OIG Finds Weaknesses With Charter School Closures

(The following was excerpted from an article in the Single Audit Information Service.) Although Department of Education (ED) officials contended that a recent audit by the ED Office of Inspector General (OIG) on charter school closures was outdated, had a limited scope and did not reflect the agency’s current focus on charter school fiscal accountability nationwide, OIG still maintained that ED must address significant weaknesses regarding the charter school closure process.

Charter schools are publicly funded schools of choice that are intended to be held accountable for their academic and financial performance in return for reduced government regulation. Specific goals and operating procedures for each charter school are detailed in a contract with the charter school authorizer, an entity empowered by the state to oversee charter schools. The contract serves as both an administrative and performance agreement. Charter schools close when the authorizer does not renew or revokes their charter, or when the charter school voluntarily surrenders it.

OIG reviewed school year (SY) 2011-2012 and SY 2012-2013 closeout documentation for charter schools in three states — Arizona, California and Louisiana — that received federal funding passed through from state educational agencies (SEAs) under Title I of the Elementary and Secondary Education Act of 1965 (Pub. L. 89-10), as amended by the No Child Left Behind Act of 2001 (Pub. L. 107-110) and the Every Student Succeeds Act (ESSA) (Pub. L. 114-95); Part B of the Individuals with Disabilities Education Act (IDEA) (Pub. L. 102-119); and the Charter Schools Program (CSP) SEA Planning and Implementation grant.

OIG found that ED’s oversight and monitoring of the selected SEAs it reviewed was not effective to ensure that the SEAs performed charter school closure processes in accordance with federal laws and regulations. In addition, ED did not monitor SEAs to ensure that they had an adequate internal control system for the closure of charter schools. “As a result, we found that the SEAs did not ensure all applicable federal requirements for the sampled closed charter schools for SYs 2011-2012 and 2012-2013 were consistently performed and documented,” OIG added.

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