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District, charters walk a fine line

The fiasco with Deerwood Academy spotlights how the county school administration has responsibility over a charter school, but not the authority.

By KENT FISCHER, Times Staff Writer
© St. Petersburg Times
published December 8, 2002


The financial scandal that nearly shut down the Deerwood Academy Charter School highlights an emerging question in the charter school movement: Who's responsible when charters go bad?

In the Deerwood case, the Pasco County School District lays the blame squarely on the school. Several charter school experts agreed. The school's director was inept; its Board of Directors asleep at the wheel; a felon had access to the school's finances.

But, the experts add, the school district isn't completely without fault.

Under Florida law, the school district is responsible for monitoring the charter school's revenues and expenses. Yet the district apparently was unaware that thousands of dollars a month were flying out Deerwood's back door.

And, district administrators concede, the contract they negotiated with Deerwood didn't give them enough authority to demand reforms once they discovered the sloppy management that made the fraud possible.

The district has since taken steps to correct both shortcomings.

Last week the district appointed a new charter school supervisor who will assume more of a watchdog role than the district has performed in the past.

The district has also toughened up its application process, requiring charter hopefuls to submit to a financial background check and to provide more detailed explanations as to how their school will be run and who will oversee it.

The new application process is so strict, in fact, that it scared off two community groups that submitted charter applications this fall. Both groups withdrew their proposals after reviewing the tougher standards.

Experts say that Pasco's struggle with charter oversight typifies the experience of many other governmental bodies that allow charter schools to open.

Ohio, for example, is in the middle of revamping its charter school laws to ensure that any agency that grants charters go through training on how to do it properly.

In California, the state auditor assailed four large school districts for inadequately supervising their charters. The audit suggested that lawmakers rewrite the state's laws to make districts' oversight responsibilities more explicit.

And in Florida, a legislative audit released last March found that most charter contracts don't give school districts enough authority to crack down on poor-performing charter schools.

The current examination of the watchdog role of school districts and other government agencies is a new phenomenon, said Margaret Lin, the director of the National Association of Charter School Authorizers. Previously, most of the attention had been on the schools themselves, she said.

The role of government oversight was "an afterthought, and wasn't really considered important," she said. "But so many charter school problems can be traced back to thoughtless" actions on the part of the governmental bodies.

Pasco schools superintendent John Long dismissed the notion that the district is at all to blame for Deerwood's embezzlement scandal. Charter schools are a state reform program that was foisted on local districts with little help or clarification from lawmakers, he said.

"This was just plopped into our laps and we're told to make it work," Long said.

What's more, once the district had proof of Deerwood's illegal activity, it seized control of the school. The district is now running Deerwood and has installed a new principal there. He said most superintendents probably would have simply shut down the school.

"We've done far more than we were required to do," he said.

Not to mention, he said, that for six months the district tried to get Deerwood to institute tougher controls over its finances and accounting practices. At each turn, Deerwood director Hank Johnson assured the district that improvements were being made, Long said. The school even went so far as to keep two sets of books, one that it showed to district inspectors as evidence of the improvements. The other set the school kept to itself.

"We're not just talking about malfeasance, but there was also collusion," said Chuck Rushe, the district's chief financial officer. "That's difficult to uncover. (Accounting controls) all depend on honesty."

Compounding the problem, district administrators said, was the contract the School Board signed with Deerwood. It didn't give the district any real power to force Deerwood to institute changes that it didn't want to make. The only hammer the district had was to simply close the school, and that was always a weapon of last resort.

State law wasn't much help.

For example, one section of Florida's charter law states: "The (school district) shall monitor the revenues and expenditures of the charter school." Yet the very next sentence says: "A charter school shall be exempt from the (school district's) policies."

"How do you walk that line?" asked assistant superintendent Sandy Ramos.

Carefully, said Lee F. Arnold, chairman of the state Charter School Review Panel.

"All districts go through a learning curve on how to properly monitor their charters," he said. "You want to be aggressive, but thoughtful. You don't want to fall back on a lot of command and control."

He suggested that districts approach their monitoring responsibilities the same way they oversee school construction contracts.

"I don't view it as a watchdog role," he said. "I view it as contract compliance. They issued a contract. They need a monitor to make sure that the school is living up to that contract."

Arnold said Pasco's takeover of Deerwood was "courageous" -- because many other districts would have closed the school despite its popularity with parents -- and a first in Florida. And while he wouldn't go so far as to issue an opinion on Pasco's culpability in the Deerwood case, he did say that districts are ultimately responsible for their charters.

"It is a legitimate question to ask: Were the district's monitoring efforts good or not?" he said.

Long thinks that they were. He also knows that administrators around the state are confused over their role in overseeing charters.

"Every superintendent in Florida is struggling with the same question: Am I responsible or not?"

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