Gov. Newsom proposes modest reforms for charter school oversight
Gov. Gavin Newsom
Credit: AP Photo / Rich Pedroncelli
Top Takeaways
- Newsom’s plan focuses on strengthening financial oversight and auditing requirements.
- Critics argue that audits are designed to review records after misconduct occurs.
- The governor’s proposals omit elements some reform advocates sought, including more training and technical support for school districts and county offices of education that authorize charter schools.
Gov. Gavin Newsom has proposed a narrower set of changes than the sweeping charter school fraud reforms to prevent fraud sought by some advocates.
In the budget trailer bill released this week, Newsom focused on strengthening financial oversight by expanding auditing requirements and auditor training for all school districts, county office of education and charter schools.
But organizations that spent months negotiating last year’s charter school anti-fraud bills — including Senate Bill 414, which lawmakers passed but Newsom vetoed — responded by echoing the governor’s own veto language, saying the new proposals fall short.
The governor’s auditing proposals, if implemented, would, for the first time, apply the same auditing rules and expectations across all public school systems — school districts, county offices of education and charter schools — rather than singling out charter oversight.
$25 million recovered in charter school fraud case to support San Diego students, families
The San Diego County Office of Education recently received a $25 million grant from fines in the massive A3 Education fraud case to support the county’s most vulnerable students and their families.
In one of the most notorious scandals involving charter schools, the founders of A3, an online charter school empire, stole an estimated $400 million in state school funds between 2016 and 2018 before being indicted a year later.
The San Diego County District Attorney’s Office recovered about $280 million.
Although most of the money was returned to the state, the defendants were ordered to pay $37.5 million in fines, which was placed in a trust dedicated to serving TK-12 students.
About $6 million from the fund has already been given to 47 groups to support students in the county. The $25 million will be dispersed to the County Office of Education over seven years to support its HeartSpire initiative to expand community schools and improve collaboration among schools, public agencies and community-based organizations.
“The funds will strengthen and expand access to mental health, the safety of our kids, their wellness, their educational supports that they need for K through 12 students, and to support those most vulnerable kids who are in our foster care system, or also kids who are living out of cars, in encampments on our streets that are homeless,” said San Diego County District Attorney Summer Stephan last month.
Critics say that standardization, while meaningful, relies on audits to do work they were never designed to do.
Eric Premack, executive director of the Charter Schools Development Center, a nonprofit that provides professional development to charter leaders, said the governor’s emphasis on auditing will have “almost zero impact on preventing fraud.” He argues that audits are designed to review records after the fact rather than stop misconduct in real time. “It’s like trying to keep your car on a windy road safely by looking more deeply into the rear view mirror,” Premack said.
Stephanie Medrano Farland, director of education policy at Capitol Advisors Group, an education consulting organization, echoed that sentiment. “By the time a charter authorizer receives a completed audit, it’s a year later — they are typically reviewing issues that are one to two years old,” she said.
The governor’s proposed changes reflect lessons from several high-profile fraud and mismanagement cases involving charter schools that cost the state hundreds of millions of dollars. The most egregious example was A3 Education, a network of virtual and independent-study charter schools. Between 2016 and 2018, its leaders falsified enrollment and attendance records that went undetected under existing audit practices, allowing the school’s founders to steal an estimated $400 million in public funds.
While the governor’s proposals tighten audit rules, they omit several elements that some reform advocates had sought, including more training and technical support for school districts and county offices of education that authorize charter schools. They also wanted to establish an independent Office of the Education Inspector General to investigate allegations of fraud.
Some provisions omitted from the trailer bill could still be restored in Assembly Bill 84. As a two-year bill, it remains active. In an email, the bill’s author, Assemblymember Al Muratsuchi, D-Torrance, said last year’s negotiations produced “numerous items of agreement” and that he looks forward to working with the governor and stakeholders to finalize those discussions and enact broader reforms.
The governor’s proposal nonetheless highlights a familiar dilemma: It increases expectations for authorizing school districts and county offices of education, but does not provide new funding to support that work.
The California School Boards Association warned that without that additional funding, smaller and rural district authorizers could be forced to redirect money intended for other students and programs.
“Asking authorizers to take on new oversight duties without adequate funding for those activities would compete with funding needed for other district and county students,” said Troy Flint, a spokesperson for the association.
Michael Fine, chief executive officer of the Fiscal Crisis and Management Assistance Team, or FCMAT, a state-created oversight and support agency, offered a more measured assessment of the governor’s proposals.
Giving school districts and other agencies expanded audit authority could help flag problems earlier, such as A3, even if it does not address every vulnerability, he said.
“Is it everything that needs to be addressed? No — but I think it’s a thoughtful approach to progress.”
