Perdido 03

Perdido 03

Sunday, May 11, 2014

Daily News Goes After The Little Charter School Crooks But Leaves Big Ones Like Moskowitz And Kenny Alone

One of the lines you sometimes here from charter school proponents and supporters - charters must be free from the same regulations as public schools so they can do their magical "innovation" thing.

Of course a lack of regulations also can lead to this:

On a quiet Ditmas Park side street, taxpayers shell out $2.3 million a year to lease space from the Catholic Church for a charter school called Brooklyn Dreams.

What’s shrouded in a cloak of secrecy is whether the arrangement is a good deal for the taxpayer.
That’s because a for-profit firm called National Heritage Academies acts as a middleman, renting space from the church at rates it calls “private.” Then NHA sublets the space to Brooklyn Dreams.
The firm charges the school $46.99 per square foot — much more than the $14.25 to $25.50 per square foot the city typically pays to lease school space from the church.

In effect, the for-profit company is charging the taxpayers at a far higher rate— in some cases more than double — than what the city would normally pay to rent space for public schools.
If Brooklyn Dreams paid the church directly at the city’s top rate, the city would still save another $1 million a year — money that could go to aid students. Neither NHA nor the church would say how much NHA was paying the diocese.

“We are not releasing terms of these private contracts,” said Matt Maguire, an NHA spokesman, also declining to discuss a nearly identical sublet deal they have with another charter school, Brooklyn Scholars. NHA charges that school $37.15 per square foot.

Maguire justified the “private” deal by saying the buildings were “empty and fallow” and NHA “invested millions of dollars to make them a suitable environment for teaching and learning.”

What troubles fiscal watchdogs is that while NHA dubs this arrangement “private,” every penny involved is taxpayer money.

According to the Daily News article, taxpayers foot the bill for 70 charter schools that are leasing space from private entities (and this is before the Cuomo-directed law that forces the city to pay rent for all charters or give them space in public school buildings.)

Acting as a middleman for charter schools is turning into a lucrative business for some:

Each year dozens of for-profit vendors are paid by charters, including accountants, financial advisors and real estate brokers. One company, the Manhattan-based Charter School Business Management Inc., has experienced 176% growth since 2009, with revenue growing from $1.4 million to $3.8 million in 2012.

With little regulation and oversight of charters, it's difficult to know how these contracts are awarded or if there's any conflicts of interest involved.

Daniel Dromm, chairman of the education committee in the City Council, wants to shine a little light on this process - and for once, the Daily News seems to want to help.

Usually the News attacks anybody who questions charter schools in any way, but this time around, they seem ready to expose the charter school "middlemen" practices and corruption by charter boards - stuff like this:

The News found a pattern of weak oversight makes it difficult to know if taxpayers are getting the best bang for their buck with the city’s 183 charter schools.

In recent years city charter schools have endured a multitude of embarrassing incidents involving conflicts of interest and financial chicanery.

Charter boards have hired relatives, put themselves on the payroll or paid principals lavishly. Charter business managers have run up personal expenses on school credit cards. Auditors have found schools that simply couldn’t account for how they’d spent hundreds of thousands of public dollars.

Some schools use their tax dollars to hire non-profit or for-profit firms to manage their affairs or rent them space. Some of these firms have been criticized for inflating rent or charging exorbitant fees for services that are difficult to quantify. Some have lent out money to the schools at excessive interest rates.

Of course, wait until some of the bigger charters start to get some scrutiny - let's see if they're still on board when Eva Moskowitz and Success Academies or Deborah Kenny and Harlem Village Academies is on the other end of the sunlight.

They seem happy to go at the little charter school crooks, but a little less eager to scrutinize Eva Moskowitz or Deborah Kenny and their business practices, salaries, etc.

I'm glad to see them go after charter school corruption here in the city, but they need to take a closer look at the big charter operators like Success, KIPP, Harlem Village, etc. too.


  1. Are charter schools subject to any regulation and oversight?

    1. Under the new budget requirements, they are. City comptroller has oversight and auditing duties.

    2. Didn't a New York State court rule that charters were private entities and not subject to audits? I am confused.

    3. Budget changed that, giving comptrollers auditing powers.

  2. This is just culling the herd, getting rid of the mom-and-pop corruption, so the Big Guys (Success Academies, KIPP, Uncommon Schools) can exert their economies of scale magic...

    1. I think that's exactly right, Michael. This way there's more money for the connected crooks like Moskowitz.