Money, control and perception are keys as charters consider switch to Orleans Parish School Board

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From left, Martin Behrman, Arthur Ashe and KIPP Believe are three campuses that are likely to be eligible to return to the oversight of the Orleans Parish School Board, above. Photo by Jessica Williams

Several more independent charter school leaders soon will find themselves facing a question that several others, including Sophie B. Wright Charter School’s principal, have been grappling with for more than a year: Should we move back under the wing of the Orleans Parish School Board?

If even one of the 14 schools expected to be eligible shifts back to the board, it would mark both an academic victory, as well as a sign of faith in the previously derided School Board.  Like most New Orleans public schools, Wright was taken over by the state’s Recovery School District immediately after the hurricane, part of a massive effort to improve failing schools.

As of last October, Wright and seven other campuses had improved their performance enough to leave the Recovery School District, which was always envisioned as temporary oversight for subpar schools. None of them did.

Sharon Clark

School Board officials project that six more charter schools will be eligible when annual scores are released at the end of the month. But that doesn’t mean they’re any more likely to jump from state oversight to the Orleans Parish School Board, Wright’s principal Sharon Clark said.

That’s because they’d have to give up some degree of autonomy – and some amount of money. And then there’s the intangible concern about being associated with a board that at one time was mired in mismanagement, corruption and infighting.

Charters authorized by the Recovery School District or by the state Board of Elementary and Secondary Education are considered their own school districts – on a par jurisdictionally with the Orleans Parish School Board itself. Their federal grant dollars flow directly to them, not through a parish school board or the Recovery School District.

Even more off-putting to some charters, the Orleans Parish School Board would take a percentage of any federal money that flows through its central office en route to individual schools under its administrative umbrella.

“I can go get any grant that I want and sign off on it, with my board, and that’s it,” Clark said. “You can’t do that” at schools that answer to the parish school board.

Mickey Landry, executive director of the three-school Choice Foundation network, is facing the same dilemma for the first time this year. He said he’s not eager to be under a governance model that reduces autonomy.

Jonathan Bertsch

Ditto for Jonathan Bertsch, the director of advocacy for KIPP New Orleans’ nine charter schools, three of which were eligible last year to return. KIPP schools are open to discussing a return to the School Board, but cash is tight enough without losing money to the central office bureaucracy, Bertsch said. Another KIPP school is expected to be eligible this year.

(Click here for the full list of schools expected to be eligible)

Deadlines for making the switch in the fall of 2013 are approaching, with a commitment required by Dec. 1.

The initial decision on whether to move back to the School Board rests solely with the governing board of the charter school. It’s up to each charter board to decide whether to involve its parents and faculty in reaching a conclusion. Then, the state Board of Elementary and Secondary Education and the School Board need to agree to a return before the charter can begin negotiating a contract with the School Board.

Money is used for administration either way

There is nothing underhanded about the cut of government grants that the School Board takes for handling compliance paperwork and other indirect costs, board officials point out. The amount – near 9 percent this year –  is capped by the state, and strict guidelines dictate how it can be spent. Paying fines is a prohibited use, for example; so are entertainment expenses.

In fact, charters also set aside a portion of government grants to cover compliance costs, too – but smaller charter networks or single campuses frequently use that percentage to pay part of the salary of an administrator who handles a number of other tasks. The cap is lower, at 7 percent.

Each district is assigned a different rate, which changes each year based on the financial data those districts provide to the state each year. State charters are assigned the average rate of all the districts in the state.

Dollars aside, there’s also a trust issue, though many school leaders are reluctant to acknowledge it directly.

“You want to work with a governing entity that is fair and that holds you accountable,” said Neerav Kingsland, director of New Schools for New Orleans, a charter school support organization. “And you need to trust that the rules of the game are fair, so to speak.”

School Board officials don’t deny that trust was a casualty of the pre-Katrina school system meltdown. The board was bankrupt; $70 million in government grants had gone missing and the FBI saw fit to set up shop within the central office.

But that was then, current School Board members say. As signs of improvement, board members note the district’s double-A plus bond rating and the recent decision by the federal government to lift the district’s designation as an entity at “high risk” of incompetent or corrupt management of its finances.

To sweeten the pot for schools that might consider rejoining the School Board’s fold, Kathleen Padian, the system’s deputy superintendent of charter schools, said she’s looking into whether returnees could continue to be their own free-standing districts, a move that would presumably require rewriting state law.

Meanwhile, schools should look at their overall compliance costs, Padian said. They may find it’s actually cheaper to task the School Board with grant management, rather than paying salaries to their managers, she said.

“I think it would be an interesting study to see how many staff members they dedicate” to compliance, she said. It’s one thing if you have four or five or six schools, and you pay for one person to do it for all of them, Padian said, “but if you are at one school, I don’t see how it’s cost effective.”

Federal grants targeted for specific uses

The federal grants in question typically cover services for students with special needs or those whose backgrounds involve poverty or other factors that put students at risk of poor performance. At schools with high populations of special-ed or low-income students, the grants can be a significant part of the annual budget.

Special-needs grants can be used to hire specialized teachers or therapists or for the purchase of equipment. Federal poverty grants, otherwise known as Title I grants, fund initiatives intended to boost academic performance, such as college prep coursework or supplemental instructional materials. The state got about $298 million in Title I grants in 2011, according to U.S. Department of Education data. The Orleans Parish School Board’s slice was $17.2 million for its 17 schools, school board comptroller Wayne Delarge said. Data also show that the state got about $187 million in special education grants. $6.6 million of that was for OPSB schools, Delarge said.

According to the budget for that year, the Orleans Parish School Board took about $3 million from the grants for administrative costs. The money was used to pay salaries and associated expenses of central-office grant managers and other finance staff, plus costs of processing payroll and hiring technical managers.

Economies of scale

The School Board’s argument in favor of its higher administrative cost hinges on professionalism and economies of scale that come with handling similar paperwork for several schools at once.

The forms a grant manager fills out are standard-issue; the work comes in making sure documents support the claims for reimbursement under the terms of the grant, Delarge said.

If those steps aren’t taken, a district can find itself in the same mess the Orleans Parish School Board faced when, prior to Katrina, it couldn’t account for $70 million, he said.

School leaders debating whether to return to governance by the Orleans Parish School Board question whether the benefit of having the School Board do compliance is all that great.

“Someone inside the school is going to have to track the data, gather the data, and send a report to Orleans Parish, anyway, so what’s the difference between doing that and sending a report to the federal government?” Mickey Landry said.  “Why give up your autonomous status to make that work?”

He’s not completely opposed to the idea of Lafayette Academy returning, but any loss of autonomy would be a negative, in his view.

Cost analysis

Some charter schools also doubt they’ll realize the cost savings that Padian touts as a reason to yield compliance to a central office. Charter operators that govern three or fewer schools, such as Sophie B. Wright and the Choice Foundation, often assign multiple responsibilities to one person, such as grant management and other financial duties, as well as administrative tasks outside the finance realm altogether.

Bigger charter management organizations, such as KIPP, have entire teams that handle financial management, including a director of federal grants.

Although KIPP does have a more defined division of labor than Wright or Lafayette, Bertsch stresses that yielding compliance to the School Board’s central office is not “as easy as adding or subtracting one position.”

He estimates that the four schools eligible to join the Orleans Parish School Board would have seen the loss last year of $60,000 in federal money available for their special-education needs. And of course KIPP would still need a grant manager to handle compliance for the schools that are ineligible to leave the Recovery School District.

For Wright, the financial hit to its special-ed programming under the School Board’s governance would be much smaller – slightly more than $8,000, based on the school’s budget this year.

Gaining back trust

For Clark, who went nose-to-nose with the School Board last year in a fight to get FEMA repair money freed up for her school, the overriding issue is trust. She wonders if the School Board will manage an added slice of compliance money properly and distribute those grants promptly.

Clark has been a New Orleans educator long enough to remember the bad old days, when the School Board allocated resources based not on equity and need but on “who you were, what types of kids you had in your school.”

One result was that the district was denied reimbursement because central office staff couldn’t show how grant money had been spent. Younger principals and administrators have no idea what that was like, she said.

“We were there,” Clark said.

While aware of sharp improvements in the School Board’s bond rating and financial performance, Clark said she sees the board’s raucous public meetings and the bitter schisms among members as a throwback to the old order, one that leaves her with questions about the board’s administrative capacity. Though the board’s makeup won’t be clear until after the Nov. 6 elections, Clark’s worried it will be politics as usual once next year’s board steps in – and she doesn’t want it to affect her school, or her kids.

“We’re concerned about the board, the amount of power and politics that’s played by board members,” she said. “We still hear some schools get more then other schools in Orleans Parish and some schools have to fight for certain things. When you hear that, it just reminds you of how it used to be.

“And I don’t want to subject these kids and these teachers back to that culture and that environment.”

 

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