Specifically, it required each school
to submit the same information, such as monthly financial statements,
annual student test scores, and teacher information. It also visited each
school at least twice a year-once before the school year began to check
the school's facilities and operational systems and again during the
school year to monitor school performance. At the beginning of the school
year, the BOE Office of Charter Schools focused on compliance and
governance issues, by checking areas such as school board membership,
student record storage, and adequacy of school facilities. In subsequent
visits during the school year, the BOE Office of Charter Schools monitored
mainly performance information, such as tracking schools' progress in
achieving their own academic goals and reviewing school budgets and annual
audits.9
9As a result of a joint effort by the D.C. Chief Financial Officer, the
BOE Office of Charter Schools, and the PCSB, D.C. charter schools were
required to select an auditor from an approved list of best-qualified
auditors beginning in fiscal year 2005. Until recently, no such
requirements existed, and according to BOE Office of Charter Schools and
PCSB officials, some schools have on occasion selected auditors who did
not prepare audits that met professional audit standards.
Although the BOE Office of Charter Schools' monitoring approach has
enabled it to compile comprehensive data on every school, this approach
has limited its ability to focus attention on those schools most in need
of the monitoring: new schools and schools considered to be at risk.
Because the office has collected the same data from all schools regardless
of their years of operation or performance history, the small staff has
had to spend considerable time sifting through considerable amounts of
data on all schools, while problems at some schools go unaddressed. For
example, by visiting all schools at the beginning of every school
year-rather than only visiting new schools or schools in new locations-the
BOE Office of Charter Schools has dedicated staff resources that could
have been focused on higher risk schools. Moreover, according to a BOE
Office of Charter Schools official, in the past collecting and reviewing
monthly financial statements from all of its schools had been nearly a
full-time responsibility. Furthermore, while the BOE Office of Charter
Schools has relied on the schools' annual financial statement audits for
key information related to financial oversight, it has not developed a
system to assign priority to schools whose audits documented ongoing
problems. For example, one school's 2002 audit identified weaknesses that
made the school vulnerable to an embezzlement.10 Although this particular
weakness was corrected, the 2003 audit showed additional evidence of weak
internal controls. When we asked BOE Office of Charter Schools officials
whether it was possible to focus oversight on schools like this one, they
told us that their practice was to review all schools during the annual
monitoring visit to determine whether the issues have been resolved and
require a corrective action plan if they have not. Additionally, the BOE
Office of Charter Schools generally has not reviewed schools' annual
financial statement audits when they were submitted to the office, and
instead waited until after the authorizers' financial monitors completed
their reviews of the schools. This approach may not allow the BOE Office
of Charter Schools to respond in a timely manner to schools with immediate
problems and may have contributed to the number of BOE charter schools
that closed for financial reasons.
10The school's fiscal year 2002 audit found insufficient documentation of
expenses and inadequate internal controls related to check writing
policies. The following year, the BOE Office of Charter Schools' financial
monitor identified additional weak internal controls, such as improper
authorization of cash transfers between bank accounts and untimely
reconciliation of bank statements, and reported an embezzlement of
$53,000. BOE Charter School officials told us that the employee involved
was fired and prosecuted.
Even after BOE Office of Charter Schools staff identified problems,
resolution was sometimes prolonged. For example, two Board members we
interviewed said that timely action was not taken with regard to the
Village Learning Center that eventually closed in 2004. According to the
BOE Office of Charter Schools' own monitoring reports, this school
experienced numerous problems over a period of years, including
noncompliance with special education requirements, and failure to pay
federal taxes and submit required federal grant performance reports. This
school was open for 6 years and was granted three probationary periods
totaling 180 days. Of the seven BOE schools whose charters were revoked,
four with long-standing problems were allowed to remain open 4 years or
more. In two of these cases, the BOE allowed the schools to stay open to
give them time to correct their deficiencies.11 According to two BOE Board
members we interviewed, the Board did not regularly review information
collected by the BOE Office of Charter Schools and has not always acted
upon information it received. They also stated that the BOE has not
provided adequate oversight of its charter schools; as one Board member
explained, it is easy to think of charter school oversight as a secondary
concern to overseeing the public school system as a whole. Furthermore,
during our review of the BOE Office of Charter Schools, the BOE had not
held regular meetings devoted to charter schools and did not have a
committee dedicated to charter school oversight. In October 2005, the BOE
approved the creation of a charter school committee. Additionally, our
review of BOE minutes showed that charter schools were infrequently
discussed at BOE's meetings.12 According to the BOE Office of Charter
Schools Director, BOE Board members devoted some working sessions to
charter school oversight issues; however, no minutes were taken of these
meetings.
PCSB Used Data to Target Additional Monitoring Efforts to Schools Most in Need
The PCSB also monitored schools' financial condition and academic
performance but targeted additional monitoring on schools that needed more
oversight. To monitor schools' financial performance, the PCSB collected
and reviewed school budgets, monthly financial statements, and annual
financial statement audits. To monitor academics, the PCSB visited schools
annually and collected and analyzed test scores and other data to track
schools' outcomes as measured against their own academic goals and D.C.
performance standards. Additionally, the PCSB created an annual compliance
review process to track compliance with the No Child Left Behind Act,
special education requirements, provisions of the D.C. School Reform Act
and other laws. When schools have been identified as being out of
compliance, the PCSB has used this process to identify specific actions
each school must take to comply with the law, such as developing school
improvement plans, offering services such as tutoring, and notifying
parents. The PCSB has also monitored issues related to the schools'
governance, such as the composition and operation of school boards of
trustees, through its annual review of schools' compliance with applicable
laws and regulations.
11The remaining two schools filed lawsuits to appeal the revocation, and
the BOE Office of Charter Schools Director believed that these lawsuits
probably accounted for the additional time the schools were allowed to
remain open.
12We reviewed Board minutes from meetings held between January 2003 and
April 2005 and identified only 12 references to the four BOE charter
schools we had selected for review. These 12 references involved only two
of those four schools.
To ensure that new schools or schools identified as at risk receive
sufficient oversight, the PCSB has targeted monitoring to ensure that
higher-risk schools receive more attention, while lower-risk entities that
were operating smoothly received less scrutiny. For example, at the
beginning of the school year, the PCSB conducted pre-opening assessments
of only new schools and schools opening in new facilities, thereby freeing
up staff resources for higher risk schools. The PCSB also provided
additional oversight to new schools by conducting a special financial
management review of the internal controls of schools in their first year
of operation.13 According to the PCSB, the purpose of this early review
was both to assess school compliance and help the schools address issues
early in their implementation. Additionally, the PCSB required schools in
their first year to prepare a self-study, providing another opportunity
for the school to identify challenges that require attention.
The PCSB also applied targeted monitoring to its financial reviews.
Schools with demonstrated financial performance have been allowed by the
PCSB to submit their financial statements on a quarterly-rather than
monthly-basis. The PCSB required schools to return to monthly submissions
of financial statements when financial concerns emerged. For example, in
October 2004, the PCSB required one school to resume monthly reporting
after it failed to submit a financial statement audit that was due in
November 2003. Additionally, the PCSB has conducted interim financial
reviews of schools where financial problems have been detected through
regular monitoring. After identifying a potential budgetary shortfall at
one school, the PCSB conducted an interim financial review of the school
to assess its financial condition. According to a PCSB official, this
review provided the PCSB with the opportunity to make recommendations to
the school to reduce its expenses, which helped restore the school's
financial condition.
13Financial management reviews were not completed for new schools in
fiscal year 2005 because the PCSB was reviewing its first year monitoring
procedures, according to a PCSB official.
The PCSB also modified its annual and 5-year review processes to highlight
or prioritize schools considered at risk. For example, PCSB's annual
program review, which has focused on academic performance, labeled some
trouble areas as "mission-critical problems," signaling to the school that
inadequate improvement in these areas could threaten the school's
viability. In one case, the PCSB highlighted a school leader's extended
absences as a mission-critical problem that needed to be addressed.
Following the PCSB's monitoring report, the school leader resigned, and
the school hired a new principal. Furthermore, the PCSB has applied
criteria to schools during their 5th year of operation to determine
whether each school has met the majority of its academic and nonacademic
goals.14 Any school that has not met both its academic and nonacademic
goals can be placed on PCSB's "Priority Review List." In May 2004, the
PCSB placed one such school on this list-the SouthEast Academy for
Academic Excellence-and subsequently revoked its charter. One PCSB
official stated that the rationale for using a targeted monitoring
approach is to free up more resources for technical assistance.
Although some of its schools have experienced problems, the PCSB's
targeted monitoring approach allowed it to identify and provide technical
assistance to schools in need of attention, which helped PCSB schools
focus on their deficiencies. For example, the PCSB's monitoring reports
highlighted one school's need for retaining qualified special education
staff as a "mission-critical" problem for 3 consecutive years. In
response, the PCSB targeted additional monitoring on this school and
worked with the school to develop plans for hiring and training teachers
to mitigate the school's special education skills shortfall. The PCSB's
targeted monitoring approach also highlighted problems at both of the
PCSB's schools that later closed. For example, PCSB monitoring reports
show that the authorizer identified problems, such as noncompliance with
special education requirements, noncompliance with its charter, and late
financial statement audits, at Associates for Renewal in Education Public
Charter School, in the school's second year of operation. The PCSB also
identified problems at SouthEast Academy, including the school's inability
to implement its own academic improvement plans. In both cases, the PCSB
responded by intensifying monitoring and placing the schools on probation,
and in the case of SouthEast Academy, revoked the school's charter after
it failed to correct identified deficiencies.
14Nonacademic goals include area such as student attendance, faculty
professional development, and parental satisfaction.
Authorizers Undertook a Wide Range of Activities When Schools Closed, but the
Process Was Not Well Defined
When charter schools have closed, both authorizers undertook a wide range
of activities to ensure student records and public assets were
safeguarded, parents informed of their children's school options, and
closing schools received the assistance they needed; however, issues arose
during closings that both found difficult to readily address. Officials
from both authorizers stated that closing charter schools was costly,
particularly when the closed schools were financially insolvent, and
managing student records was the most challenging aspect of school
closures. The authorizers' processes for closing all nine schools varied
in every instance.
When Schools Closed, Authorizers Took Actions to Manage Student Records,
Safeguard Public Assets, and Inform Parents
Authorizers used their staff and financial resources to oversee school
closings as well as handle closing logistics, such as distributing student
records, inventorying assets, and communicating with parents. Authorizer
staff inventoried school property, returned assets bought with federal
dollars to the U.S. government, and disbursed remaining assets to other
non-profit organizations, including existing charter schools. For example,
when BOE Office of Charter Schools closed one of its schools, D.C. Public
School staff helped the office inventory and dispose of its property. In a
case when the closing school was financially insolvent, BOE Office of
Charter Schools staff referred its creditors to appropriate parties for
repayment. When one of PCSB's schools closed, it hired a contractor to
inventory the school's records. Additionally, both authorizers
communicated closing procedures to parents and students. BOE Office of
Charter Schools officials stated that when charter schools closed, they
sent letters to students and spoke with parents about the closure process.
When the PCSB closed SouthEast Academy in 2005, GAO staff observed a town
hall meeting where PCSB discussed the closure and students' options for
moving to another school. However, parents at the meeting still expressed
confusion about the closure process and their questions about whether the
closed school would reopen under new management could not be definitively
answered at that time.
Overseeing School Closures Was Sometimes Costly for Authorizers
Both the BOE and PCSB incurred costs when closing charter schools,
particularly for the five schools that were financially insolvent. For
example, a PCSB official stated that when PCSB closed the Associates for
Renewal in Education Public Charter School, the PCSB spent over $15,000
from its budget. The authorizers often had to hire additional temporary
staff to help with closing logistics. For example, in some instances, the
authorizers hired administrators from the closed schools to help transfer
records and dispose of inventory, such as textbooks, computers, and desks.
BOE Office of Charter School and PCSB staff stated that hiring these
school administrators helped make the closing process more efficient
because the administrators were knowledgeable of the schools' financial
and student record keeping systems, as well as the school staff, parents
and students. Four of the nine schools that were closed were financially
solvent. In these cases, the authorizers used school resources to help
defray the cost of closing. For example, the PCSB used the remaining
assets from one closed school to hire a records management company to help
collect, transfer, and store student records. Both authorizers also
devoted staff resources to school closings. Staff spent time inventorying
and dispersing assets, speaking with parents, and dealing with creditors
when schools closed.
Managing Student Records Was the Most Challenging Aspect of School Closings
Both authorizers reported managing and safeguarding student records was
the most challenging aspect of closing schools. Authorizers have assumed
responsibility for reviewing student records for completeness, collecting
records from closing schools, and distributing records to new schools. BOE
Office of Charter Schools officials stated that this process can be
delayed when student records were missing or were not complete. In some
instances, student records may be on teachers' desks or in classrooms
rather than in central files, according to BOE Office of Charter Schools
officials. Authorizer staff must then find and collect missing records.
Student records can also be missing information or contain incorrect data.
For example, BOE Office of Charter Schools officials told us that some
student records have not included information about the most recent school
quarter, while other records contained grade or class information that the
students have stated is not correct. BOE Office of Charter Schools
officials stated that updating and correcting these records can be
difficult as the administrators or teachers with the pertinent information
may no longer be available to provide assistance. PCSB officials also
cited problems with managing student records. For example, PCSB officials
stated that transferring records to new schools has been complicated when
parents and students were unsure which school they would attend in the
fall.
In instances where students were no longer continuing their education,
both authorizers had to find a place to store student records. Although
D.C. law requires that student records become the property of D.C. Public
Schools when a charter school closes, D.C. Public Schools officials stated
that they thought responsibility for charter school records belonged to
the authorizers. D.C. Public Schools officials nevertheless told the PCSB
in September 2005 that they would be able to transfer these records to the
D.C. Public Schools central administrative office once this office was
ready to receive them. According to PCSB officials, as of November 2005,
D.C. Public School officials have not notified them that they are ready to
receive these records and therefore the records remain at the PCSB office.
Similarly, BOE Office of Charter Schools staff told us that they also kept
the records of students who did not continue their education in their
office.
Authorizer staff expressed concerns that parents and students could have
difficulty locating these records, which they would need if they wished to
continue their education or join the military. For example, students-who
may have only had contact with school administrators, rather than
authorizer staff-might not know which authorizer was responsible for their
charter school or how to contact the authorizer when they need to obtain
records from a closed charter school.
Process for Closing Schools Often Varied with Each Closure
In all nine instances where schools had been closed, neither authorizer
has followed a consistent closure process, and each has dealt with issues
as they arose on a case-by- case basis. For example, the PCSB recently had
to deal with a new closure problem, when for the first time, a charter
school was closed that owned rather than leased its facility. PCSB
officials expressed concerns that the facility might not remain available
to D.C. charter schools, a particular concern as new charter schools have
often had difficulty finding adequate space and existing ones have had
difficulty acquiring space to expand. In this case, the PCSB established
guidance outlining a process by which a closed school could receive
petitions from existing charter schools to utilize its facility, and
subsequently approved the arrangement reached between schools. BOE Office
of Charter Schools and PCSB officials stated that they varied their school
closing process based partly on the size and type of school and its
financial condition at the time of closing, but such a varied process and
the reasons for it may not be evident to parents as they try to think
through what they need to do to transition their children to other
schools. For example, when the BOE has closed schools, its Office of
Charter Schools notified parents of the closure through letters and phone
calls, while PCSB officials also held a town hall meeting when it revoked
a charter. The handling of student records has varied across school
closings and could be confusing for parents. When PCSB closed Associates
for Renewal in Education Public Charter School, the PCSB hand delivered
student records or sent them by certified mail to the new schools. In a
few instances, students also collected their records from the PCSB office.
However, when SouthEast Academy had its charter revoked, the PCSB hired a
record management company to collect and transfer all records using the
funds from the closed school. PCSB staff and board members stated that
they are hoping to use the SouthEast Academy closure procedures as a model
for future school closings. While both authorizers have gained
considerable experience with respect to what is required when schools
close, neither has put in place a plan that would better guide school
closing that would make it more efficient and clear to parents.
Conclusions
With over a fifth of its students in charter schools, the District of
Columbia has made a significant investment in charter schools. To protect
this investment, the authorizers have a responsibility to provide timely
oversight that ensures that students' interests are served. However, the
two authorizers conducted their monitoring differently, with the PCSB
targeting its resources and the BOE Office of Charter Schools generally
providing the same level of oversight to all its schools regardless of
risk. While both approaches comply with the law's requirements for
authorizers, BOE can more effectively focus its resources where possible
to oversee charter schools, particularly given its limited staff. Without
such targeting, this authorizer may not be well positioned to ensure that
its schools receive the assistance they need when they are most at risk.
Additionally, the Board of Education did not have a routine structure or
process to ensure that its members regularly reviewed monitoring data for
the charter schools under its purview. As a result, the Board has not
always reviewed the information before it in time to react effectively and
in a timely manner. Although the Board has begun to address this issue by
taking steps to create a charter school committee, it is not yet clear
that this action will be sufficient to ensure that charter schools receive
appropriate attention.
Finally, when charter schools close, it is critical that a transparent
process exist to ensure that schools, parents, and students understand
their options. While each authorizer undertook a wide range of activities
when schools closed, no process existed to guide the authorizers, schools,
and students through the closing. Lacking such a process, school
administrators and parents may not understand what is required and
expected of them to ensure a smooth educational transition for students.
Additionally, the absence of such a process may result in student records
being misplaced or difficult for students to locate in the future,
particularly if they do not know which entity authorized their school.
Additionally, closing charter schools without a systematic approach may
not allow the authorizers to build on previous experience or learn from
each other. As a result, an opportunity may be lost to develop a uniform,
transparent, and efficient process that protects the interests of all
parties.
Recommendations for Executive Action
To ensure that D.C. charter schools authorized by the BOE receive
appropriate oversight, we recommend that the BOE Office of Charter Schools
implement a risk-based oversight system that targets additional monitoring
resources to new charter schools and those identified at risk.
Additionally, we recommend that the BOE create a routine and timely
process to review the monitoring information, including audit reports,
collected by its Office of Charter Schools. To help alleviate confusion
among parents, students and school administrators following the closure of
a charter school and to help the D.C. authorizers close schools
efficiently, we recommend that the BOE Office of Charter Schools, the PCSB
and D.C. Public Schools establish a routine process when schools close,
including, among other things, a system for the secure transfer and
maintenance of student records.
Agency Comments and Our Evaluation
We provided a draft of this report to the BOE Office of Charter Schools.
In her response, the Executive Director of the BOE Office of Charter
Schools noted that the BOE was taking actions that would address the
recommendations in this report. For example, in response to the first
recommendation, the Executive Director stated that the hiring of three new
staff members will help focus greater oversight on schools in need.
Similarly, in response to the second recommendation, the Executive
Director stated that the BOE's newly established committee on charter
schools has begun reviewing monitoring data. BOE Board members also
provided technical clarifications, which we incorporated as appropriate in
this report. In response to Board member comments, we did not change
enrollment or school data, because the audited enrollment count and D.C.
Public Schools confirmed our initial information was accurate.
We also provided a draft of this report to the PCSB. The comments of the
PCSB Executive Director supported our recommendation that the BOE Office
of Charter Schools, the PCSB and D.C. Public Schools establish a routine
process for the secure transfer and maintenance of records when schools
close. PCSB officials also provided technical clarifications, which we
incorporated as appropriate in this report.
We are sending copies of this report to relevant District of Columbia
officials, relevant congressional committees, the Secretary of the
Department of Education, and other interested parties. We will also make
copies available to others upon request. In addition, the report will be
available at no charge on GAO's Web site at http://www.gao.gov . Please
contact me at (202) 512-7215 if you or your staffs have any questions
about this report. Contact points for our Offices of Congressional
Relations and Public Affairs may be found on the last page of this report.
Other major contributors to this report are listed in appendix IV.
Marnie S. Shaul Director, Education, Workforce and Income Security Issues
Appendix I: Methodology Appendix I: Objectives, Scope, and Methodology
As required by the D.C. Appropriations Act of 2005, we conducted a review
of D.C.'s two charter school authorizers, the Board of Education (BOE) and
the Public Charter School Board (PCSB). In conducting our analysis, we
reviewed the D.C. School Reform Act, as amended, and other applicable
federal and District laws and regulations to determine the authorizers'
legal responsibilities. To determine how the authorizers used their
resources (financial and otherwise), we analyzed the authorizers' budgets
and expenses for fiscal years 2003 and 2004. We also examined the
authorizers' use of staff resources and D.C. government services.
Specifically, we identified the types of services available to the
authorizers by D.C. agencies and learned if and how the authorizers used
these services. To analyze the authorizers' provision of oversight, we
examined monitoring reports, audits and related documentation from 8 of
the 42 DC charter schools operating in school year 2004-2005. We selected
these schools using nonprobability procedures. In nonprobability sampling,
staff selected a sample based on their knowledge of the population's
characteristics. We selected schools to ensure that our report was able to
address a variety of the issues that the oversight boards faced in their
monitoring efforts. Results from this nonprobability sample cannot be
generalized to the entire population of schools. GAO also convened two
focus groups of charter school administrators (one focus group per
authorizer) to substantiate and augment information provided by the
authorizers. Finally, we examined the actions the authorizers took to
address issues arising from the closure of the nine charter schools that
have lost their charters to date. (See below for more information about
our budget, monitoring, and closure document analysis and use of focus
groups.) We interviewed authorizer staff and board members and officials
of District agencies, including D.C. Public Schools, the Office of the
Chief Financial Officer, the Office of the D.C. Auditor, and the D.C.
Office of the Inspector General. We also interviewed representatives from
the D.C. Public Charter School Association and Friends of Choice in Urban
Schools, a D.C. charter school advocacy group.
We conducted our work between January and November 2005 in accordance with
generally accepted government auditing standards.
Analysis of Financial Documents
To analyze the authorizers' resources and to learn how they have used
them, we examined the PCSB's and BOE Office of Charter Schools's income
and expense statements for fiscal years 2003 and 2004. We analyzed the
income statements to determine the proportion of income each board derived
from various sources. Additionally, through interviews with authorizer
staff, we identified income that was carried over from the previous fiscal
year, which was not specifically labeled as such. We analyzed expenses and
categorized these expenses into similar groupings for comparability
purposes. We compared these data with projected budgets for corresponding
fiscal years to identify differences. Finally, we reviewed the PCSB's
financial statement audits for these fiscal years. While the D.C. School
Reform Act explicitly requires the PCSB to obtain an annual financial
statement audit, the Act contains no such requirement for the BOE Office
of Charter Schools. As a result, we used unaudited financial information
from the BOE Office of Charter Schools.
Analysis of Monitoring Documents
To obtain information about the processes both authorizers used to monitor
charter schools after they had opened, we examined monitoring
documentation for eight charter schools-four from each authorizer. These
eight schools were selected for variation in the date the schools opened,
grades served, and the schools' history of probation or sanctions.
Additionally, in selecting the 8 schools, we considered whether or not the
charter school had gone through the 5-year review process, targeted a
special needs population, and had achieved Adequate Yearly Progress in
math or reading as required by the No Child Left Behind Act, and chose
schools for variation in these areas. While our nonprobability selection
of 8 of the 42 D.C. charter schools does not allow GAO to generalize
results to all 42 charter schools, our sampling procedures helped ensure
that GAO was able to address the full assortment of issues that the
oversight boards faced in their monitoring efforts. Once the schools were
selected, we requested the authorizers provide us with all monitoring
documents, including documentation of pre-opening visits, annual
monitoring site visits, annual audited financial statements, and
documentation of any sanctions placed on the school.1 We examined these
documents to learn how the BOE and PCSB monitored academics, finances,
school governance and compliance with applicable laws and regulations. For
each of these areas, we examined the types of deficiencies the authorizers
identified at the schools and how the authorizers ensured deficiencies
were corrected. We analyzed this information on a year-by-year basis to
identify trends in how the BOE and PCSB monitored schools and addressed
problems. We also reviewed Board minutes from monthly meetings held
between January 2003 and April 2005 to learn information about how the BOE
and PCSB address charter school problems at board meetings. We also used
this information to learn more about specific issues at D.C.'s charter
schools.
1In a limited number of instances, some school documentation was not
provided. In these instances, we followed up by phone and e-mail with the
authorizers, who confirmed for us that they no longer had all monitoring
documentation for every school.
Focus Groups
We also used focus groups to obtain the opinions and insights of D.C.
charter school principals and other school officials regarding PCSB and
BOE oversight efforts. Focus groups are a form of qualitative research in
which a specially trained leader, the moderator, meets with a small group
of people who have similar characteristics and are knowledgeable about the
specific issue. The results from the discussion groups are descriptive,
showing the range of opinions and ideas among participants. However, the
results cannot serve as a basis for statistical inference because
discussion groups are not designed to (1) demonstrate the extent of a
problem or to generalize results to a larger population, (2) develop a
consensus for an agreed-upon plan of action, or (3) provide statistically
representative samples with reliable quantitative estimates. The opinions
of many group participants showed a great deal of consensus, and the
recurring themes provide some amount of validation.
We conducted two focus groups-one with school leaders from schools
overseen by PCSB and one with school leaders from schools overseen by BOE.
We invited all of the eight schools whose monitoring documents had been
assessed by GAO to attend their respective focus groups. In addition, we
invited representatives from a random selection of the remaining charter
schools (those whose monitoring documents were not assessed by GAO) to
gather information from additional schools. Attendance on the part of
invited participants was voluntary. We had three participants from three
different schools at each of our two focus groups for a total of six
schools participating. A trained focus group moderator led the
discussions. We developed a discussion group guide to assist the moderator
in leading the discussions. A transcription service recorded and then
transcribed the conversations.
Analysis of Documentation from Closed Charter Schools
To determine the actions the authorizers have taken when D.C. charter
schools closed, we examined documentation from the seven charter schools
closed by the BOE and the two closed PCSB charter schools-one voluntarily
and one through charter revocation. In each instance, we reviewed the
monitoring documentation for each of the closed schools to determine how
the authorizers had identified and reacted to problems at the schools. We
reviewed Board minutes to determine if and when sanctions were placed on
the schools and how the schools responded to these disciplinary actions.
We reviewed revocation documentation, including school and authorizer
correspondence, school appeals, and minutes from Board meetings when
revocations were discussed. Additionally, we analyzed the authorizers'
budget documents to determine how the authorizers used their financial
resources to close schools. We reviewed D.C. Public School policies for
closing schools and compared these policies with the authorizers' school
closure procedures. We attended a town hall meeting organized by the PCSB
for parents of a charter school that was being closed to observe how the
authorizer's staff and school administrators communicated closure
information to students and parents. Finally, we interviewed one school
administrator from a school that had its charter revoked to learn about
the closure process from the school's perspective.
Appendix II: Comments from the D.C. Board of Education Appendix II:
Comments from the D.C. Board of Education
Appendix III: Comments from the PCSB Appendix III: Comments from the PCSB
Appendix IV: A Appendix IV: GAO Contact and Staff Acknowledgments
GAO Contact
Marnie Shaul (202)512-7215, [email protected]
Staff Acknowledgments
Sherri Doughty, Assistant Director, and Tamara Fucile, Analyst in Charge,
managed this assignment and made significant contributions to all aspects
of this report. Christopher Morehouse also made significant contributions,
and Carlos Hazera, Walter Vance, and Shannon VanCleave aided in this
assignment. In addition, Richard Burkard and Shelia McCoy assisted in the
legal analysis, Julie Phillips assisted with the financial analysis, and
Tovah Rom and Rachael Chamberlin assisted in the message and report
development.
Related GAO Products Related GAO Products
Charter Schools: Oversight Practices in the District of Columbia.
GAO-05-490 . Washington, D.C.: May 19, 2005.
Charter Schools: To Enhance Education's Monitoring and Research, More
Charter School-Level Data Are Needed. GAO-05-5 . Washington, D.C.: January
12, 2005.
No Child Left Behind Act: Education Needs to Provide Additional Technical
Assistance and Conduct Implementation Studies for School Choice Provision.
GAO-05-7 . Washington, D.C.: December 10, 2004.
District of Columbia's Performance Accountability Report. GAO-04-940R .
Washington, D.C.: July 7, 2004.
Charter Schools: New Charter Schools across the Country and in the
District of Columbia Face Similar Start-Up Challenges. GAO-03-899 .
Washington, D.C.: September 3, 2003.
Public Schools: Insufficient Research to Determine Effectiveness of
Selected Private Education Companies. GAO-03-11 . Washington, D.C.:
October 29, 2002.
DCPS: Attorneys' Fees for Access to Special Education Opportunities.
GAO-02-559R . Washington, D.C.: May 22, 2002.
District of Columbia: Performance Report Reflects Progress and
Opportunities for Improvement. GAO-02-588 . Washington, D.C.: April 15,
2002.
Title I Funding: Poor Children Benefit though Funding per Poor Child
Differs. GAO-02-242 . Washington, D.C.: January 29, 2002.
District of Columbia: Comments on Fiscal Year 2000 Performance Report.
GAO-01-804 . Washington, D.C.: June 8, 2001.
Charter Schools: Limited Access to Facility Financing. GAO/HEHS-00-163 .
Washington, D.C.: September 12, 2000.
Charter Schools: Federal Funding Available but Barriers Exist.
GAO/HEHS-98-84 . Washington, D.C.: April 30, 1998.
Charter Schools: Issues Affecting Access to Federal Funds.
GAO/T-HEHS-97-216 . Washington, D.C.: September 16, 1997.
(130479)
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www.gao.gov/cgi-bin/getrpt? GAO-06-73 .
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and methodology, click on the link above.
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Highlights of GAO-06-73 , a report to congressional committees
November 2005
D.C. CHARTER SCHOOLS
Strengthening Monitoring and Process When Schools Close Could Improve
Accountability and Ease Student Transitions
D.C. has a larger percentage of students in charter schools than any
state. To help oversee D.C. charter schools, Congress established two
authorizers-the Board of Education (BOE), which has an Office of Charter
Schools responsible for oversight, and the independent Public Charter
School Board (PCSB). Congress required the GAO to conduct a study of the
authorizers.
This report-which completes GAO's May 2005 study-examines the (1)
authorizers' resources, (2) oversight practices, and (3) actions taken
once charter schools close. GAO examined BOE and PCSB monitoring reports,
revenue and expenditure documents, and closure procedures.
What GAO Recommends
GAO recommends that the BOE Office of Charter Schools implement a
risk-based oversight system to target monitoring to new and at risk
charter schools. GAO recommends that the BOE create a routine process to
review data collected by its Office of Charter Schools. GAO also
recommends that the BOE, the PCSB, and D.C. Public Schools jointly
establish a process to guide their actions after schools close, including
a system for the secure transfer and maintenance of student records. BOE
officials noted that they were taking actions that would address GAO's
recommendations. PCSB comments supported GAO's third recommendation.
The two D.C. charter school authorizers differed in revenue, number of
staff overseeing schools, and use of D.C. services, but both spent their
funds to support oversight activities. The BOE Office of Charter Schools
had less revenue and fewer staff overseeing fewer schools than PCSB. It
fulfilled its oversight responsibilities by using some D.C. Public School
services and also occasionally calling upon D.C. agencies for financial
operations reviews. The PCSB had a larger staff that oversaw more schools
and had revenue more than two times larger than that of the BOE Office of
Charter Schools. The PCSB did not use any D.C. Public Schools services,
but did refer one school to a D.C. agency for further examination. Despite
these differences, both authorizers used most of their fiscal year 2004
expenses for in-house board operations, such as personnel, and also hired
consultants to help monitor charter schools.
D.C. Charter School Authorizer Responsibilities
Both D.C. authorizers provided technical assistance to schools and had
similar oversight practices, such as tracking school academics and
finances, but took different approaches. The BOE Office of Charter
Schools, with only 3 staff, provided the same level of oversight to all of
its 16 schools and thereby limited its ability to target additional
resources to schools requiring more assistance. Moreover, when the BOE
Office of Charter Schools gave its Board monitoring information on its
charter schools, the Board-also responsible for the city's 167 traditional
schools-did not regularly review that information. In contrast, the PCSB
targeted additional oversight on new charter schools and those where
problems had been identified. The PCSB also granted more flexibility to
well-managed schools. Although problems persisted at some schools, the
PCSB's targeted system enabled it to focus more attention on these
schools.
Once D.C. charter schools closed, both authorizers took a number of
actions to safeguard student records and public assets and inform parents
of their children's educational options; however, issues arose that both
authorizers found difficult to adequately address, particularly when the
closed school was insolvent. Managing and safeguarding student records was
the most expensive and challenging aspect of closing schools, authorizers
reported. Moreover, the authorizers' closure processes were different each
of the 9 times charter schools closed, which limited opportunities to
build on past experiences.
*** End of document. ***