News Analysis: Money woes test some start-up charter schools

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ATLANTA --- The red ink on many charter schools' report cards aren't from poor academic grades but from money challenges, though recent legislation is easing some of those difficulties just as dozens of groups try to start new ones.

A study highlighting the financial woes of the start-ups stirred a hornets nest. Charter school supporters complained that news reports about it provided ammunition to opponents.

"Charter schools aren't having money problems because of mismanagement. They're having money problems because of lack of funding," said Tony Roberts, the chief executive of the Georgia Charter Schools Association.

He vented during a meeting of the Georgia Board of Education's Charter Schools Committee and found a sympathetic audience. The committee voted to expedite funding for two start-ups and to issue $400,000 federal grants to four others wanting to get started.

THE STUDY by Georgia State University professor Cynthia S. Searcy found that 40 percent of the start-up schools operated in the red during the 2006-07 school year, the most recent in which complete data were available. Two closed in that period, one for purely financial reasons.

The Georgia Department of Audits found the same ratio in its March analysis. Half of the eight charter schools that have failed since 1993, when charters became allowable, attributed their closure to financial reasons.

"Given the budget crisis all schools are facing, we need to have more conversations on how to help charter schools reduce costs or enhance revenues if we expect to use them as vehicles for educational innovation," Dr. Searcy said. The auditors reached the same conclusion.

Charter schools are public schools given considerable latitude when it comes to state rules about such things as hours of instruction, pupils per classroom and curriculum. The schools are governed instead by a custom contract of charter.

If the students don't meet performance standards spelled out in the contract, the schools can be closed.

MANY schools switch to charter status, some because teachers want to try new strategies, and some because they are failing and looking for some salvation.

These "conversion" charter schools haven't drawn much criticism. Start-ups have. They're launched by parents or community leaders eager to try something different.

One of the most controversial start-ups is Lake Oconee Academy, conceived by the residents of the posh, gated community of Reynolds Plantation. Opponents have described it as nothing more than a taxpayer-funded private school. The U.S. Department of Education was reluctant to let it open until state officials made clear that Georgia law requires all charter schools to accept any student, just like any other public school.

Start-up charter schools have enjoyed greater success on the measures of adequate yearly progress set out by the federal No Child Left Behind Act.

"Interestingly, if you break out charter schools by type, start-up schools had the highest rate of AYP at over 81 percent. The conversions had the lowest rate, around 70 percent," said Andrew Broy, the state Education Department staffer who oversees charter schools. "One of the reasons is because we have had, in the past year or two, several public schools that are traditional public schools struggling convert to charter status in order to do school-improvement work, and they haven't yet made AYP."


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