Sneak Preview: OIG Finds Charter School Oversight Weaknesses

November 4, 2016 | By Jerry Ashworth | Post a Comment

xsass_bookshot(The following was excerpted from a recent article in the Single Audit Information Service.) Several offices within the Department of Education (ED) plan to establish a working group that will draft guidance on minimum levels of monitoring, risk assessment and mitigation procedures that state educational agencies (SEAs) would perform at charter school subrecipients that have contractual relationships with a charter management organization (CMO) or education management organization (EMO), according to a recent ED Office of Inspector General (OIG) audit. The working group also would reassess modifications to ED’s monitoring procedures for federally funded charter schools with CMO relationships.

The OIG reviewed current and emerging risks to program objectives posed by charter schools managed by CMOs and EMOs (generally referred to by the OIG as CMOs) in relation to awards issued by ED’s Office of Elementary and Secondary Education (OESE), Office of Special Education and Rehabilitative Services (OSERS) and Office of Innovation and Improvement (OII). The audit also sought to determine what internal controls these offices maintain to address these risks. For its audit, OIG reviewed how the ED offices monitored 33 charter schools in six states.

Charter schools may receive federal formula funding directly under Elementary and Secondary Education Act Title I (as amended by the Every Student Succeeds Act) grants, School Improvement Grants (SIG) and Individuals with Disabilities Education Improvement Act (IDEA) grants. They also may receive funding directly under discretionary grants under the Charter Schools Program Non-State Educational Agencies (CSP Non-SEA) grant program or the CSP Replication and Expansion grant program; or as a subaward under discretionary grants to SEAs under the Charter Schools Program. The charter schools that the OIG reviewed received pass-through grant funding from the states.

CMOs are organizations that operate or manage one or more charter schools, whether under contract or as charter holders. According to the audit, proponents of CMOs claim that “a network approach enables quick charter school growth that can potentially influence greater change at district-run schools.” However, opponents argue that outsourcing to CMOs “results in already limited school resources being directed for service fees, profits or both, while creating another level of administration.”

(The full version of this story has now been made available to all for a limited time on Thompson’s Grants Compliance Expert site.)

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