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Thursday, July 25, 2013

Three Reasons Why PCBS’s Charter Audit Resource Management (CHARM) Report Matters

We released a joint report with OSSE and OCFCO about the financial health of the District’s charter schools, better known as CHARM.  The CHARM report found fewer DC public charter schools have financial problems.  This shows our early detection process is working well, and here are three reasons why it matters:

Reason 1: CHARM is mandated by law. 

The School Reform Act of 1996 requires PCSB to review the financial health of the District’s public charter schools and to close a school for specified reasons, like fiscal mismanagement, at any time.   

Reason 2: CHARM provides accountability. 

The collaboration between PCSB and two District agencies--with some responsibilities for charter school finance--shows a collective commitment to truly holding charter schools accountable for their fiscal health. 

 Reason 3:  CHARM delivers transparency. 

CHARM provides a snapshot of each DC public charter school financials.   It also provides schools with a summary of the financial audit with recommendations going forward.  This early warning system allows us to work with charter schools way before it becomes a distraction to students and families. 

Posted by: PCSB at 9 a.m.
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Wednesday, May 01, 2013

Mid-Year Transfers: Funding Myths Busted

It’s budget season in DC and the Washington Post recently ran this story about how DC schools are funded.

The piece described how charters are paid based on actual enrollment, while DCPS is paid based on estimates:

Also, charter schools are paid according to their actual audited enrollment. But traditional schools are funded based on projected enrollments, which tend to be overly optimistic. FOCUS estimates that the school system received $142 million between 2009 and 2013 for students it did not actually enroll.

For years, school system officials have maintained that the cushion helps them deal with an influx of students, many from charter schools, who come after enrollment counts are finalized in October. Unlike charter schools, traditional schools are legally obligated to serve all students — just one of many ways in which the two sectors operate under different rules.

When I first started at PCSB I was told that "thousands" of students flowed into DCPS each year after the enrollment count, and hence the over estimation was somehow justified as paying for students who arrive mid-year.  

While it’s true that students do transition between schools mid-year, these numbers have been greatly overblown.  But while thousands of students enter DCPS mid-year (3,697 to be exact), thousands leave mid-year as well (3,359 students).  According to this mobility study by the Office of the State Superintendent (OSSE), the net gain in DCPS mid-year for the most recent school year was just 338 students.  We could fully reimburse DCPS for these mid-year students for about $3M per year, but the overestimation adds up to ten times this amount!

The facts are clear: the supposed influx of thousands of students is in reality a few hundred, and the funding cushion is at least ten times larger than it needs to be to accommodate for those students that switch schools.

What we need, and need urgently, is to fundamentally revise the payment process.  Both charters and DCPS should be paid based on actual numbers.  And rather than rely on a single count of students in October to set the payment, there should be multiple counts throughout the year to ensure that schools who add students are properly compensated.  This is common sense reform that ensures equality and proper incentives.

As an aside, the OSSE mobility study is worth looking at closely because it bursts so many myths. For example, of the 3,697 who entered DCPS mid-year, just 561 transferred from a charter school.  Indeed most students who leave charter schools mid-year do so because they are moving out of state.

Posted by: Scott Pearson at
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