Finding 1: OII Did Not Conduct Effective Oversight of Grantees Receiving Charter School Grants

Late in 2010 near the end of his second term, Gov. Phil Bredesen of TN worked up the courage to suggest shutting down one of Tennessee's unnecessary private prisons run by CCA.  When the new governor, Bill Haslam, swept into office with the backing of CCA and ALEC, the plan to shut down the CCA facility in West Tennessee was quickly cancelled, even though Haslam admitted to reporters that the the prison was not needed, and even though Haslam cut $20 million from public colleges and $40 million from Medicaid patients to come up with the $31 million to pay for it.  When asked to respond, Bredesen quipped, "business wants government to act like a business except when they act like a business."

As we now contemplate the significance of Mitt Romney's Gatorade and canned yams relief supplies that he is sending to the Jersey shore to curb the economic pain of starting over from scratch, Bredesen's response to Haslam's public largesse for Corrections Corporation of America is worth keeping in mind.  This kind of dopey hypocrisy is symptomatic of the Right's view of government: when government must respond to public need, we can't trust it because we know government is a bunch of corrupt, free-spending incompetents who can't be trusted.  On the other hand, those same incompetent, free-spending incompetents are just what the private sector expects and demands when it comes to opening up the public safe privatize public services.  See Bill Haslam.

Or see the 2010 OIG  report here on federal non-oversight of charter welfare schools, or see the post on the most recent OIG Report entitled "The Office of Innovation and Improvement’s Oversight and Monitoring of the Charter Schools Program’s Planning and Implementation Grants."  

The OIG examined records in three states: Florida, California, and Arizona.  Amounts of grants below:

Some highlights from the Finding 1 of the Report:

FINDING NO. 1 – OII Did Not Conduct Effective Oversight of Grantees Receiving

the SEA and Non-SEA Grants

OII did not conduct effective oversight of SEAs [State Education Agencies] and charter schools receiving the SEA and non-SEA grants.  Specifically, we found that OII did not

 require that grantees and subgrantees develop corrective action plans to address monitoring

issues and deficiencies identified,

 have a risk-based approach for selecting non-SEA grantees for monitoring, or

 adequately review SEA and non-SEA grantees’ fiscal activities.

Lack of an Adequate Corrective Action Plan Process

OII did not require that grantees and subgrantees develop corrective action plans to address

monitoring issues and deficiencies identified in WestEd’s monitoring reports. This occurred

because OII did not have policies and procedures in place to ensure grantees corrected

deficiencies noted in monitoring reports. In addition, OII did not follow up effectively on issues

identified in monitoring reports. OII did not take any alternative means to ensure corrective

action took place, such as including followup activities in the WestEd contract if OII did not

have adequate resources to perform this function itself. As a result, OII was unaware of whether

grantees and subgrantees took corrective actions to address issues that WestEd identified in its

monitoring reports. . . . .

Florida Monitoring Report

The Florida SEA’s first monitoring report, issued in November 2008, identified many serious

deficiencies that were similar to issues we identified during our audit (Finding No. 2). OII made

its only documented followup phone call to the Florida SEA in April 2011 (29 months later),

regarding the deficiencies noted in the monitoring report. According to OII’s documentation, all

deficiencies noted in the 2008 monitoring report were deemed “resolved” without any supporting

documentation. Since our audit work identified issues similar to the deficiencies WestEd

identified in 2008, we concluded that OII’s determination that all identified deficiencies were

resolved was not accurate. Both WestEd and our audit noted that Florida left most subgrantee

monitoring to the LEAs. Further, OII’s followup phone call process was not effective for

ensuring deficiencies identified in WestEd’s monitoring reports were correctly resolved.

In addition, by the time OII made its documented followup phone call to the Florida SEA to

address deficiencies identified in 2008, WestEd had already conducted its second monitoring

visit of the Florida SEA in February 2011. In fact, according to OII documentation, WestEd’s

February 2011 monitoring visit was mentioned during that followup phone call. WestEd went

on to issue its second report in July 2011. We concluded that OII waited for WestEd to conduct

its second monitoring visit of Florida, almost 3 years after the first one was conducted, before

following up with deficiencies noted on the first monitoring report. The revisit monitoring report

did not note any serious deficiencies in Florida, finding that “Florida has demonstrated the

necessary program management and fiscal controls to meet the application’s objectives.” Our

audit work in the Florida SEA found the contrary.. . . .

For recipients of the non-SEA grant, we reviewed charter schools in Arizona that received the

non-SEA grant during the fiscal years 2007–2010. Of the 17 charter schools in Arizona that

received the non-SEA grant during the fiscal years 2007–2010, 11 received WestEd monitoring

visits. We examined the monitoring reports for all 11 charter schools as part of our audit. For

the 11 monitoring reports we examined, OII could not provide support for any corrective actions

to rectify the significant deficiencies noted. Significant deficiencies WestEd noted in its

monitoring reports of these 11 charter schools included (1) Federal definition of a charter school

was not met; (2) parents and other members of the community were not involved in the planning,

design, and implementation of the school; (3) lack of a high‐quality strategy for assessing the

achievement of the non-SEA grant objectives; (4) uses of Charter School Program funds were

not allowable, allocable, and reasonable; (5) lack of fiscal control and fund accounting

procedures; and (6) financial and programmatic records related to the Charter School Program

funds were not adequately maintained. OII did not have documentation in its files to support

adequate followup to the non-SEA charter school grantees. OII did not require any of the charter

schools to develop corrective action plans in response to the WestEd monitoring reports.

OII did not implement an adequate corrective action plan for SEA or non-SEA grantees to ensure

they corrected instances of noncompliance noted in the WestEd monitoring reports. OII stated

that, for SEA grant recipients, it was the SEA’s responsibility to verify whether its subgrantees

complied with applicable laws and regulations. OII’s use of followup phone calls to grantees did

not ensure the grantees would resolve significant deficiencies identified in WestEd monitoring

reports in a reasonable amount of time.. . . .

OII did not review SEA and non-SEA grantees’ fiscal activities as part of its monitoring

activities. Specifically, OII could not provide evidence that grantee’s expenditure information

was reviewed as required by the Department’s “Handbook for the Discretionary Grant Process,” . . .

For the three SEA grantees we reviewed, OII could not provide evidence that it reviewed

expenditure information using the Department’s grants management system (G5) as required.7

OII officials stated that they reconciled expenditures with G5 annually; however, we could not

find adequate evidence in the SEA grantee folders that OII performed this activity. The OII

Charter School Division director stated that OII needed to improve their process for collecting

and reconciling expenditures with information in the G5 system.

For the 11 non-SEA grantees we reviewed, OII could not provide evidence that it reviewed

expenditure information using the G5 system as required. . . . .

Because OII did not (1) require that grantees and subgrantees develop corrective action plans to

address monitoring issues and deficiencies, (2) have a risk-based approach for selecting non-

SEA grantees for monitoring, and (3) adequately monitor fiscal activities, there is a heightened

risk that grantees were not fully complying with program goals and objectives as well as Federal

laws and regulations. As a result, there is increased risk that Department funds were not used for

the intent and purpose of the program

TRACK ME!

When corporate education antiquarians reformers talk about the virtues of charter schools, high on their list is charter freedom from bureaucratic red tape and regulations that rule the "government" schools.  Without such restrictions, the story goes, charter schools are free to innovate, adapt to changing needs locally, and improve learning.  Sounds great, right?

What this means in reality is that charter school corporations, both nonprofit and forprofit, are unconstrained in opening schools in any discarded shell of a building, without libraries, gyms, art rooms, clinics, or any of the other humanizing elements we associate with public schools in the suburbs.   They are also without restraint in the way they hire and fire teachers without due process, unregulated in the way they deal with parents or keep their books, and most importantly, they are unregulated in the way they run these urban reform schools based on a 19th Century instructional model and an 18th Century behavioral catechism.

 Children with special education plans (IEPs) are left without special education teachers, and children who cannot read are dumped into classes where all children are treated with the same distant disregard that the lockdown behavioral system requires.

I recently visited one of these chain gangs (location anonymous to protect the person who made my visit possible), where I found these same realities.  What impressed me first was the "library," which was comprised of a single deserted cart, and not a book cart, of paperbacks in the most distant corner of the commons area on the first floor.

I saw classes run by TFA teachers who acted more like detached prison guards than teachers.  The closest they came to students was to sign their discipline forms that offenders carried from class to class. Their most obvious concern was a form of behavior that required total compliance, and in one class a sixth grader who could not read looked on as the over-animated TFAer expostulated on the vagaries of correlative conjunctions.  When a child's attention strayed from the "teacher," she responded with a sharp "TRACK ME!  All students snapped to attention in their seats, leaning forward slightly with hands folded, and staring intently at the teacher as she moved across the front of the room.

So while the students in these schools that no middle class parent would allow their children are doing lots of TRACKING, we find now what we knew all along:  no one, from the U. S, Dept. of Ed on down, is tracking the scammers and corporate welfare kings whose school businesses are draining public school coffers while effectively resegregating African-American children in corporate-run reform schools.  (Remember the $212,000,000 hole that will be created in Memphis during the next five years for the massive charter expansion?)

Yesterday a story emerged on a recent federal audit of the U. S. Department of Education's Office of Innovation and Improvement (OII) run by corporate stooge, Jim Shelton.  In recent years the OII, which is directed by Gates and Broad, has gone all in on charters as the best tool for segregated corporatization of urban schools.  Since 2007, OII has handed over $909,000,000 to state education agencies (SEAs) and others (non-SEAs) to open and run charter schools.  And true to the Wall Street philosophy of free and unrestricted greed, the OII has provided no oversight, no regulation, and almost no guidance for the hundreds of millions OII is shoveling to the corporate welfare kings who are operating these urban penal schools. Click chart to enlarge.

Below is the sobering summary of the OIG report findings, which will be presented in more detail in the coming days.  You may download the report here.

We determined that OII did not effectively oversee and monitor the Charter School Program grantees and did not have an adequate process to ensure SEAs conducted effective oversight and monitoring over subgrantees. Specifically, OII did not have an adequate corrective action plan process in place to ensure grantees were correcting deficiencies noted in annual monitoring reports, did not have a risk-based approach for selecting non-SEA grantees for monitoring, and did not adequately review SEA and non-SEA grantees’ fiscal activities. We also found that OII did not provide the SEAs with adequate guidance on the monitoring activities they were to conduct in order to comply with applicable Federal laws and regulations. In addition, OII did not ensure SEAs developed and implemented adequate monitoring procedures for properly handling a charter school closure. Specifically, OII did not ensure SEAs had procedures to properly account for SEA grant funds spent by closed charter schools and disposition of assets purchased with SEA grant funds in accordance with Federal regulations (p. 9).

$50 Million for CMOs

The Office of Innovation and Improvement (i3) recently announced $50 million in competitive funding for non-profit charter management organizations (CMOs).

A few interesting tidbits:

1. Only non-profit CMOs are eligible. That would exempt Imagine (although they still claim to be a nonprofit), White Hat, etc.

2. Even if Imagine claims to be a non-profit, they might be exempt because the program specifies the CMO must not have "significant issues in the areas of student safety, financial management, or statutory or regulatory compliance. For purposes of this competition, significant issue means something that did, will, or could lead to the revocation of a school's charter."

3. The applications will be awarded up to 50 points with an additional 30 bonus points possible. CMOs can earn 10 bonus points for partnering with outside funders, including philanthropic organizations. Added funds (which must be equal to or greater than 25 of the grant award) will give applicants a "competitive preference priority".

4. The grant outlines performance measures as:

1. Number of charter schools in operation around the Nation
2. The percentage of fourth- and eight-grade charter school students who are achieving at or above the proficient level on State examinations in math and reading/language arts
3. As a measure of efficiency, the Secretary will use Federal cost per student in implementing a successful school (defined as a school in operation for three or more consecutive years)

5. Unlike many other programs, the Secretary will not be taking public comment on the priorities, selection criteria, requirements, and definitions. This program is exempt from the public comment requirement because it is the first charter replication grant.

6. The Charter Schools Program budget has a $256,031,000 budget for FY 2010. This grant uses $50 million of those funds.

7. An estimated 5-8 grants will be awarded, with a range of $1 million to $15 million.

8. CMOs can also receive preferences for competitive preference priorities, including working with LEAs "in implementing academic or structural interventions to serve students attending schools that have been identified for improvement, corrective action, closure, or restructuring under section 1116 of ESEA..."

9. Keep in mind this grant is awarded through the Office of Innovation and Improvement, which is headed by former Gates employee Jim Shelton.

Gates Ponying up Nearly $1 Million for i3 Planning Grants

In yet another step in their takeover of the DOE (and US education policy, in general) the Gates Foundation will be issuing $100,000 grants to nine groups for i3 planning. i3 is the cheesy name given to the $650 million program designed to spur "innovation," headed by former Gates employee James Shelton. Jimmy has experience in the for-profit charter realm via his own charter, LearnNow, which he sold to Edison Schools, and he also worked for junk-bond king Mike Milken's Knowledge Universe, NSVF, and McKinsey & Co. The i3 grants can be used for a variety of purposes. From Edweek's Michelle McNeil:

This time, for i3, the chosen school district winners are: Philadelphia, New Haven, Conn., New Orleans, Minneapolis, Houston, and El Dorado County, Calif. In some cases, the grants are going directly to the district, or in other cases, the money is being awarded to the city, or one of the district's philanthropic or nonprofit partners.

Also winning a grant is the Central Texas Education Stimulus Collaborative, which represents Austin and eight other school districts in the region, or about 200,000 students collectively. (In learning about this Texas collaborative, which brings together philanthropy and school districts, it seems like just the kind of thing the education department is looking for.)

The other winners are a group of five Los Angeles charter management organizations that make up the College-Ready Promise initiative, which also won a major teacher-reform grant from Gates, and two New York City charter organizations, the New York City Charter School Center and New Visions for Public Schools.

Michelle seems to have forgotten about a piece she penned less than a week ago, "Changed Urged in Rules for Federal Innovation Aid," which noted there were complaints that i3 provisions "would turn foundations into gatekeepers for these federal grants." Make that Gateskeepers, Michelle (there's zero mention of the "gatekeeper" concerns in her newest article mentioning the $100,000 i3 grants).

It is particularly interesting to look at the districts and organizations offered these grants, all worth up to $100,000:

Philadelphia: the district has already announced the "Renaissance Schools Initiative," a Ren2010-like plan to turn Philly schools over to private operators. Check out the blog of the Philadelphia Student Union for updates on the corporate reform model. This post explains how the process is led by Leroy Nunnery, a former head of Edison Schools.

New Haven, Conn: New contract. Some people like this contract, some don't.

New Orleans: Charter school haven, all under the watchful eye (ha!) of Duncan's former boss, Paul Vallas. Interestingly, Synesi Associates and their non-profit arm, which has been used extensively by Valls in New Orleans, also put in bids to every single school put on the market by LAUSD. Mike Klonsky did a nice write-up about it here.

Minnesota: Birth of charter school movement; second largest city, St. Paul, just selected Broad-trained Valeria Silva as their Superintendent.

Houston: Another charter haven, particularly for KIPP and YES. Hear Jay Mathews spew his usual charter school BS in this article from Philanthropy magazine, a publication of the Philanthropy Roundtable. It's totally fair to call this guy a propaganda machine of the first order.

El Dorado County, CA: Don't know much about El Dorado, but it's in another charter haven facing the consequences of disaster capitalism, the Governator's California.

Central Texas Education Stimulus Collaborative: Impressive list of corporate sponsors, including AT&T and the foundation of oil baron Sid Richardson. Brags about how effectively they've pimped themselves trying to get their hands on stimulus and foundation dollars. Melinda Gates is from Texas.

College-Ready Promise Initiative: Green Dot, Aspire, ACRPS, ICEF, and PUC - all NewSchools Venture Fund investments (in their "portfolio"). All charter chains operating in LASUD.

New York City Charter School Center: major charter school center for NYC.

New Visions for Public Schools: a "Partnership Support Organization" (PSO) for NYDOE.

Gates spokesman Chris Williams claims the foundation looked for districts and charters working together and collaborating, which is the bogus PR line that runs contrary to the school competition reasoning pushed by philanthrocapitalists and charter school proponents. Charters and districts working are working together, that's for sure - to kill off public schools, public school teachers, and further the privatization, test-centric agenda of the business community and corporate America.

What'll be left in it's path? A system of school openings and closures (with evidence this strategy doesn't work, and can be literally deadly in some areas); various charter chains and education management organizations, including corrupt groups like Edison Schools and Imagine Schools, not to mention the segregated chaingangs reliant on dubious psychological methods to create docile minorities as the solution to poverty; more schooling based on education, but with even more emphasis on test scores and other metrics (which will never be based on things that really matter, partly because some things that matter in education cannot be measured on some spreadsheet); and a less-experienced, less-prepared teaching force reliant on temporary teachers.

Sounds an awful lot like the deck-of-cards, gamble-your-socks-off approach of the Wall Street thugs and banksters. Gates is just providing the seed money in this scheme (co-investing with his philanthrocapitalist buddies), and I'd wager that charters receiving Gates funding will benefit from these i3 grants. Ah yes - the "entrepreneurial arm" of the Department of Education.