CPS promised more details on charter school finances. The effort might rate the district a C+.

WBEZ
Urban Prep Charter Academy is one of Chicago's 114 public charter schools. Adriana Cardona-Maguigad / WBEZ
WBEZ
Urban Prep Charter Academy is one of Chicago's 114 public charter schools. Adriana Cardona-Maguigad / WBEZ

CPS promised more details on charter school finances. The effort might rate the district a C+.

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At nearly every monthly Chicago Board of Education meeting, a predictable scene unfolds: A parade of parents and advocates line up to sing the praises of their Chicago charter school during their two minutes allotted for public comment.

It’s part of an elaborate dance by Chicago’s 114 charter schools to build a case to have their contracts renewed — and one that is kicking into high gear now, as eight charters are looking for contracts extended at upcoming meetings.

The Chicago Public School board, which oversees these privately-run but publicly-funded schools in Chicago, has the power to renew their charters, extending the school’s life, or potentially shutting them down.

A lot is at stake. Charter schools educate about 51,500 Chicago children — or about 15% of all CPS students — at a cost of $826 million in taxpayer dollars this year.

The board reviews reams of data on finances, test scores and the like in making the call. But the public? What do they have to go on beyond the words of their supporters at each board meeting if they want to evaluate these charter schools?

CPS has taken steps in recent years to hold charters to the same academic standards as traditional public schools, though charters have been harder to track during the pandemic than traditional schools, WBEZ found. As for finances, there was an outcry for years from advocates who argued there wasn’t enough financial information about these schools available. Before the pandemic, CPS promised to push for more financial transparency so charters would be measured by the same standards as district-run schools.

“Part of the privilege of being able to take public money and operate privately is that [charters] have to be more accountable,” Chicago Board of Education member Elizabeth Todd Breland said at a January 2020 board meeting.

WBEZ checked in to see if CPS and charter schools are living up to their promises of keeping parents better informed about finances. The short answer: Experts might grade them a C+ — just meeting the standard.

“From a basic, compliance side of things, charter schools are reporting what they need to be reporting,” Allison Flanagan, budget and policy associate director with the Center for Tax and Budget Accountability, a budget watchdog group in Chicago. “[But] if you are a parent whose child is going to a charter school and you want to look up the financial records, it’s not easy to read financial audits or understand what the IRS Form 990 is.”

The financial view

Charters first arrived in Chicago in the 1990s, with the goal of trying to innovate and improve public education. Charters are free from many of the regulations of traditional public schools, allowing them to experiment, but that has opened them up to criticism over the years for a lack of transparency and accountability, especially when it comes to finances.

The Chicago Teachers Union in particular has been highly critical of charter school operators, and many charter school teachers have unionized in recent years to try to improve pay, working conditions and to demand greater accountability. Questions about charter finances have been at the center of many of these unionization debates.

But advocates like Andrew Broy, president of the Illinois Network of Charter Schools, say financial information about charter schools has always been available. “Charters have audits, charters have annual review processes. They have disclosure forms, they have [a] renewal [process] every four or five years,” he said. “I have a lot of faith that charter school parents have made a knowing choice when they attend a charter school.”

Charter schools must also submit annual financial and compliance reports and an evaluation of financial health as part of the charter renewal process.

But financial information about Chicago’s charter schools is not always readily available and accessible the way it is for the 512 traditional public schools run by Chicago Public Schools.

District-run schools all follow the same regulations and are held accountable under the same policies. Charters also have to uphold academic and financial standards set by the district and the Illinois State Board of Education, but they are run by different private groups and each network of schools has its own way of reporting and sharing information. They have a higher level of autonomy and it’s harder to keep track of their spending.

To try to make that information more accessible, CPS during the pandemic created an online tool featuring charter school finances, including audits, contracts, board minutes and federal tax returns to try to offer a better understanding of how these schools operate.

The goal, CPS said, was to “share the information that we have about the schools more proactively with the school communities,” Hal Woods, former executive director of CPS office of Innovation and Incubation, explained in 2020.

This came after the Chicago Board of Education renewed 33 charter contracts, including some that received shorter terms with conditions because their operators were not fully meeting academic or financial standards set out in their charter contracts. At the time, board members emphasized the need for more transparency.

The portal is a window into charter schools’ finances, offering many financial documents that were previously only available after submitting a public records request. It shows how much money charter schools are getting and about how much of it goes for top executive salaries. For example, the latest federal tax returns show the CEO of LEARN Charter School Network made $324,880 to manage 14 charter schools, seven under CPS oversight. That’s close to what CPS CEO Pedro Martinez makes to manage more than 500 schools.

Still, the financial documents posted don’t offer a clear understanding of what goes in the classroom.

“There is no breakdown, there is no like, ‘Hey, here’s how much money we get. And here’s how much we distribute. And this is the formula we use, or this is how we decide how much money is spent, or where that money is going,’” Flanagan said after reviewing the documents for several charter schools. “Those policies do not appear to be public anywhere.”

Compared to charter schools, CPS parents have a number of ways to try to understand their local schools’ finances. They can access salary information of all CPS employees per school on the district’s website and see in the CPS interactive budget to see how much their school is spending on services, including special education and bilingual education. Traditional CPS schools also have a more public budgeting process.

That budget information isn’t available for charter schools unless requested through a public information request, and many times the information is incomplete, WBEZ has found. And while teachers at district-run schools are also demanding to see how federal COVID-19 relief funds are directly impacting classrooms, union leaders criticize many charter schools for not posting detailed COVID-19 relief spending plans. Some charters, like LEARN, said they have held parent meetings and surveys to get feedback on how to spend the COVID relief dollars and have a parent advisory council where they also seek input on funding and other issues.

Additionally, most CPS-run schools have elected Local School Councils that make budget decisions about their schools. Charter schools don’t have elected LSCs, though each one is required to have a parent on their board.

Academic standards

When it comes to academics, CPS in recent years started judging charter schools by the same standards used to evaluate traditional schools.

CPS has had one school rating system for several years, and it is applied to both traditional and charter schools. Academic information about charter schools is available on the CPS website, just like for district run schools.

Charters are also required to submit student daily attendance and grade information to CPS. However, during remote instruction, CPS did not supply attendance and grade information as requested by WBEZ. That information has to be obtained directly from each charter school. CPS did, however, provide grade and attendance information for its traditional schools.

Urban Prep case study

In addition to creating the financial portal, CPS has also been more aggressive with charter renewals, and CPS has closed several schools. For example, it ended its contract with one charter campus, Urban Prep West, for financial and academic reasons in 2019. That school is now under state oversight.

Still, CTU leaders involved in contract negotiations last spring with Urban Prep Academy, which now oversee three remaining campuses, say parents are often in the dark about Urban Prep’s finances.

“Many parents did not know what the budget looked like, and how the money was being spent,” said Latoyia Kimbrough, in-house counsel with the union. They had no idea about how much was going into management salaries compared to teachers’ salaries and resources in the classroom, she said. Urban Prep leaders did not respond to a request for comment.

Once considered the model for how to prepare young Black men for college, the network has struggled financially, academically and with enrollment in recent years, and CPS is now closely monitoring it. Charters have contract terms for up to seven years, but the Urban Prep Bronzeville campus is under a three-year contract and must meet certain conditions to continue. The Urban Prep Englewood campus only received a one-year contract in January and must meet academic and financial requirements, including maintaining positive monthly cash flow balances and fully complying with special education laws.

The financial documents in the CPS online portal give the public an idea of Urban Prep’s financial woes and the network’s recent steps to become financially stable, including applying for the federal Paycheck Protection Program.

Flanagan says the documents in the online portal show that Urban prep officials have been able to fill in their funding gaps, but their financial issues most likely will continue.

That’s not a conclusion everyone will be able to reach just by looking online, she said.

“It’s good that it’s out there, but you have to be a rocket scientist to be able to understand the basics of what’s going on,” Flanagan said. “That information should be available more easily.”