SUMMARY: Having looked at problems in our public schools and the problems with student selection, retention, and outcomes in charter schools, let’s take a look at some issues with the operation of charter schools. Charter schools:
- Divert money, time, and attention from public schools;
- Lack financial accountability and transparency;
- Often have high administrative costs and salaries, but low instructional budgets and teacher pay; and
- Subcontract with for-profit entities and ones with ties to senior administrators producing inefficiencies and conflicts of interest.
As a result, charter schools undermine our public schools and are not an effective strategy for improving our education system as a whole.
FULL POST: Having looked at problems in our public schools and the problems with student selection, retention, and outcomes in charter schools, let’s take a look at some issues with the operation of charter schools. Having charter schools means operating another system of schools in parallel to our public schools. This diverts money, time, and attention from operating and improving public schools. Members of the legislative and executive branches of government, as well as school system administrators, spend time and energy authorizing, overseeing, funding, and debating charter schools. Some of the money, time, and attention of parents, the public, and philanthropists is spent on charter schools instead of on our public schools.
In Massachusetts, for example, over $400 million annually comes out of local school funding and goes to charter schools.  At the same time, Boston is struggling with a $50 million shortfall in funding for its public schools for next year. The state provides some reimbursement to local school districts for students and funding lost to charter schools for the first few years after a student leaves, but at $80 million it doesn’t make up for the losses. 
Despite receiving substantial amounts of public money, charter schools’ finances typically lack the accountability and transparency of public schools. Part of the reason for this is that many facets of charter school operations are private. Most charter schools are governed by non-profit boards and many are operated by private education management organizations (EMOs). The EMO typically owns the furniture, equipment, and materials in a school and leases them back to the school. And it is common for the school’s teachers to be private employees of the EMO. A charter school’s building is often privately owned and leased or rented by the school. 
These contractual relationships with private entities offer multiple opportunities for private profit-making, sometimes involving governing board members or school management and, therefore, possible conflicts of interest. “A substantial share of public expenditure [for charter schools] … is being extracted inadvertently or intentionally for personal or business financial gain, creating substantial inefficiencies.” 
All of this adds up to a significant degree of privatization of education funding through charter schools. Some of the big players in the charter school business, “such as Imagine Schools, White Hat, and Charter Schools USA, are taking advantage of these opportunities in ways that are self-enriching and not in the public interest.”  These large charter school businesses, and others such as National Heritage Academies and Mosaica, are the dominant corporations in the field. However, they are not the ones that charter school advocates promote in the media, such as KIPP, Uncommon Schools, and Success Academy in New York City, which are all much smaller.
Charter schools tend to have very high administrative overhead expenses, including high salaries for heads of EMOs. In New York City, the CEO of Success Academy charter schools is paid over $475,000 annually. 
On the other hand, the vast majority of charter schools have low classroom instructional budgets. Teachers tend to be young and receive relatively low pay. In Pennsylvania, charter school teachers were found to have average salaries that were $18,000 lower than teachers in the local public schools.
Charter schools typically augment public funding with outside funding that may come from wealthy individuals, foundations, corporations, and even government grants. If this same outside funding were provided to public schools, they would be able to offer enhanced services that are often associated with charter schools, such as extended school days or years, tutoring and other academic supports, and enrichment activities. The outcomes of the public school students would presumably improve if these extra resources were provide to them.
A key measure for educational management, quality, and equity is spending per student. However, comparing spending per student between charter schools and public schools is difficult at best. First of all, as discussed in my previous post, students in the public schools, on average, present more challenges and therefore are more expensive to serve. Second, the costs of supportive services for charter school students, such as transportation, may be borne by the public school system. Third, the outside funding many charter schools obtain is often not clearly disclosed. Because the financial transparency of charter schools is typically much less than the complete openness of public school budgets, getting accurate data to calculate per student spending is difficult. Furthermore, because of their private nature, charter schools are often not responsive to Freedom of Information Act (FOIA) requests that would compel a public entity to release information. 
The bottom line is that charter school operations undermine our public schools, just as their student selection practices do. Their operations divert money, time, and attention from public schools, while their student selection practices divert the better students. Despite receiving substantial sums of public money, charter schools’ financial practices result in low instructional spending, high administrative costs, inefficiencies, and conflicts of interest. This is not an efficient strategy for improving our education system as a whole.
 Office of the State Auditor, Commonwealth of Massachusetts, 2014, “The Department of Elementary and Secondary Education’s oversight of charter schools,” Published by the author (http://www.mass.gov/auditor/docs/audits/2014/201351533c.pdf)
 Massachusetts Budget and Policy Center, 2/5/16, “Analyzing the Governor’s FY 2017 Budget,” (http://www.massbudget.org/report_window.php?loc=Analyzing-the-Governor%27s-Budget-for-FY-2017.html)
 Miron, G., Mathis, W., & Welner, K., 2015, “Review of separating fact & fiction,” National Education Policy Center (http://nepc.colorado.edu/thinktank/review-separating-fact-and-fiction) Note: This document is a rebuttal of an advocacy document from the National Alliance for Public Charter Schools entitled, “Separating fact & fiction: What you need to know about charter schools.” (http://www.publiccharters.org/wp-content/uploads/2014/08/Separating-Fact-from-Fiction.pdf)
 Baker, B., & Miron, G., 2015, “The business of charter schooling: Understanding the policies that charter operators use for financial benefit,” National Education Policy Center, page 3 (http://nepc.colorado.edu/files/rb_baker-miron_charter_revenue_0.pdf)
 Cohen, R., 12/22/15, “The charter school business,” The American Prospect, pages 2-3 (http://prospect.org/article/charter-school-business)
 Baker & Miron, 2015, see above.
 Miron, G., Mathis, W., & Welner, K., 2015, see above.