Charter schools owe $26 million for overstated attendance

Associated Press
April 6, 2008

AUSTIN — Nearly half of the charter schools in Texas have incorrectly reported student attendance, resulting in $26 million in undeserved payments that the state is trying to recover, according to state records.

The Texas Education Agency probably will never recover at least $9 million of the debt because 20 schools went out of business before repaying the state.

Gulf Shores Academy, a Houston charter, owes the state more than $8 million. The school has owed TEA money for attendance reporting mistakes for several years. TEA filed a court motion to revoke the school's charter in 2006, but the case is tied up in court and the state hasn't gotten any money back.

Lynacre Academy in Dallas owed the state about $800,000 when it abruptly closed two months ago, according to TEA records.

TEA officials say that while traditional schools make errors, mistakes are more common at charters because they typically lack experienced staff or strong oversight and can't generate revenue through property tax hikes or bond elections like other public schools.

"There is a kind of perverse incentive for a charter school in financial distress to look at (attendance inflation) as a way to get more money," Lisa Dawn-Fisher, deputy associate commissioner for school finance, told The Dallas Morning News. "If they can't get the warm bodies in the building, they may feel an incentive to falsify records."

TEA officials say they look for suspicious attendance figures at charters, but their regulatory system relies on self-reporting by the schools. TEA puts monitors at schools only after serious problems are identified.

The $26 million debt comes from 93 of the 211 charter operators in Texas. The amount equals the average state funding for about 4,800 students at roughly $5,400 per student.

State funding for charter schools has grown from just under $10 million to more than $646 million in 11 years.

Advocates say most charter schools are run by dedicated employees providing a good choice for students who don't fit into traditional school systems

"Unfortunately, the public just hears about a very small percentage that's done something poorly, just like with public schools," said Katie Howell, executive director of the Resource Center for Charter Schools.

When legislators first approved charters in 1996, many supporters argued that relaxing regulations for schools would spark innovation in the classroom. The competition was supposed to make regular schools better.

The TEA recently launched a new program to train charter employees on school accounting procedures.