Millot: Charter Agencies Outmatched By National Management Organizations?

Greg Richmond, president of the National Association of Charter School Authorizers... said Ball State University, which granted all of Imagine’s charters in Indiana, should have never done so considering the hand Imagine Schools Inc. had in the charters’ founding.... 

Kelly Soderlund and Dan Stockman, Ft Wayne Journal Gazette, November 1, 2009

(Larry Gabbert, Director of Ball State's University's Office of Charter Schools) said attorneys looked over Imagine's governance structure before the charter was issued, and everything passed the legal test.... Richmond....said it appears Ball State... failed in its duty to ensure local control. "That is absolutely unacceptable.... If the governing board is compromised, from that point on everything else has the potential to be compromised."

Soderlund and Stockman, Ft. Wayne Journal Gazette, November 2, 2009

According to the National Association of Charter School Authorizers, in 2008 Ball State's Office of Charter Schools was the nation's 27th largest chartering agency, when measured by the number of schools it oversees.  The top 50 agencies oversee just over half of the nation's 4600 schools. Most of these agencies have a less than ten full time staff.  With nine employees Ball State's Office is a relatively well-staffed agency.

Director Gabbert joined the office in 2006, after a career in Delaware's Department of Education, including its charter school program. He holds a Doctorate in Education, and is a specialist in student assessment. One secretary serves the entire office.

Three Coordinators oversee charter school accountability for student performance, special education, and finance. Each has relevant degrees and work experience.

Direct relations with the 34 schools chartered by Ball State are managed by three Field Representatives. One earned her Masters in School Administration and founded a charter school. A second comes out of higher education and has Bachelor of Arts in English. The third has a Masters in Educational Administration and Supervision, and served 25 years as an elementary and secondary school teacher.

One Systems and Contract Specialist "[p]rovide(s) systems and contracts support to the Office of Charter Schools staff and the charter schools that Ball State University sponsors.  This includes administration of the documentation, monitoring, and reporting of the compliance and legal information as outlined in the charter contracts.  This employee is the coordinator of the day to day operations and training for the Authorizer Oversight Information System (AOIS).  This person is responsible for providing the information to the Business Affairs Office and working with University Compliance regarding contracts for the newly approved charter schools, charter amendments and renewals of the currently open charter schools." The current specialist holds a Bachelors Degree of General Studies.

The range of expertise at Ball State covers the key compliance issues raised by study after study of charter schools - special ed, basic financial management, and assuring student performance. Each member of the field staff is responsible for a reasonable average of 11 schools. The Charter Office certainly  has the experience, expertise and clout required to oversee the independent community charter school envisioned by the legislators who passed Indiana's statute.

I doubt the legislature envisioned Ball State keeping tabs on an entity as complex as Imagine:

• Parent Imagine Schools, a Virginia nonprofit, lacking federal 501(c) 3 tax status; which acquired the for-profit Chancellor-Beacon Academies charter school network.

• The 74 "independent?" charter schools that contract with Imagine, the boards of which are the subject of CEO Dennis Bakke's memo, and which pay Imagine a 12 percent school management fee.

• Schoolhouse Finance, Imagine's real estate arm, which arranges the sale-leaseback financing for school buildings in Imagine's network.

• Entertainment Properties Trust (EPT) Schoolhouse (a subsidiary of Kansas Entertainment Properties Trust), which acquires school properties from Schoolhouse Finance, and to which the individual charter schools pay rent under the terms of a long-term lease.

These are the main features of Imagine's charter school network, although my own reading of various reports suggests that, in some cases, there may be other related intermediary corporations involved in individual schools' real estate transactions, and some charter schools may have direct legal ties within and across state laws.

I could spell out the mismatch of experience, expertise and clout between Ball State and Imagine, but I think it's pretty obvious. Imagine's willingness to exploit its considerable financial, organizational, legal and political capacity can't be doubted given the intent to evade nonprofit governance laws expressed in Bakke's memo to staff. I could spell out the consequences, but I've already done so.

Put this in a larger context. The forty states with charter statutes, DC, Puerto Rico and Guam have 819 active chartering agencies. 695 agencies oversee fewer than 5 schools, 125 oversee five or more, 66 over see ten or more. The 50 largest agencies oversee 2349.  If the measure of oversight capacity is the number of charter schools divided by the number of full time staff, Ball State's Office is near the top with 3.7 schools per staff member.  For the three largest authorizers with over one hundred charter schools, the average is 16 schools; agencies between fifty and ninety-nine schools average one staff person for every five schools; those between ten and forty-nine schools average one staffer for every six.

It is worth remembering that the Bakke memo was unearthed by excellent investigative journalism rather than routine agency monitoring for charter compliance. As best I can tell, watchdog reports are behind every story of Imagine violations. Absent this kind of prompting, chartering agencies are neither equipped or motivated to pursue a complex abuse of the law. 

The bottom line? The exchange between Gabbert and Richmond is academic; utterly besides the point.  If the charter school landscape we envision includes national Management Organizations, we need new laws of charter governance allowing managers to hold charters outright, or a lot more legal expertise to manage the complex statutory thicket MO's will try to avoid - and even evade. Under current statutes, most of  today's chartering agencies can't be expected to oversee E/CMOs.

Next: What kind of charter schools do the states want, and why have they sent mixed signals?