Report: $1.7M paid to Mich. charters that never opened

James David Dickson
The Detroit News

At least $1.7 million in federal funds was paid to 25 Michigan charter schools that never opened, according to a report released Wednesday by a Wisconsin-based progressive advocacy group.

The Center for Media and Democracy said it reviewed federal and state records that show the “ghost schools” were approved for $3.7 million from the federal Charter Schools Program in 2011 and 2012, and received at least $1.7 million.

The center said that WestEd — a private company hired by the federal government to monitor states’ handling of the funds and compliance with regulations — alerted the U.S. Department of Education that some schools were receiving grants and not opening, “but the department took no meaningful action,” according to documents reviewed by CMD.

In addition, the center reported that 108 charter schools in Michigan closed after receiving more than $1 million in CSP grants; many closed “due to lack of ‘academic viability’ (poor results) while others have closed due to lack of ‘financial viability’ (such as inadequate enrollment) and some for both or other failings,” the report said.

The report says more than $3.7 billion in federal funding has been spent on charter schools nationwide since 1995 but that “the public does not have ready access to key information about how their federal and state taxes are being spent to fuel the charter school industry since the 1990s.”

The center said it filed a Freedom of Information Act request with the U.S. Department of Education and found that since 2010, 139 charter schools in Michigan received nearly $35 million in federal funds.

The center also examined federal funding for charters in the District of Columbia and 10 other states: Arizona, Ohio, California, Indiana, New York, Texas, Utah, Colorado, Florida and Wisconsin.

Michigan had 302 charter schools that educated 141,094 students in 2014-15, according to the state Department of Education. The number of charter schools and enrollment has doubled since 2000.

In June 2011, Michigan received a $43.9 million funding commitment from the U.S. Department of Education to fund the Charter Schools Program in the state until 2015. In the end, the state granted $42,169,568 of that money.

Its purpose, wrote then-state superintendent Mike Flanagan in a letter in August 2011, was to “strengthen the pool of applicants available to Michigan charter authorizers, support successful recipients to implement the schools they proposed (and) enable charters with strong student achievement to mentor start-up schools.”

Buddy Moorehouse, spokesman for the Michigan Association of Public School Academies, the association representing 90 percent of the state’s charter schools, said that the “ghost school” phenomenon never affected any MAPSA members, because schools have to be open to belong to the group.

“There are a lot of proposed charter schools that make it partway through the process, but for whatever reason, they never open,” he said via email. “In a lot of cases, it’s because they have facility issues. But it’s very hard to open a charter school — as it should be — and some schools just aren’t able to finish the process.”

Among “ghost schools” on the list receiving grants in 2011-12 were the Metro YouthBuild Academy, Harris Academy, the International Academy of Detroit, Glenhurst Academy and the Brightspire Center for Education and Leadership, according to the CMD report. In 2012-13, one-third of the grantees, appeared on the “ghost schools” list.

The process changed in 2012, the U.S. Department of Education said in an emailed statement: “(The Michigan Department of Education’s) most recent monitoring report of Michigan, from 2012, recommended that the grantee take stronger measures to determine subgrantee quality; subsequently, the MDE took steps to raise the expectation for the quality of planning grants.”

Those measures apparently worked. In 2013-14 and 2014-15, none of the schools awarded a planning grant appeared on the “ghost schools” list.

“A grant recipient is not required to repay a grant if it fails to open a new charter, unless the grant was used to buy equipment and materials,” Bill DiSessa, a spokesman with the Michigan Department of Education, said in an email. “In such cases, the materials are disposed of in such a way as to ensure the materials — or the funds received from liquidating them — remain available for public use in Michigan.”

There are no sanctions, at the state or federal level, for not opening a school that received grant funds, DiSessa wrote. “All recipients of grant funding are audited to ensure their activities are allowable, and carried out in accordance with approved budgets and management plans,” he said.

But failure is part of the bargain, according to the federal education department.

“Competitive grant programs and competitive subgrant programs (run by state education agencies) are designed to award funds to the charter school developers with the best chance of successfully opening a high-quality charter school,” the department said in an email. “However, there are a number of factors at the local level that often determine whether or not a charter school is able to open successfully, including their ability to secure a facility and whether or not they receive full approval from the chartering agency.

“Investing in planning and design costs is necessary to support the mission of the charter school program, whether an individual school opens or not; because these are allowable costs, they are not recovered,” the department’s statement said.