State Superintendent To Suspend Charter Authorizers That Don't Measure Up

July 7, 2014

LANSING – State Superintendent Mike Flanagan is giving notice to the state’s charter school authorizers that he will be exercising his statutory authority to end their ability to authorize future charter schools.

Flanagan said that a recent series of news articles has raised enough questions regarding the appropriate oversight by charter school authorizers that he wants to prevent those that do not measure up from contracting new charter schools.

Flanagan met with the charter school authorizers in February. He challenged them to maintain the integrity of the original promise of the charter school movement – to provide high quality education options and cultivate better outcomes, especially for low income children. He challenged them to root out the bad actors in their fold and build public confidence in the administration of their schools.

“This series of news articles has prompted me to think differently about whether to suspend an authorizer’s ability to open new charter schools,” Flanagan said. “It’s my authority in state law and I will be using it.”

Flanagan has directed staff at the Michigan Department of Education to establish rigorous principles that measure the transparency, academic, and financial practices of the charter schools of each authorizer. The result of these measures will determine which authorizers would lose their chartering capabilities.

“We are getting serious about quality choices for Michigan students,” Flanagan said. “This is not just about getting academic results. It is about total transparency and accountability.”

Flanagan received a series of letters last week from Greg Richmond, president and CEO of the National Association of Charter School Authorizers, where Richmond outlined the principles and practices that define quality charter school authorizing.

Included in those principles and practices are that authorizers should: 

• Clearly identify the school governing board as the party ultimately responsible for the success or failure of the school, and clearly define the external provider as a vendor of services;
• Prohibit the management company from selecting, approving, employing, compensating, or serving as school governing board members. In Michigan, management companies are allowed to recruit board members and are free to hire friends and relatives of board members without disclosing that information;
• Require the school governing board to directly select, retain and compensate the school attorney, accountant and audit firm. In Michigan, management companies can and often do perform this function;
• Require that payments from the authorizer to the school go to an account controlled by the school governing board, not the management company. Michigan already requires this, but management companies can and do immediately move the money out of the board-managed account;
• Require all instructional materials, furnishings, and equipment purchased or developed with public funds to be the property of the school, not the management company;
• Condition charter approval on authorizer review and approval of the management contract;
• Grant charter school renewals only to those that have achieved the standards and targets stated in the charter contract; are organizationally and fiscally viable; and have been faithful to the terms of the contract and applicable law;
• Clearly communicate to schools the criteria for charter revocation, renewal, and non-renewal decisions that are consistent with the charter contract;
• Require evidence of a management company’s educational and management success;
• Require a proposed agreement with a management company to include performance evaluation measures, fee structures, financial controls, oversight and disclosure, and renewal and termination details;
• Require a management company to disclose and explain any existing or potential conflicts of interest between the charter school governing board and proposed service provider or any affiliated business entities; 

“All authorizers, especially the boards of trustees of the colleges and universities that authorize most of the charter schools must pay better and closer attention to how their schools are operated,” Flanagan said. “The integrity of their institutions is at stake here, too.”

Flanagan is strongly encouraging Michigan’s charter school authorizers, that have not already done so, to minimally adopt the principles and practices set forth by the National Association of Charter School Authorizers as a good faith effort.

“There are many good charter schools in our state, which operate in the best interest of the students they serve and not to the best interest of the adults who run them,” Flanagan said. “The news articles over the past several weeks have heightened attention to the issues that have shrouded charter schools with suspicion and contempt among some in the education community and the public – sometimes deserved, sometimes not.”

He said the state legislature needs to review and strengthen education transparency and accountability laws for all public schools, traditional and charter schools alike.

“Let’s support what works and change what doesn’t,” Flanagan said. “We look forward to working with the state legislature to improve our state laws to prevent abuses and foster wholesome and positive education options for the families and children of Michigan.”