Tag Archives: Nevada charter schools

The Privatization Scam Continues: Clark County Schools Version

“Five Clark County schools are still in the running to partner with charter operators as part of the new, controversial Achievement School District after a state Board of Education meeting Thursday.

From a list of nine, state board members removed four middle schools, citing those schools’ higher ratings on the state star system. The final decision of which schools will be in the inaugural run will be decided by achievement district officials before Feb. 1.”  [LVRJ]

Background

According to the Nevada Department of Education the Achievement School District has the following task:

The Nevada Achievement School District exists to partner with communities to provide vibrant, high-quality, in-neighborhood alternatives for students in the State’s underperforming schools in order to strengthen the educated, healthy citizenry across the State. Our purpose is critical: to provide students in persistently struggling public schools with the opportunity to attain an education that will prepare them to be college, career and community ready. Currently, over 57,000 students in Nevada attend persistently struggling schools. We must reduce that number; and, we will work to do so by recruiting excellent educators and empowering them to partner with neighborhoods to transform the educational experiences of these students. [DoENV]

Translation: The Department of Education would like to find private sector “operators” to take over the management of “struggling” schools.  Applicants are asked to contact Jana Wilcox Lavin, whose background is in marketing.  Leaving a person to ask what qualifications she might have as the “superintendent” of a school district with a BA from Tulane and an MA in Integrated Marketing Communication from Emerson College.  Not that those aren’t fine institutions, but exactly how this prepares a graduate and board member of a college prep boarding school in Connecticut (Hotchkiss) to run a charter system isn’t all that clear.  As a prep school product I’m not knocking the prep part, but there’s no Public in Hotchkiss, Tulane, or Emerson.  As close as Wilcox-Lavin has come to the Public part of the equation may be a stint as the executive director for a charter school operator in Memphis, TN.

Last August, the Comptroller of the State of Tennessee released its audit of the TN Achievement School District, and was less than pleased.  Among the findings:

“The first comprehensive performance audit of the state-run Achievement School District shows a lack of adequate control over processes in human resources and payroll, including reimbursement of excessive travel claims and payments for alcohol at an office celebration.”

According to the audit, the ASD, which operates 31 schools in Memphis and two in Nashville, failed to verify the education credentials of central office staff, and employees were able to approve their own travel expenses. Inadequate procedures for departing employees also resulted in overpayment of salary and benefits, according to the audit.

The audit states that management did not properly approve nine expenditure transactions totaling $83,363 and seven travel claims totaling $2,460.

Claims deemed “excessive” by the audit included a $698 expense for a single day of transportation services to drive the deputy superintendent from Nashville to Memphis and a $2,500 holiday party held at the Sheraton Hotel in Memphis for all ASD schools and staff and to recognize outgoing superintendent Chris Barbic.  “The event included expensive finger foods, alcohol, and a bartender,” the audit states.

In addition, “in recognition of ASD school leaders and support staff, management purchased $1,631 of alcohol using a purchasing card and charged the expense to Charter School Grant Funding, a private grant that provides restricted funding for operating expenses for school year 2015-16 Achievement Schools … .”  [Tennessean]

Perhaps someone with some public school experience might have guessed that spending $1,631 on booze probably wasn’t going to be met with applause in Tennessee.   “Inadequate internal controls” is an accountant’s polite way of saying that there’s no way to effectively monitor spending and control waste, fraud, and abuse.  Tennessee’s ASD lacked adequate “internal controls.”

“The Achievement School District’s management did not establish adequate controls over several key human resources and payroll processes
According to Section 49-1-614 (g) (1), Tennessee Code Annotated, “The ASD [Achievement School District] shall develop written procedures, subject to the approval of the commissioner, for employment and management of personnel as well as the development of compensation and benefit plans.” During our audit, we found seven key areas where ASD did not establish processes over key human resources and payroll functions, including segregating duties; maintaining personnel files; verifying education credentials; documenting time and attendance; completing performance reviews; documenting approvals of bonuses and pay raises; and exiting employees (see page 14).” The full report is available at this link as a PDF.

In a word – ouch.  With a performance audit such as this it’s hard to understand why Nevada would tout conformance with the Tennessee Achievement School District model?

Then there’s the What Do You Get For The Money question?

A 2015 study by Vanderbilt University’s Peabody College frankly didn’t find much in the way of significant progress among the students, finding more in locally operated “i-Zone” schools.  [Full report here pdf]  There were “small positive effects in math and science; overall the “i-Zone” schools had moderate to larger positive effects in reading, math, and science. “Overall ASD schools did not gain more or less than other priority schools that were in an “i-Zone.” [Vanderbilt pdf]  The TN ASD pleaded for “patience.” [Nashville NPR]

However, let’s not focus on Tennessee’s ASD to the exclusion of taking a more attentive look at the charter operators approved to function in Nevada.   Three were selected in November 2016:  Democracy Prep Public Schools, Futuro Academy, and Celerity Schools. [LVRJ]   Of the three, Celerity, granted conditional approval, is subject to the most questions.

On October 18, 2016 The Los Angeles Unified School District board revoked the charters of Celerity schools citing  “severe concerns about oversight and transparency from the parent company, Celerity Global…” [CBS]  More specifically, the Board was concerned about:

…Celerity, though a review of correspondence indicates the district is interested in three corporate entities closely linked with the school group. Officials appear to be concerned about conflicts of interest and whether senior officials inappropriately enriched themselves.

…The district faults both organizations for not providing requested documents to investigators. Their listed deficiencies will include incomplete descriptions of job duties and of suspension and expulsion procedures. [LATimes]

Tangled Alliances and Corporate Complexity?

If the LAUSD is concerned about transparency in Celerity Schools management, the Celerity Global home page doesn’t offer much in the way of information.  The Who We Are links describe services, not management or other personnel associated with the organization.  A bit of digging yields that the Chief Operating Officer is Vielka McFarlane, Los Angeles, CA.  Craig Knotts is listed as Regional Vice President (Louisiana), Kendal Turner is listed as CFO (CA) (AR app 2016).  Board members are listed here – none of whom have a background in education.

We can easily discover that McFarlane’s compensation for 2012 totaled $438,730.00 (990 part VII(a)); her compensation for 2015 is given as $227,306, with another $13,332 compensation for the “organization and related organizations.”  Celerity Global Development (501c(3)) reported assets of $11,127,842 in June 2014, and income of $10,834,558 as of June 30, 2014. [Guidestar] Other information on the form is either not digitized or not available.  Digging down to the pdf filing with the IRS, the 990 for 2015 lists associated contractors as Savantco Education (Los Angeles, CA) which provided “business management services” for $478,320 in compensation and CSMC, Temecula, CA which received another $288,600 in compensation for “business management services.”

Savantco  Education offers human resources, accounting, attendance accounting, business consulting and training, and grant writing as part of its services.  It is related to Savantco Financial and Savantco Global Enterprise. [CA registry]  Savantco has not been without its controversies, and one implosion in San Bernardino County, CA:

“On November 23, 2015, the Morongo Unified School District superintendent wrote a letter to the superintendent of the San Bernardino County Superintendent of Schools expressing concerns regarding conflict of interest. The concern focused on the involvement of the former superintendent/executive director of Hope Academy serving as a majority owner in SavantCo Education, the charter school’s back-office service provider. The master services agreement with the academy called for SavantCo Education providing finance, accounting and payroll services, business consulting, board meeting support, attendance and student information system management, charter development, grant administration, as well as financing support.
According to the auditors with the Fiscal Crisis and Management Assistance Team, Mecham, while yet serving as charter school superintendent, used Hope Academy’s relationship with SavantCo Education to reap hundreds of thousands of dollars in profit for himself and his wife.”  [SBCS]

CMSC is the Charter School Management Company, “CSMC is the nation’s premier business back-office provider to charter schools. We are committed to helping charter schools overcome the challenges they face by offering our expertise and solutions at an affordable price. Our charter school services include charter development, payroll, governance, finance, back-office, and a full range of business services.”

And, with contractors providing back office services we find more potential for a lack of – as the accountants say — “internal controls.”  The Inspector General’s Report (2016) on its review of charter school management wasn’t pretty, as evidenced in this chilling finding:

“We determined that charter school relationships with CMOs posed a significant risk to Department program objectives. Specifically, we found that 22 of the 33 charter schools in our review had 36 examples of internal control weaknesses related to the charter schools’ relationships with their CMOs (concerning conflicts of interest, related-party transactions, and insufficient segregation of duties).5 See Appendix 1 for details regarding the State summaries of 6 States and 33 charter schools we reviewed. We concluded that these examples of internal control weaknesses represent the following significant risks to Department program objectives: (1) financial risk, which is the risk of waste, fraud, and abuse; (2) lack of accountability over Federal funds, which is the risk that, as a result of charter school boards ceding fiscal authority to CMOs, charter school stakeholders (the authorizer, State educational agency (SEA), and Department) may not have accountability over Federal funds sufficient to ensure compliance with Federal requirements; and (3) performance risk, which is the risk that the charter school stakeholders may not have sufficient assurance that charter schools are implementing Federal programs in accordance with Federal requirements.” [Ed.gov. Inspector General/ pdf]

The Inspector General determined that not only did the schools, school districts, and states not have sufficient safeguards in place to prevent waste, fraud, and abuse, but that the Federal agency wasn’t prepared to fully audit and monitor this potential as well.  [Full report here IG/DoE pdf]

The Bottom Line

Nevada would do well to curb its enthusiasm about the expansion of charter schools in this state.

There is ample room to question the results of the experiment in Tennessee.  The gains have been small when compared to the expenditures involved. Further, for those who are concerned with waste, fraud, and abuse of taxpayer money – either state or federal – there are far too many examples of just such waste, fraud, and abuse by entirely too many non-profit organizations to lull any sentient observer into complacency.

Nevada officials are correct in being very careful of the corporate entanglements of management companies and charter school managers and operators.  California officials are correct in weighing the fiscal management of charter operators and questioning the corporate relationships between school and business operations.   There is no excuse for a “lack of internal controls,” these practices create havoc in both our public and private sectors, and any bid by any charter operator should satisfy the most detail oriented accountant.

Those who call for the mitigation of waste, fraud, and abuse; and, who clamor for transparency and accountability must demand that public funds used for any “Achievement School District” or charter operation be fully and completely audited – and the results available for public scrutiny.

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And then there were two: 2nd Lawsuit filed against Nevada’s school voucher law

School Corridor Lockers There are now two lawsuits filed against the “Education Savings Account” law enacted by the last session of Nevada’s Assembled Wisdom.  The first came late last month from the ACLU, and now a second comes from parents who are disturbed that the law takes revenue collected for public education and diverts it to private and religious schools.

“The lawsuit filed Wednesday claims ESAs violate the state constitution by diverting funds “exclusively” meant for public schools to private schools and other private expenses. It also argues the ESA bill undercuts funding for public schools to a less-than-sufficient level and does not mandate private schools to follow the same non-discrimination and accountability rules that state law requires of public schools.

The lawsuit includes a request for a judge to permanently block the Nevada treasurer’s office from implementing the ESA program, according to a news release.”  [LVRJ]

The notion that private is always better than public seems to undergird the assumptions of the proponents of public support for private education.  There are several streams that converge into this ideological river, some stronger than others.  Some relevant to the issues at hand, and others less so. The arguments are worth exploring.

Diversion

Proponents of the measure argue that since it’s the parents who make the funding request from the State Treasurer’s office, they have every right to make the diversion.  There’s a slippery slope question herein: Does an individual have the right to request the diversion of public funds for the benefit of a private enterprise?

For the sake of the general argument, let’s assume that we are not talking about schools in particular, but any state or local function.  A hypothetical might be illustrative, if not analogously probative – there is a reservoir stocked with fish by the Nevada Department of Wildlife, subsidized from about $231 million is expended in total on “fisheries management.” [NDW pdf] The sale of Trout Stamps brings in about $650,000 annually. [NDW pdf]  Approximately 1% of Nevada’s Department of Wildlife budget comes from the General Fund, and 2% from other state sources.  86% of the budget comes from wildlife fees and grants. Those fees include fishing licenses. A fishing license costs $13, and the Trout Stamp adds another $10 to the total.   Now, imagine an enterprise in close proximity to our hypothetical reservoir which charges admissions and fees to fish in the waters of its reservoir; no state license or special stamps required.

May a individual who doesn’t want to fish in public waters get $23 returned to a “fishing savings account” because he or she doesn’t want to fish in the public reservoir, and prefers to engage in that recreational activity on private lands, under private control?  Taxes and fees are combined to form the revenue base of the Department of Wildlife, so what is the justification for diverting funds from the Department of Wildlife back to those who do not wish to utilize its services?

We might apply the same analogy to other services like local libraries?  If a subscription library were to be established could local residents request a voucher for funds to subsidize their fees to the subscription library?  Could local residents request vouchers to reduce the burden for their payments to use private parks and pools?  May a local resident demand a voucher from a county government which collects property taxes, a portion of which are allocated to the operation of a hospital, if the resident chooses not to use the services of that local hospital?  Might a resident who pays for private security request a voucher for a “protection savings account” to subsidize his or her fees to the private security firm from taxes collected to finance the local law enforcement agencies?

There’s a tricky precedent here in the form of the “individual choice” argument.  The implications go far beyond the funding of private or parochial education, and range from the relatively minor (such as our fishing example) to the more serious (such as the public subsidies for public health or public safety services.)  Extrapolating this precedent could yield a chaotic system in which each individual is only obligated to pay for the “things” he or she personally wants. 

The Grass Is Greener

The “School Choice” argument has been framed as one of allowing parents to choose between the public and private system, with the private or charter schools held to be superior.  This argument branches out into several other strands.  In strand one, the question arises: Should public funds be used for the inculcation of religious ideals and dogma?

Article II of the Nevada Constitution is clear on this subject. “The legislature shall provide for a uniform system of common schools, by which a school shall be established and maintained in each school district at least six months in every year, and any school district which shall allow instruction of a sectarian character therein may be deprived of its proportion of the interest of the public school fund during such neglect or infraction, and the legislature may pass such laws as will tend to secure a general attendance of the children in each school district upon said public schools.”  Art II, Section 2 (emphasis added)

Sections 9 and 10 are equally exclusive: “No sectarian instruction shall be imparted or tolerated in any school or University that may be established under this Constitution.” And, “No public funds of any kind or character whatever, State, County or Municipal, shall be used for sectarian purpose.”

When the topic comes up three times in one brief segment of the State Constitution, we have to believe that those who crafted the document were serious about the subject.   So, when Bishop Gorman High School schedules Mass during the school day, would this violate the funding proscriptions in Article II of the State Constitution?  The answer seems clear in Section Ten. NO public funds of any kind or character whatever….”  Would this proscription also apply to the Southern Baptist Academy (K-12) online home schooling curricula?  Most likely.

Strand Two assumes parents want to make the best choices for their children, while the state has an obligation to create a “uniform system of common schools.” And at this point the categorization gets complicated.  There are parochial schools which are required to accept the children of any member of the parish.  There are also parochial schools, such as Bishop Manogue in Reno, NV which offer applications including recommendations from at least two teachers (math and English), and high school placement test results.  We should probably guess that those scoring higher will swim faster in the decision pools.  The Meadows is a non-sectarian school in Las Vegas, and its exclusivity is emphasized by the $15,500 to $24,025 tuition fees.  Neither exclusive (as opposed to totally inclusive) schools such as Bishop Manogue or The Meadows quite constitutes a “common” (as in totally inclusive) school.  Now, does a voucher – in the form of an ESA – violate the provisions of the State Constitution that revenue collected for educational purposes be used for schools which are not part of a “uniform system of common schools ” and really don’t intend to be?

Strand Three raises other categorical questions, such as when are other educational alternatives to be considered part of a “uniform system of common schools?”   For example, there are three forms of charter schools in Nevada depending on their sponsorship: District, University/College, and those approved by the State Public Charter School Authority.  The latter category gets us into some Alphabet Soup.  A private charter hires an ESP (Educational Service Provider) to handle day to day operations, and this management comes in two forms, the CMO and the EMO.  (Charter Management Organization, and Educational Management Organization) The EMO’s are more often those corporations which can afford to purchase school facilities.  Once the Alphabet Soup is sorted, it’s easier to examine the program management to see if it fits the template of a school’s definition of an institution fitting into a framework of “a uniform system of common schools.”

The extensive provisions of NRS 386 on Charter Schools should give some assurance of public accountability. There is an annual report from the Sponsor  NRS 386.610: For each charter school that it sponsors with a written charter, an evaluation of the progress of each such charter school in achieving the educational goals and objectives of the written charter. And, For each charter school that it sponsors with a charter contract, a summary evaluating the academic, financial and organizational performance of the charter school, as measured by the performance indicators, measures and metrics set forth in the performance framework for the charter school.  Three consecutive years of underperformance and determined by the CMO/EMO evaluation standards, and they’re out.

Not surprisingly, most of the Nevada charter schools are located in the Las Vegas suburban area.  Nor is it any great surprise that the ethnicity of 61.61% of the state charters is White, as compared to 35.98% statewide, and while the composition of public schools is about 40.56% Hispanic, the state charters enroll only 16.11% of that student population subset. [NVReport Card]  Surely, schools part of a “uniform system of common schools” would have enrollment statistics which better mirror those of the public schools? 

Thus, the question: If a school, while adhering to the testing regime of the State, isn’t representative of the enrollment of the “common schools” using even the most broad statewide description, does it qualify for public funding for its operations?  And, may a school, with the permission of the state, expend public funds if it fails to offer the same programs for special students as are required in the public schools?  In other words, do we have one system of common schools or two?

Who’s Choosing?

Heaven forbid I’m bashing private schooling – I’m one of its products.  However, I am also one who believes that private schooling is a choice, a choice made by parents who don’t want to avail themselves of the choice to send the kids to the public school.  Taxes are paid into state and local coffers for the maintenance of “a uniform system of common schools,” so that every other youngster in town who isn’t a parish member or having the luck to be born to parents who can afford private education,  isn’t denied  schooling.   The passage of the ESA legislation simply means I don’t have the choice NOT to pay for someone else’s choice to attend a private school.

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Emergencies: Creating and Sustaining Them in Nevada?

lack of planning Someone is asking the right question:

“Assembly Member Elliot Anderson (D-Winchester) then asked the biggest question of them all: Why is this “emergency measure” popping up now, and does it stand any better chance of passing the Senate than AB 148 or the proposed Fiore-Hansen SB 175 amendment. All Oscarson Therecould say was “I certainly hope so.” Meanwhile, a whole lot of students, teachers, and concerned family members certainly hope AB 487 meets the same fate as the dead AB 148 and the failed SB 175 amendment.” [LTN]

The measure under discussion is AB 487, another iteration of the ammosexual agenda Carry Everywhere nightmare, and it’s due for a hearing (of sorts) in the Assembly Judiciary Committee bright and early on Wednesday morning [pdf agenda] if it can get “emergency status.”  The tenacity of the gun advocates seems proportional to their delusion that somehow more guns will make up safer from more guns.  In case you missed it, this Salon piece does an excellent point by point deconstruction of the right wing’s ideological stance on the issue.

There’s another bill coming up on Wednesday which deserves more attention than it’s likely to get in the waning days of a legislative session, SB 292

“Section 1 of this bill provides that a board of trustees of a school district or the governing body of a charter school is not liable for any civil damages arising from any act or omission by a person employed by or volunteering at a school-based health center. Section 1 also defines “school-based health center” for such purposes.”

… Existing law limits the amount of noneconomic damages that may be an action for injury or death against a provider of health care based professional negligence. (NRS 41A.035) Section 3 of this bill limits noneconomic damages that may be awarded in such an action to $350,000, regardless of the number of plaintiffs, defendants or theories of liability. Existing law establishes a rebuttable presumption in actions for negligence”

This is NOT a School Nurse Protection Act, at least not the way it is worded.   Notice the phrase “…by a person employed by or volunteering at a school-based health center.”  So,  volunteers manning the school sick bay, and not school nurses, cannot render the school or charter operation liable for their actions or their failure to act?  If the person is a school nurse there are professional requirements for that.  However, (and this is a pretty big caveat) non-certified personnel may be allowed to administer medication, for which there are no pre-service nor professional development  specified training requirements. [NASBE] What could possibly go wrong?

But wait, there’s more! Senator Roberson seems intent upon his assault on the venerable Collateral Source Rule.  The Legislative Counsel Bureau explains what happens under SB 291:

“A common law doctrine, known as the “collateral source rule,” prohibits a defendant in a tort case from introducing into evidence proof of amounts that the plaintiff received or was entitled to receive from a source other than the defendant in compensation for the harms or injuries caused by the defendant.”

Existing law provides a limited exception to the collateral source rule by allowing a defendant in a case against a provider of health care based upon professional negligence to introduce evidence of amounts paid or payable to a plaintiff pursuant to policies of health or accident insurance, the United States Social Security Act, worker’s compensation statutes and other programs or contracts that pay for or reimburse costs of health care. (NRS 42.021)

This bill replaces the existing limited exception to the collateral source rule and instead requires a court, upon a motion by a defendant in any tort case, to reduce the amount of damages initially determined by the jury or other finder of fact by the amount of past medical expenses paid in relation to the injury or death sustained. However, this bill prohibits the court from reducing the amount of the damages by any amount: (1) paid for any treatment, care or custody provided by a provider of health care or medical facility on a lien; or (2) paid pursuant to medical payment coverage.  (emphasis added)

The “defendant” in this instance would be a negligent or otherwise incompetent health care provider.  Again, whatever success a plaintiff may have had in court against a person who negligently caused their pain, suffering, and possible disability – Senator Roberson would like to see reduced by any amount covered by Social Security disability benefits, worker’s compensation, or health or accident insurance.  The two bills are a double whammy for victims.

This session can’t end soon enough?

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School Dazed in the NV Assembled Wisdom

NV Legislature wide It’s School Daze for the Nevada Legislature and its Raucous Caucus, as AB 448 comes forward.  This is the Achievement District bailiwick in which all pretense of “local control” is pitched into oblivion

AN ACT relating to education; establishing the Achievement School District within the Department of Education; (1)  authorizing certain underperforming schools to be converted to achievement charter schools sponsored by the Achievement School District; (2)  prescribing requirements for the conversion of a public school to an achievement charter school and the operation of an achievement charter school; (3) providing for the use of certain school buildings by an achievement charter school without compensation; (4) authorizing a school district to provide services to an achievement charter school under certain circumstances; prescribing certain conditions of employment for a teacher at an achievement charter school; (5)  authorizing the conversion of an achievement charter school to a public school in a school district or a charter school; revising provisions governing the use of school buildings owned by the board of trustees of the school district by a charter school; making reassignment of the employees of an achievement charter school (6) outside the scope of collective bargaining;  [AB 488]

Let’s not bother to pretend this has anything to do with “smaller government,” or other pillars of conservative wisdom.  If a school is categorized as “underperforming” the local school district loses control of it and its operations.  That would be, of course,  the duly elected school board of a school district in this state – losing control of its facilities and operations to the state. Small government this isn’t. More on this point a bit later.

There are three ways a school can be removed from local authority:

Sec. 20. 1. A public school is eligible for conversion to an achievement charter school if: (a) Based upon the most recent annual report of the statewide system of accountability for public schools, the public school is an elementary school or middle school that was rated in the lowest 5 percent of elementary or middle schools in this State in pupil achievement and school performance for the most recent school year; (b) The public school is a high school that had a graduation rate for the immediately preceding school year of less than 60 percent; or (c) Pupil achievement and school performance at the public school is unsatisfactory as determined by the Department pursuant to the criteria established by regulation of the Department.

Let’s look at the first one, based on the annual report.  For all intents and purposes this categorization is based on standardized test scores. Growth measures of achievement,  status measure of achievement, and reduction in achievement gaps are all based on … test scores.  There is one other criterion, and only one other, to date, and that’s average daily attendance.  [NVDoE]

Here’s what I don’t see in the description of the measurements. Does the school serve a struggling socio-economic group?  Is the school over-crowded? Does the school have a teacher-student ratio that indicates some classes are overcrowded? How many of the youngsters are classified as in need of Special Education?  What is the transient rate in that particular school? Is the school adequately staffed with counselors, language specialists, social workers, psychologists, aides and other support personnel? If the school is a secondary one, then what does it mean to say the students are “ready for college?”  Let’s be honest here, not everyone is prepared for or even interested in a four year college program.  So, what does it mean to say a child is ready for… a vocational program? An apprenticeship program? A School to Work transition program?  We know that about 41% of American students continue their education beyond high school.  [NCES]

What of the other 60%? Does this mean that if a student elects to be a truck driver, construction worker, apprentice plumber, landscaper, or apprentice mechanic, or heavy equipment operator they “don’t count?”

What I do see is that if the kids show up and they test well then the school is said to be successful. The bias here appears to be that if the local school district isn’t churning out academically successful students, even if the school has prepared numerous and sundry mechanics, truck drivers, beauticians, file clerks, plumbers, etc., it isn’t “successful.”

A graduation rate? 60% is doable. The state average – one of the worst in the country is 63%. [LVSun] There are diploma options, for example in Clark County one can earn a standard diploma, an advanced diploma, or an advanced honors diploma. [CCSD] Students with learning disabilities can opt out of the “college and career readiness” track, and be evaluated according to their Individual Education Plan.

Statewide there are standard diplomas 63% receiving this form, advanced diplomas 27.2%, adjusted diplomas 4.8%, and certificates of attendance 4.9%. [NVASB pdf]

Nevada is a state with 37% white, 40% Hispanic, 9% black, and 1% Native American students. 19% of the students are classified as Limited English Proficient, 11% have diagnosed learning disabilities, and 54% are come from low income families. [NVASB pdf] By at least one standard – if the schools are majority low income, and the graduation rate is over 60% then some might call this successful? While it may not be ideal, it certainly doesn’t deserve the opprobrium of abject failure.

Item (c) is bureaucracy personified. A school may be declared “unsuccessful” based on Department of Education regulatory criteria. For those who purport to eschew “bureaucracy” and support “local control” by “locally elected officials” this ought to be enraging?  This isn’t small government, it’s grasping government, and personnel policy isn’t all it’s grasping.

Welcome to our accounting nightmare.  As set forth in Section 22.

“2. An achievement charter school must continue to operate in the same building in which the school operated before being converted to an achievement charter school. The board of trustees of the school district in which the school is located must provide such use of the building without compensation. While the school is operated as an achievement charter school, the governing body of the achievement charter school shall pay all costs related to the maintenance and operation of the building and the board of trustees shall pay all capital expenses.”

This is a go broke slowly scheme?  While the charter pays for the maintenance and operations, the local school board has lost control of its building and the capital expenses associated therewith.  If the school district approved a bond issue for the construction of the school (over which it now has no control) it must still pay off the bonds – without any compensation from the entity now using the facility.  But wait, there’s more…

Any financial operation from the lowliest back yard garage service to the most complex corporation has to deal with depreciation expenses, and accounts for capital replacement.  So, we have here a building on which  there are outstanding bonds or not, someone has to pay into accounts for depreciation expense, and into accounts for capital replacement – without any compensation from the charter management firm in charge of the building.  We’re not dealing with insignificant numbers here.

The Clark County School District reports $2,245,000 in depreciation expenses in 2012-2013.  Let’s assume that the “average” functional age of most schools is about 40 years, and that this functionality is dependent on (a) use and (b) renovation.  If we use straight line depreciation then we take the cost of original construction and divide it by the number of years the building is assumed to be serviceable.  If the school district, or any district, is functioning with fiscal intelligence, then the older the building the more must be added to the capital replacement accounts.

Clark County has 8 buildings constructed before 1949, 20 schools constructed during the 1950s, 39 during the 1960s, 31 during the 1970s, 23 during the 1980s, 98 during the 1990s and 119 constructed recently after 2000. [CCSD pdf]   In 1996 the Clark County School Board authorized $89 million in bonds for elementary schools (9), and $104.9 for four middle schools. [LVSun]   We can use these numbers to create an illustration of how expensive depreciation can get for a school district.  The CCSD numbers yield a cost of about $9,888,888 per elementary building included in that bond issue.  If the buildings have a life expectancy of 65 years then the depreciation for those would be $152,136 per building annually.

The way I’m reading this section of the proposed law, the Clark County School District would be responsible for the $152,136 annual depreciation expenses on a building over which it was forced to relinquish control if that school were to be declared “unsuccessful.” And, the charter management firm would be using the building without contributing to the depreciation expenses.

And, now the nightmare compounds.

“4. An achievement charter school may: (a) Acquire by construction, purchase, devise, gift, exchange or lease, or any combination of those methods, and construct, reconstruct, improve, maintain, equip and furnish any building, structure or property to be used for any of its educational purposes and the related appurtenances, easements, rights-of-way, improvements, paving, utilities, landscaping, parking facilities and lands; (b) Mortgage, pledge or otherwise encumber all or any part of its property or assets; (c) Borrow money and otherwise incur indebtedness; and (d) Use public money to purchase real property or buildings with the approval of the Achievement School District.”

Whoa Nelly!  The charter management firm may encumber, mortgage, or pledge any part of its property – the school building – on which the local school district is (a) still paying off capital construction bonds and/or (b) still paying for depreciation expenses?  In a nightmare scenario, the hypothetical  Chatter Charter Achievement School (formerly operated by the local school district) which is still being paid for – can be modified by the Chatter Charter NPO, and who books the depreciation on the renovations? Who’s on the hook for the mortgage if the Chatter Charter outfit goes bankrupt?  If the local school district is “still responsible” for the capital expenses, then is it also ultimately responsible for the  payment of capital outlays for renovation?

There’s something else here I’m not seeing.  The Charter may acquire all manner of equipment and furnishings – but can it sell off equipment and furnishings without the approval of the original donor – the local school district?   Buildings, furnishings, and equipment (anything not classified as supplies and personnel costs) may also be an integral part of the school districts accounting. In our good old fashioned double entry system of bookkeeping in this country, the non-perishable or consumable items are booked as ASSETS of the school district and thus any donation of those items (voluntary or involuntary) depletes the assets of the school district. Deplete enough assets and you deplete the capacity of the district to qualify for future financing.  

In short what we have here is a fiscal system in which the taxpayers who paid into the local school district make all the contributions and the charter firms take all the donations, just keep the floors mopped and the lights on.   Therefore, the penalty for having an unsuccessful school is not only the loss of policy control but the loss of financial assets to boot.

It’s a double whammy for any school district, and one that doesn’t appear to have been entirely thought through to the obvious financial conclusions.

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