When Bradley Creemos Academy in Goodyear was closed down earlier this year, it highlighted the desperate need for clear answers on how taxpayer dollars are being spent on charter schools.
Buried in the massive HB 2663 budget passed this month, new rules are now in place to help stop those schools from operating if it’s found their finances are not in order.
Speaker J.D Mesnard released the following statement:
“In response to the abrupt closing of Discovery Creemos Academy in Goodyear earlier this year, the Legislature enhanced the authority of the State Charter School Board to close charter schools that don’t meet financial standards. This additional authority will ensure that the Board has the tools it needs to hold charter schools accountable for their financial management.”
“The charter board has argued that they don’t have the power to close schools for financial reasons, but they do now,” said Dave Wells with the Grand Canyon Institute.
Wells has spent countless hours digging into Arizona charter school financial records and it doesn’t look good.
“We have over five hundred charter schools in the state, that means about 139 of them have failed at least three of the financial measures such as they’re losing money, or they have too much debt, or they don’t have enough cash in reserve,” Wells said.
In the past, Arizona State Charter Board officials said they did not have the authority to close down schools based on poor finances.
“The legislatures has given them that power so now they can say if a school's not performing financially they have the ability now to close it,” said Wells.
He says at least 41 are currently on the brink of shutting down for those reasons.
“With Bradley Creemos Academy, we had an option of either revoking them or renewing them it was a very black and white choice, and our board was very frustrated by that because we saw irregularities, we saw problems,” said Arizona State Board of Charter Schools Chair Kathy Senseman.
Senseman says once the new rules take effect in August, they’ll be ready.
“We’re looking forward to having another tool in the toolbox to review these schools,” said Senseman, who added that a plan will be devised to utilize and enforce the law over the coming months.
But Jim Hall of Arizonans for Charter School Accountability says the law doesn't go far enough. He'd like to see Charters Schools be required to follow public procurement laws. Arizona public high schools are required to follow public procurement laws.
"It's designed to protect public money and help track how tax dollars are spent,“ said Hall.
He's worried that by being exempt from those laws, Charter school owners could siphon public money into their own pockets like we saw at Bradley Creemos Academy.
A public district employee that does not follow all state procurement laws is personally liable for any loses plus an additional 20 percent and legal fees. They can also be charged with a class 4 felony.
By not following procurement laws, charter owners can buy from anyone, including themselves. For example, non-profit charters often purchase all their supplies and lease their buildings and teachers from a for-profit company owned by the charter holder without getting bids, making the transaction secret.
"The owner started four companies and sold himself $500,000 worth of stuff," said Hall.
Bradley Creemos Academy's owner Daniel Hughes has been accused of misusing public funds, shutting down the school and skipping town.
Senseman admits the debate surrounding public procurement is an issue that needs to be addressed but takes time.
"I think as everything evolves, we need to look at those things," said Senseman.