Financial Fraud, Malfeasance, and Ineptitude Plague Federal Government Charter Schools Program
Since its establishment in 1994, the Charter Schools Program (CSP) has aimed to support charter schools across the United States using federal funds. During the Obama administration, the program experienced significant growth, doubling student attendance in charter schools. However, reports from 2014[1] through[2] 2016[3] uncovered widespread misuse of funds and a lack of proper oversight, revealing millions of dollars wasted on schools that either never opened or quickly closed due to mismanagement or fraud. Then in 2019, a series of reports by the Network for Public Education (NPE), the first of which I co-authored[4],[5] and a number of articles[6][7][8][9] based on NPE’s research, led to a more definitive assessment of CSP’s contribution to the financial waste, fraud, and mismanagement that have become endemic in the charter school industry.
One such case occurred in Delaware, where the Innovative Schools Development Corporation received substantial grants to open charter schools. Despite receiving federal funds, many of these schools faced safety concerns and failed to comply with educational standards, ultimately struggling and shutting down.
Charter school waste primarily stems from lax oversight and biased review processes within the Department of Education. Applicants often make false claims that go unchecked, leading to the misallocation of funds. What’s more, state agencies frequently fail to monitor how these funds are spent, allowing taxpayer money to be pocketed by private entities rather than used for its intended purpose.
When a charter that received grant money from the federal government suddenly closes, the loss of money is not limited to the federal government. The whole community takes a financial hit, which can result in the district having to make across-the-board budget cuts that eliminate teacher positions and programs in public schools all children attend. But the pain inflicted from charter school fraud and malfeasance goes beyond money. With every new charter school that said it would open and didn’t, or opened and then quickly closed, there were families and kids who ran after promises of new and better education opportunities that turned out to be a mirage and then were left stranded.
Despite these issues being brought to light, the federal government continued to fund charter schools through CSP, resulting in further waste. Reports from the Network for Public Education (NPE) in 2019 revealed even more significant levels of mismanagement, with an estimated $1.17 billion wasted in charter grant programs. The failure rate of charter startups increased from 30 percent to 37 percent, underscoring the programʼs inadequate monitoring and misleading grant applications.
NPEʼs detailed analysis of federal charter school grants from 2006 to 2014 highlighted the extent of the financial losses. Moreover, investigations revealed how federal funds meant for charter schools ended up in private hands, with consultants extracting fees from schools that never opened and for-profit companies profiting from grants intended for nonprofits.
Instances of mismanagement and financial waste in charter school funding have prompted calls for reform from public school advocates. Despite resistance from industry proponents and federal officials like Arne Duncan and Betsy DeVos, who often ignore criticism and requests for transparency, public school advocates urge Congress to “defund” CSP. The Biden administrationʼs proposed budget for 2025 includes a $40 million cut to the program, reflecting concerns over decreased demand and accountability.
🔭 This summary was human-edited with AI-assist.
- ↑ Jeff Bryant, Salon, “The Great Charter School Rip-Off: Finally, the Truth Catches up to Education ‘Reform’ Phonies” (October 2, 2014).
- ↑ The Center for Media and Democracy’s PRWatch, “Charter School Black Hole: CMD Special Investigation Reveals Huge Info Gap on Charter Spending” (October 21, 2015).
- ↑ In September 2016, an audit by the Department of Education’s Inspector General’s Office found that the department had failed to provide adequate oversight of some of its relationships with charter management organizations.
- ↑ Carol Burris and Jeff Bryant, Network for Public Education, “Asleep at the Wheel: How the Federal Charter Schools Program Recklessly Takes Taxpayers and Students for a Ride” (April 2019).
- ↑ Carol Burris, Network for Public Education, “Still Asleep at the Wheel: How the Federal Charter Schools Program Results in a Pileup of Fraud and Waste” (December 2019).
- ↑ Jeff Bryant, the Progressive, “New Report Spurs Congress to Question Up to $1 Billion Wasted on Charter Schools” (April 2, 2019).
- ↑ Jeff Bryant, Truthdig, “Charter Schools Are Scamming the U.S. Government” (March 29, 2019).
- ↑ Carol Burris and Darcie Cimarusti, Network for Public Education, “Chartered for Profit: The Hidden World of Charter Schools Operated for Financial Gain” (March 2021).
- ↑ Valerie Strauss and Carol C. Burris, Washington Post, “Is the Charter Schools Program Financing White-Flight Academies?” (June 7, 2021).
