Federal Report: Gaps In N.H.'s Oversight Of Charter School Finances, Policies

Oct 20, 2015

The state Department of Education office in Concord.
Credit Michael Brindley for NHPR

A federal review of New Hampshire’s charter school program raised concerns about gaps in state oversight when it comes to how public money is being spent.

A monitoring report of New Hampshire’s charter school program released in February found several charter schools were misusing their federal start-up grant money.

One example was a school that rented a “party bus” limousine to transport students to a symposium.

“While using transportation to take students to a symposium is an allowable use of funds, using a ‘party bus’ instead of a standard yellow school bus is an unreasonable use of funds,” the report found.

The report called on the state to “strengthen its fiscal control and fund accounting procedures to ensure allowable uses of grant funds and the development of sound fiscal control policies.”

The report found the state doesn’t review or require source documentation from the charter schools.

Charter schools “stated they were never required to provide details about any purchases beyond a brief outcome statement and that the state never asked follow-up questions or requested any documentation."

In 2010, New Hampshire received an $11.6 million, five-year federal grant to help new charter schools with start-up costs. Last year, the state sent $19.6 million in state aid to charter schools. 

State Department of Education Commissioner Virginia Barry says the state has taken steps to resolve the issues raised in the report, such as reinforcing to schools what those funds can and can't be used for.

“We meet regularly with the charter schools, and they are now aware, everyone that’s received a start-up grant in the last two years know that they cannot use consultants except for 90 days prior to the opening of the school, and they’re agreeable to that.”

Barry says since the report was released, the department has also encouraged charter schools to have someone who specializes in finance issues on their boards of trustees, but she doesn't advocate for making that a requirement.

"Charter schools are really determined to be a community-based program. It is a grassroots effort, so it's not unusual when they're putting together the composition of the board to not necessarily have someone who has a really good background in fiscal matters," she said. "Since that report, we're working really closely to be sure that they have a person financially able to help them."

"If the (state Board of Education) were to start saying you need a CPA or an accountant, it would lose the essence of what a charter school is really supposed to do," she added.

The report also found the state “does not require that (charter schools) have procurement standards or conflict of interest policies and does not provide any guidance…on developing such policies.”

Barry says cuts in the department have had an impact, and the federal grant funding a charter school administrator expired in July.

The monitoring report visited four charter schools: Mill Falls Charter in Manchester, Making Community Connections in Manchester, Next Charter School in Derry, and Great Bay eLearning Charter School in Exeter.

The monitoring report raised a number of other concerns: 

- A lack of a strategic approach from the state Department of Education to monitor charter schools.

“As of the monitoring visit, no on-site reviews had occurred,” the reports says. “Rather, the charter schools visited indicated (state Department of Education) staff visit schools for celebrations or to drop in informally.”

“All charter schools are required to submit annual reports, but the (state) does not have a schedule or selection strategy in place for on-site monitoring,” the report added

- The monitoring team raised concerns about a potential conflict of interest at one charter school, which is operated by a separate nonprofit education foundation.

"The non-profit foundation requires that the school use the non-profit’s services in the form of a part-time Executive Director to oversee the school and a part-time academic coach paid for by the subgrant. Both of these staff members are employees of the non-profit. The principal of the school reports to the Executive Director of the non-profit, and not to the school’s Board, "the report states. "The monitoring team is concerned with the appearance that the school may not be governed under public supervision because the principal reports to the non-profit rather than the school board."

School application procedures may create barriers to admission.

Three of the four charter schools the review team visited "required students to undergo application procedures that lasted up to several weeks and included essays and interviews. A parent at one of these three subgrantees requiring extensive application procedures stated that she believes the application process could be a deterrent for some parents with limited literacy skills."

The report outlined the application process at one school: I. Application. II.  Conversation, III. Review, and IV. Notification. The application, which was described in a five-page document titled “Enrollment,” includes the family’s reasons for applying to the charter school. The second step involves a conversation where applicants who successfully past round one would have to articulate how they will benefit from the school’s mission. The third step, Review, consists of a committee to review all applications. The committee review criteria includes an assessment of whether, based on history, the student would be unsuccessful at the school and whether, based on history, the student would require supports and structures in excess of those that the school can provide.

- Inappropriate requests for information regarding students with disabilities.

"The monitoring team found that the (charter schools) visited request information about a student’s IEP status during the application process. The (state) confirmed that this practice is in place to ensure that students appropriately receive special education services. The monitoring team is concerned that requesting this information prior to enrollment may influence a student’s desire to attend a charter school and/or acceptance to a charter school. 

In one particularly challenging example, the monitoring team found that students with IEPs may face a lengthy application process because the charter school requires an IEP meeting with the previous school before the student can be admitted. Thus, the admission process for a student with an IEP may take several weeks, and this is contingent on how soon the charter school would be able to schedule a meeting with the sending school."

New Hampshire Charter School Monitoring Report