Charter schools misspend millions of Ohio tax dollars as efforts to police them are privatized
No sector — not local governments, school districts, court systems, public universities or hospitals — misspends tax dollars like charter schools in Ohio.
A Beacon Journal review of 4,263 audits released last year by State Auditor Dave Yost’s office indicates charter schools misspend public money nearly four times more often than any other type of taxpayer-funded agency.
Since 2001, state auditors have uncovered $27.3 million improperly spent by charter schools, many run by for-profit companies, enrolling thousands of children and producing academic results that rival the worst in the nation.
And the extent of the misspending could be far higher.
That’s because Yost and his predecessors, unable to audit all charter schools with limited staffing and overwhelmed by the dramatic growth in the schools, have farmed out most charter-school audits to private accounting firms.
Last year, these private firms found misspending in one of the 200 audits of charter schools they conducted, or half of 1 percent, while the state’s own police force of auditors found misspending in one of six audits, or 17 percent of the time.
“You don’t even have to understand audits to know that something is broken there,” said Kyle Serrette, director of Education at the Center for Popular Democracy.
The Center for Popular Democracy, based in Washington, D.C., is allied with teachers unions that generally oppose privatization in public education.
In a report released in April, the nonprofit watchdog detailed $200 million in waste, fraud and abuse in charter schools in Ohio and 14 other states.
Serrette said none of the 43 states with charter schools has created an accountability system designed to catch fraud. But Ohio has all of the telltale flaws, and more.
Because the money must first be spent, audits are conducted years after public funds go missing.
“[Financial] audits are historical. They’re not out in front of these things,” said Robert Hinkle, Ohio’s deputy state auditor.
And the audits, which note potential fraud but give no actionable opinion, aren’t designed to detect fraud. They merely check revenues against expenses, ensuring tax dollars going in match receipts and cash balances.
Often, though, the receipts are unavailable.
“You have a system in Ohio, and everywhere else, where every single year charter school operators are getting audited. And every single year, those audits come up clean. It’s because they are not set up to catch fraud waste and abuse,” Serrette said.
And finally, there has been a historical lack of political will to strengthen state law so auditors can delve more deeply into the private contracts that charter schools enter.
“Every year, state lawmakers fail to … take the evidence that [the media] is providing and change that into law that would improve the system,” Serrette said.
Of the 10 charter schools responsible for the most misspending, all but one closed. The money likely never will be retrieved.
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