Report estimates as much as $27.7 million in Illinois charter school fraud

Charter School Vulnerabilities to Waste, Fraud, and Abuse | Center for Popular Democracy:

Report estimates as much as $27.7 million in Illinois charter school fraud

NEA President Lily Eskelsen García demands real oversight, transparency, accountability

in charter industry 

WASHINGTON—The Center for Popular Democracy (CPD) has uncovered massive oversight deficiencies and found at least $13.1 million in proven or suspected fraud in the charter school industry in Illinois. This is the latest from a series of state-specific follow-ups to its whistle-blowing May 2014 report, Charter School Vulnerabilities to Waste, Fraud, and Abuse. Today’s report, focusing on the Illinois charter school industry, alleges that this number may be as high as an estimated $27.7 million in possible fraud in 2014 alone and finds that Illinois has no system in place for monitoring charter school projects.

“Here is yet another state where lawmakers continue to dump massive amounts of public school funds into the charter industry, yet no one is held accountable at any stage of the funding pipeline,” said NEA President Lily Eskelsen García. “Operators continue to line their pockets unchecked while public schools are forced to slash programs due to lack of funding. Lawmakers need to stop treating education budgets like a slush fund for corporate charter school operators and hold them accountable to the students and communities they are supposed to be serving.”

The CPD report, Illinois’ Charter School Fraud Risk Problem, identifies three fundamental flaws with Illinois’ oversight of its charter schools:

• Oversight depends heavily on whistleblowers and reporting by the charters themselves;
• General auditing techniques commissioned by the charters are not specifically designed to uncover fraud, only inaccuracies and inefficiencies; and
• Government agencies in Illinois tasked with investigating fraud are severely understaffed.

Despite instances of proven and suspected fraud and the inability to show real improvement in student achievement, Illinois charter schools have seen enrollment grow by 680 percent and funds continue to pour in. Chicago Public Schools’ budget for its charter schools is $616 million for fiscal year 2015, an increase of 15 percent compared to 2014.

“Illinois students, their families, and taxpayers cannot afford to keep losing millions of dollars in public funds at the hands of charter school operators, who essentially enforce their own rules. It’s time for the Illinois legislature, State Board of Education, and authorizers like Chicago Public Schools to step in and make sure these operators use the funds they are given to fulfill their own promises of a great education for their students,” said Eskelsen García. “There should be a sound structure for oversight and accountability whenever taxpayer dollars are applied.”

CPD recommends that the state of Illinois make major changes to its current oversight structure, including mandated audits designed to detect and prevent fraud; increased transparency and accountability; and a state-imposed moratorium on new charter schools until the state oversight system has adequately reformed.

“It’s time Illinois and all states are able to assure taxpayers that their charter oversight systems are airtight and dedicated to quality and community,” said Eskelsen García.

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The National Education Association is the nation's largest professional employee organization, representing nearly 3 million elementary and secondary teachers, higher education faculty, education support professionals, school administrators, retired educators, and students preparing

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