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Hear the Echoes #10 - Friday, March 25, 2011

Hear the Echoes #10


Charter School Finances in New Orleans:

Storm Clouds Mar the Future


      Tulane University researchers at the Cowen Institute, this month, released a new study of finances in Orleans Parish and the findings are that as much as $3,000 per student differences exist between the highest and lowest funding of the 40-plus independent school operators and two districts operating  88 public schools in Orleans.  The reporters found that 14 of the 40 charters schools operating in New Orleans ran deficits in the 2008-09 school year.



          Nationally, the Cowen researchers reported, 40 percent of charter school closures are due to financial problems.  Timely access and transparency of financial information is imperative if stakeholders are to be proactive in heading off fiscal stresses. The "lack of consistency, clarity and transparency in financial reporting is a major challenge.  While the Orleans Parish School Board operates or oversees less than 20 percent of the city¡¯s public schools, it continues to be the taxing agent for all public schools.


          The Cowen report presents data that indicates per pupil operating revenues and expenditures for the schools operated by the OPSB have fluctuated only slightly over the past three years.  However, per pupil operating revenues and expenditures for the schools directly run by the RSD have been declining over the past three years. Cowen researchers calculated that 2008-09 funding in New Orleans amounted to $13,070 and that excluded about $1,000 per student in one-time grant money.  The Louisiana average for that period was $10,510.  In 2007-08 the New Orleans schools operated with over $15,000 per student as opposed to the remaining state school district average of $9,966.


             In the 2006©\2007 and 2007©\2008 school years, the LDE included one©\time federal hurricane recovery funds in its calculation of the RSD¡¯s current expenditures, as it did for every other hurricane©\impacted district that received these funds, including the OPSB.¡±  Charters in New Orleans reported spending $11,543,289 or five percent of total expenditures from four one-time federal programs.  But, the charter schools also had the benefit of $5.6 million in contributions from non-government operations.  In one case (KIPP New Orleans) that amounted to $1,292 per pupil.


As of early March 2011, only about 75 percent of charter school audit reports were available on the Legislative Auditor¡¯s website, and many of these were posted to the website during the month of February.  A full set of data, such as required for traditional districts, is still not available for analysis.   The report says "For reasons that are not clear, the Louisiana Department of Education   did not include these funds for the 2008©\2009 RSD current expenditure calculations, the most recent year available, even though the department continued to include one©\time hurricane recovery funds in their calculations of current expenditures for every other district. As a result of the LDE¡¯s exclusion of recovery funds, 2008©\2009 public school current expenditures in the RSD are almost certainly under©\reported.




          Cowen Institute researchers, in November, sent a formal request to DOE for the one time dollar revenue and expense reports so that valid comparisons between RSD and other district spending could be done.  DOE did not respond.  The DOE withheld financially reported data for the FY ending June 30 for 14 months before its release.  "At the time of this writing, nearly 20 months after 2008-2009 fiscal year ended, there is no complete or comprehensive picture of the RSD¡¯s finances.¡±


        What would the DOE or the Louisiana Legislature say to any public school board that failed to provide public records of spending for 20 months?


          Since Orleans Parish schools operate with no attendance zones, transportation costs amount to $1,000 per pupil per year, while the statewide average is $600 per pupil.


          Currently charter schools operated by the RSD do not now pay for building insurance, according to the report.  Looming on the horizon is the potential that the legislature will require the charters to pay their share of insurance costs to the RSD.  This year insurance cost to RSD amounts to $12.3 million and that is a special earmark in appropriations.  If the legislature omits special funding for RSD building insurance, all RSD school will have to pay about $450 per student.  Currently, all other public schools in the state pay for insurance from MFP funding.


          In 2008, the RSD extended the school day to eight and a half hours, and last year the district school year was extended by five weeks.  Cost of this added seat time:  $7 million in the 2010-2011 school year.  In 2008-09, RSD charter schools in New Orleans spent $7,017 per pupil on student instruction.  The average for all school districts in Louisiana was $7,203.  RSD spending on student instruction thus was 61%, while the non-RSD districts averaged 68%.


          Charter schools, according to Cowen, spent "significantly more than the state average for school districts¡± in administration.  The New Orleans charters spent an average of $1,285 per pupil on administration while the state average was $565.  RSD charters spent $1,203 more pupil on non-instructional support services than the average for school districts in Louisiana.


          Superintendent Paul Pastorek insists that charters are public schools, and as such are held to the same reporting standards and public information rules as other types of schools.  But, the Cowen researchers found that "Budgets for most charter schools are not made publicly available¡ªeither before they are adopted or afterward.¡±


          In December, the Louisiana Board of Elementary and Secondary Education approved extending contracts to 12 RSD charter schools in spite of the fact that only one of them met fiscal reporting requirements of their contracts.


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