Education, New York

NYS Charter Schools a Taxpayer Fraud Risk

December 3, 2014
By Stephanie West

New York, NY – The Center for Popular Democracy and Alliance for Quality Education has released a report titled Risking Public Money: New York Charter School Fraud. The document reveals vulnerabilities in the state’s charter oversight system that could potentially cost New York State taxpayers $54 million in charter fraud this year alone.

“Our governor and other school privatization advocates have pushed relentlessly to expand the charter industry at the expense of public school communities in New York State,” said Billy Easton, Executive Director of the Alliance for Quality Education. “But the proliferation of charters hasn’t been matched by the oversight needed to ensure that public money intended for students doesn’t instead get lost to fraud, waste and abuse.”

The report finds that state agencies have audited just a quarter of New York’s more than 250 charter schools since 2005, largely relying on them to police themselves instead. Yet in 95 percent of the charters examined, auditors found mismanagement and internal control deficiencies that have occasioned $28.2 million in known fraud, waste, or mismanagement.

Examples of Possible Fraud or Mismanagement at Charters:

IN NEW YORK CITY: Harriett Tubman Charter School issued credit cards to its executive director and its director of operation. They charge more than $75,000 in less than two years. The charges were never approved or explained.

IN LONG ISLAND: Roosevelt Children’s Academy Charter School paid four vendor a total of $521,197 for significant public work and purchase contracts without fair competition.

IN ALBANY: Albany Commuity Charter School lost between $207,000 to $2.3 million by purchasing a site for its elementary school rather than leasing it.

IN ROCHESTER: Eugenio Maria de Hostos Charter School failed to enter into a competitive bidding process for several instructional contracts. Instead the school awarded contracts to board members, relatives and other related parties.

IN BUFFALO: Oracle Charter High School entered a 15-year building lease with Oracle Building Corporation, agreeing to pay them more than $5 million at a 20 percent interest rate.

“We can’t afford to have a system that fails to cull the fraudulent charter operators from the honest ones.”  said Kyle Serrette, Education Director at the Center for Popular Democracy. “Given that New York spends over $1.5 billion on charter schools and more than 90,000 children are enrolled, a lot is at stake. We can’t afford to wait for tens or hundreds of millions more dollars to be lost before policymakers address this glaring issue.”

December 3, 2014

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