Findings of financial analysis on charter schools in Arizona

A Grand Canyon Institute’s report specifies that its reform recommendations relate more to transparency and consistency than charges of fraud or illegal activities.

The report’s analysis states that district and charters’ financial accountability is not the same, with districts required to undergo more scrutiny and financial requirements related to purchases, budgeting and general accounting procedures.

“What’s broken needs fixing,” reads a portion of the report. “Charters can, and should be, a vital part of educational reform and innovation. The bad actors can’t be allowed to destroy the great charters that are out there.”

The report by the centrist think tank suggests adoption of accounting rules that would apply similarly to both districts and charters so as to mitigate some of the financial reporting deficits it detected in more than 75 percent of the state’s charter schools.

Such legal changes would not cause any financial harm to charters, but would clarify how they spend taxpayer dollars, the report said.

“The matter demands attention if we are serious about educating our children,” the report reads.

In 2016-17, the Arizona Charter Schools Association reported that its approximately 500 charters served 180,000 students at a public cost of about $1 billion.

The Grand Canyon Institute Research Director Dave Wells said the laws that established charter schools need to be updated so as to assure the public that dollars invested in charters are being used as intended, particularly when it comes to procurement.

The Institute takes issue with charter school operators legally serving as contractors for school equipment, supplies and technology.

District schools are required by law to use a bidding process for such purchases; sometimes districts will join together in a bulk purchase arrangement through state-approved contractors.

In 2014, one charter paid $12.2 million for software and curriculum to a for-profit business that was owned by the charter holder, the Institute reported.

“We think that’s a questionable transaction,” Wells said.

But he readily admits it is not illegal.

“The charter board can’t enforce laws that don’t exist,” Wells said.


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