Arizona Education Association

Spring 2018

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12 ADVOCATE | SPRING 2018 AT THE CAPITOL It's Time for Charter School Accountability Reform L ast week the news reported two stories providing an excellent lesson on accountability and transparency for schools receiving public funding. One case involved the Scottsdale Unified School District CFO resigning for allegedly engaging in fraud and self-dealing. The other case was the Discovery Creemos Academy, formerly known as Bradley Academy of Excellence, whose CEO also allegedly committed fraud and self-dealing. The difference is the first case involves thousands of dollars in a local school district, and the CFO is under investigation and could face penalties. Whereas, the second case involves millions of dollars, and the CEO is not under investigation and may still operate charter schools in Arizona. "Our students are the ones who suffer when we don't hold charter schools accountable," says Arizona Education Association (AEA) President Joe Thomas. "Hundreds of students and their parents found themselves scrambling when Discovery Creemos Academy decided to close its doors without notice in the middle of the school year. This is not the first time a charter school has done this. If the Arizona Legislature does not pass legislation that addresses this problem, then our students will continue to be at risk of having their education interrupted, and we will continue to see waste, fraud, and abuse of taxpayer money by charter school operators." "The closure of Discovery Creemos Academy was not a surprise to the Arizona State Board for Charter Schools, which is responsible for oversight of the state's charter schools," says Jim Hall, retired school principal and founder of charter school watchdog group, Arizonans for Charter School Accountability. "The Board knew the Academy was in financial trouble and was aware of CEO Daniel Hughes' unprecedented level of self-dealing from an audit conducted in 2016. They reported Hughes to the Attorney General for suspicion of fraud nearly a year later, but they don't have any power to close charter schools for financial trouble. The State Auditor General pursues state agencies that misspend tax dollars – such as the case in Scottsdale, but when it comes to charters, by state law, the Auditor is not allowed to even review charter school spending." "Scottsdale residents should be concerned that their bond monies are being used appropriately and not mired in a conflict of interest. Just as taxpayers across Arizona should be concerned about the potential conflicts of interest plaguing 77 percent of charter schools due to the high rate of related-party transactions," says Dave Wells, Research Director at centrist think tank the Grand Canyon Institute (GCI). "Last year, GCI produced a policy report, "Following the Money: Twenty Years of Charter School Finances in Arizona", that revealed up to 77 percent of Arizona's charter school holders use their state taxpayer funds for potentially questionable related-party financial transactions. Unlike public district schools, nearly all charter schools in Arizona operate outside the rules of the public procurement process, freeing them from the need to conduct competitive bidding." On Monday, February 5, the House Education Committee passed House Bill 2460, a bill that would force school districts to sell vacant school buildings to charter schools. We call on our state's leaders to give our bills a hearing in committee. Thank you to Arizona state Senators David Bradley and Martín Quezada, and state Representatives Isela Blanc, Randy Friese, and Athena Salman for introducing legislation that will protect our students and public money from more charter school fraud, waste, and abuse. Charter School Accountability Reform Bill Package: • Senate Bill 1174 – Requires the Arizona Department of Education to produce an annual assessment of the impact of charter schools on school districts. • Senate Bill 1303 – Charter school omnibus with various changes related to charter schools, including prohibiting a charter school from locating within a three-mile radius of a school district school assigned a letter grad of A or B, and requiring the state Auditor General to conduct financial audits of charter schools. • Senate Bill 1309 – Requires charter schools go through the same public procurement process as school districts. • House Bill 2142 – Requires charter schools that close to transfer all property to the nearest school district, thus keeping public money public. • House Bill 2358 – Prohibits related parties from serving as charter school board members. • House Bill 2364 – Removes charter school exemption for procurement and auditing procedures. • House Bill 2365 – Requires charter school operators to comply with public transparency and reporting laws.

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