LAUSD Steps Up Oversight Of Stumbling Charters

06/26/2011 01:43 pm ET | Updated Aug 26, 2011

LOS ANGELES — The auditorium at the Los Angeles Unified school board was awash in varying shades of blue shirts at a recent meeting – sky blue belonged to parents from Crescendo Schools, while navy was worn by parents from ICEF Public Schools. Outside, another group of parents chanted and waved picket signs to "save ICEF schools."

Both groups donned their school colors and showed up for the same reason – to prevent their troubled charter schools from shutdown, a result of cheating on state tests at Crescendo and fiscal bungling at ICEF.

"Our kids are innocent," said Noami Neal, mother of a Crescendo third-grader. "It was not their fault, it was the adults."

It's been a rocky year for charters in Los Angeles Unified, which hosts the most charter schools of any district in the nation – 183 currently, with roughly another 20 slated to open in the fall. Besides financial mismanagement and the cheating scandal, a principal at another charter was sent to prison for embezzlement and another school was closed for a poor academic record.

The run of problems has forced the district to step up oversight and take a tougher stance on the publicly funded, independent schools.

"This has been a year of reflection of how we can prevent some of these things from happening," said Parker Hudnut, who headed LAUSD's innovation and charter schools division until leaving this month to take the reins at ICEF, which stands for Inner City Education Foundation.

The district sent a clear message of its new posture when it shuttered Cornerstone Prep School for abysmal student achievement earlier this year, the first closure due to academic performance.

Although the vast majority of charters operate successfully, the missteps at a handful of LAUSD schools during the past year illustrate how the autonomy at the core of charter philosophy – that freedom from district bureaucracy allows for greater innovation and higher achievement – can sometimes trip them up.

"Flexibility is the tradeoff for accountability," said Jeanne Allen, president of the Center for Education Reform.

The key is catching problems before schools derail. About 12 percent of charters have closed since 1992, according to a 2009 study by Allen's organization.

Regulations governing charters differ among states. In the District of Columbia, for example, a separate school board authorizes charters and monitors them. In New York, an independent institute at the State University of New York has the responsibility, while the mayor's office holds that duty in Indianapolis.

In California, which has 900 charters – the most of any state in the nation, the local school district is responsible for authorizing and overseeing charters. That can be problematic because charters are often viewed as rivals to traditional schools.

"School districts don't want charters to exist and they're in charge of overseeing them," said Greg Richmond, executive director of the National Association of Charter School Authorizers, which represents charter regulators. "That just sets up constant problems. Charters accuse districts of picking on them and fight everything they do."

Advocates of the alternative schools say districts are hostile to the point of flouting laws that allow charters to use district facilities, such as classrooms and playing fields. The state also does not allow charters to access the same financing mechanisms as districts.

"There's plenty of oversight," said Caprice Young, former chief executive of ICEF brought in last fall to right listing finances and former executive director of the California Charter Schools Association. "The problem is the state and districts throw barriers in the way."

Still, Young suggested that if LAUSD had been paying closer attention to ICEF's required quarterly financial statements, the 15-school organization may not have ended up in such a deep financial pit. ICEF, which is widely hailed for sending more than 90 percent of its inner-city students to college, was saved by philanthropists and is merging with another management organization.

Supervising charters involves poring over audits and financial statements, as well as reviewing test scores and other measures of achievement. Financial mismanagement accounts for about 40 percent of closures. Experts say that's because most charters are launched by educators, not accountants.

LAUSD has 20 staffers supervising charters. After the ICEF fiasco, Hudnut said the office has been reorganized to form four teams of three people with each team responsible for overseeing about 60 schools, accounting for future growth.

To help plow through slews of financial reports, the office is contracting outside accountants to scrutinize the statements to pinpoint trouble spots, leaving in-house accountants to follow up.

The additional scrutiny is designed to ferret out everything from overspending to malfeasance, which was the case at another LAUSD charter, New Academy Canoga Park in the San Fernando Valley, where the school's board alerted district officials to possible wrongdoing.

A subsequent district audit found $3 million unaccounted for from 2007 to 2009. Principal Edward Fiszer was sentenced to five years in prison last December after pleading guilty to embezzling $1.4 million to play the stock market. The school was allowed to remain open after adopting a series of financial safeguards.

Some problems are difficult to detect. At Crescendo Schools last year, the then-executive director instructed principals at six schools to show teachers state standardized tests, give students quizzes based on test questions and deny seeing the test if asked. Two teachers called the district to report the cheating, which led the state to invalidate the schools' 2010 scores.

After moving to shut down the six schools, the district pulled back after the responsible administrators were removed and other reforms put in place.

Experts note that traditional schools run into misconduct and other problems, too, but say charters are held more accountable.

"Bad charter schools are easier to shut down," said Robin Lake, associate director of the University of Washington's Center on Reinventing Public Education. "With bad traditional schools, it's just assumed they'll go on into perpetuity."

Still, closures are politically difficult with school boards and other authorizers facing hordes of anxious parents pleading to keep their school open.

"It's not particularly easy. Closure is a very blunt instrument," said Hudnut. "These are parents who believe in their students. It's very, very personal for them, but they often have little idea of what we're dealing with."

Crescendo parents, who erupted in loud applause and cries of "amen" when district Superintendent John Deasy recently announced that the schools would most likely remain open, saw the test cheating as a separate issue from their kids' education.

"It was wrong," said parent Neal of the cheating. "But my daughter is learning the piano. She has dance and singing, all kinds of things. I was really hoping the school would stay open. We need that school."

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