Three Reasons to Dismiss the Biased Report on New York ‘Charter School Fraud’

Published December 10, 2014

According to some activists, charter schools are the villain in the nation’s current education narrative. 

Case in point: The Center for Popular Democracy and the Alliance for Quality Education released a report in November recommending stricter oversight and monitoring of charter schools. The report, “Risking Public Money: New York Charter School Fraud Best Practices to Protect Public Dollars & Prevent Financial Mismanagement,” cites instances of misconduct and inappropriate spending at a charter school in New York.

The report, however, has serious flaws. First, the two organizations that wrote the report have ties to teachers unions who oppose charter schools based on the misinformed notion public charter schools unfairly siphon money away from traditional public schools. At no point does the article acknowledge charter schools are public schools. Charter schools are allowed some freedom in an effort to allow flexibility and innovation, but they are still accountable to both the government and, crucially, to parents.

That, in fact, is the essence and purpose of charter schools, and at no point have charter schools been under less government scrutiny than public schools regarding spending, corruption, or any other legal matter. Charter schools are held to the same standards as all public schools in those regards, and charter schools are required to give data to the state and federal government just as traditional public schools are.

A second flaw is that the report states the following: “Based on conservative estimates, New York could stand to lose $54 million in charter school fraud in 2014 alone.*” The footnote states, “Using the methodology employed by the Association for Certified Fraud Examiners 2014 Report to Nations on Occupational Fraud and Abuse to determine the total amount of fraud globally, we estimate New York’s charter schools may have experienced $54 million in fraud in 2014 alone. Assumes 5 percent of total revenues lost to fraud. Calculation uses total New York charter school revenue for 2014 at $1.08 billion. Total revenue is derived from the 2013/2014 preliminary estimate for state aid published by the New York State Department of Education. Total fraud, waste, and mismanaged funds found in audits examined for this report totals $28.2 million.”

As the footnote clearly indicates, the biggest, clearest finding in this report is based on the entirely unsupported assumption that five percent of total charter school revenue is lost to fraud. This may be a conservative estimate, as the report claims, or those numbers may be wildly overstated. Either way, the amount of alleged waste and mismanagement of funds by charter schools is based on an assumption that the waste and mismanagement exits in the first place, the very thing the report is claiming to prove. That is an obvious subterfuge known as circular reasoning, and for a report to make such strong recommendations as this one does, it is only fair to expect it to be based on facts rather than completely unsupported assumptions.

The third and final reason this report is nonsense is in the essential information it leaves out. The report makes it seem as if there is no corruption, financial mismanagement, waste, or wrongdoing at all in traditional public schools. Charter schools are presented as the only offenders, the only culprits in need of being stopped. This is entirely false and is insulting to the reader’s intelligence. A simple Internet search will quickly reveal a multitude of instances of corruption, overspending, and misconduct in traditional public schools.

Neither traditional public schools nor public charter schools are immune to such problems, and no form of school ever will be. The relevant question is this: Which form is more adaptable and responsive to the needs of children and parents’ concerns? The facts show charter schools win that contest hands-down, as the long waiting lists and encomia from happy children and parents attest.

That success, of course, is why these union-backed organizations felt forced to cherry-pick and falsify data to condemn charter schools. The nation’s children deserve better than that.