This
report was an update from our earlier
2019 report, which found many of the same problems after
analyzing DOE spending data that we had acquired through Freedom of Information
Law requests and spreadsheets posted on the City Council website.
As
a result of this earlier report, the NYC Comptroller’s office sent
a letter to the Chancellor in January 2020, asking him to respond to our findings. When Deputy Chancellor Karin Goldmark replied
several months later, she surprisingly did not refute any of our
conclusions and actually confirmed some of our findings. She also sent a new
spreadsheet which purported to show DOE’s matching funds that contained data
completely different from the data provided us earlier by DOE via FOIL and/or from
the City Council website.
Yet the data in
the new spreadsheets still revealed considerable shortfalls in matching funds
nearly as egregious as we found in our original report. The state passed a law in 2010, requiring that
any spending undertaken by co-located charter schools to enhance their spaces
be also offered to public schools that shared their buildings, in recognition that
too often, public school students were subjected to separate but unequal conditions
inside the same building. Nevertheless, we found that only four public schools
out of 812 instances over six years had received funds equal to the amount
spent by their co-located charter schools on facility upgrades, and not a
single public school received the cumulative amount owed to them from FY 2014
to FY 2019.
Instead, 127
co-located public schools were owed a total of $15.5 million over this six-year
period. A searchable database of
schools that lacked matching funds is
posted here.
Two of the five
schools that were the most shortchanged were District 75 schools for seriously
disabled children, despite the fact that staff and parents at these public
schools reported considerable needs for upgrades and repair. One of those D75 schools is the Mickey Mantle
school in East Harlem that shares space with Success Academy Harlem 3 and
lacked over $1.5 million in
matching funds over six years. According
to the school’s Building Condition
Assessment Survey, as of last summer,
the school had windows without
gates, emergency exit doors without alarms, and a non-operational
emergency lighting and sound system.
Air conditioning
is especially important in D75 schools, as their schools are open all summer
and many of their students
have complex health issues
that are exacerbated by the heat.
However Allister Johnson, a teacher and the UFT chapter leader at the Mickey Mantle school, told us that their
air conditioners break down continually: “We
cannot use the classrooms for summer school. We have fragile kids with
breathing problems. It would
be dangerous for them to be in classrooms where all the air conditioners are
not working properly.” He added that the staff bathroom has leaked for at least six years which floods
the floors of the stalls, and
that the children’s bathroom lacks hot water on a regular basis.
Another school
that lacked nearly a million dollars in renovation funds is Mosaic Preparatory
Academy in the same building. A parent
and PTA officer at the school, Shaheem Lewis, reported that for years, the school had asked the School Construction
Authority to fix the seats in the auditorium that were falling apart and to repair the floors of the stage
and the gym that had become dangerously worn.
In response to a
Daily News article on our findings, the DOE officials claimed that “some
of the matching money may not arrive at public schools concurrently with the
charter schools’ spending, and thus would not have been reflected in the
spending reports analyzed by Class Size Matters.”
Yet this statement
ignores that the 2010 state law requires that the matching funds be provided to
the public school within three months of the charter school’s expenditures, and
our report found millions of dollars missing in cumulative matching funds over
a period of six years.
According to the DOE
spreadsheets, officials claimed several reasons for not matching these
funds, including that these funds were
not necessary if the charter school expenditures were made on air-conditioners,
repainting and/or reflooring projects. DOE
repeated this claim to WCBS-TV, which aired a segment on our report, focused on
the lack of payments to Mosaic Prep:
“…data shows from 2014 to 2019, Success
Academy Harlem East received about $929,000 in renovation funding not matched
by the Department of Education…the DOE says $913,000 of those expenditures,
including the cost of new AC units, are exempt.”
Yet as our report
pointed out, charter school spending on air conditioners as well as repainting
and reflooring are specifically cited Chancellors regulations A-190 as triggering matching funds.
In
2014, another change was made to state law requiring that charter schools be
given space within NYC public school buildings or that DOE help pay for their
rent in private spaces. Yet even given
the mandate in this law, we found that that the DOE has been overspending on
charter school rental payments by millions of dollars over many years.
According
to our analysis, in FY 2019, the DOE overspent by $21 million on lease subsidies
for 39 charter schools by paying them more than their base rents. We also found that DOE has been leasing eight
buildings directly for charter schools, rather than asking them to rent the
buildings themselves, and thus has made itself ineligible to receive an
estimated $8 million in state reimbursement in FY 2020 alone.
The DOE payments
for charter school lease subsidies also increased sharply by 41% from FY 2019
to FY 2020. In many cases, this was triggered
by ballooning charter school rent that needs further explanation. For example,
the rent skyrocketed at all three sites that housed Hebrew Language Academy Charter Schools: at the school in Manhattan,
the rent increased from approximately $148,000 to $2.9 million in one year; while
more than doubling at one site in in Brooklyn from $931,000 to $2.5 million and increasing by
more than 13 times at another Brooklyn site from just over $80,000 to $1.06 million.
DOE
has also been paying rental subsidies for eight charter schools whose Charter
Management Organization or affiliated organization owns their own space, at a
cost of $11.6 million in FY 2020. In
some of these cases, the rents of these charter schools also grew dramatically,
raising questions about whether these rents were fairly assessed or were hiked
for the purpose of self-dealing.
In
one especially startling example, we
found that the rent for the two Success Academy charter schools housed at
Hudson Yards increased from approximately $793,000 to over $3.4 million – more
than quadrupling – despite the fact that the space is owned by the Success
Charter Management Organization. (The picture of that facility is above, from the cover of the report.) This increase in rent allowed Success to
charge the DOE over $3 million in rental subsidies for those two schools alone in
FY 2020.
To
address these concerns, we’re proposing that DOE regularly post online all funds
spent by co-located charter on facility upgrades within three months of these expenditures, and the data provided
to principals and :School Leadership Teams at the public schools
that share their buildings. These
reports should include any matching funds DOE has provided to the public
schools or intends to provide in the future, along with the time frame. If the
DOE determines that any of these charter expenses are exempted from triggering matching
funds, the reasons for this exemption should be clearly described, along with a
citation from the law or the regulations that allow for the exclusion.
The City Comptroller’s office should also
audit all DOE spending on matching funds and if our findings of shortfalls are
confirmed, demand that the DOE contribute the full amounts to the co-located public
schools that have been denied their proper share of funds for renovation and
upgrades over the last six years.
The City Comptroller should also analyze
whether the DOE actually did overspend on rental assistance to charter schools by
$21 million in 2019, as the spreadsheets indicate. If so, the DOE should demand that these charter
schools reimburse those funds in future years or subtract the amounts from
future payments. The Comptroller should also annually analyze whether the rents
charged to charter schools are fairly assessed, especially those whose
buildings are owned by their CMOs or other allied organizations, to ensure that
these schools and their landlords are not gouging the city by charging more
than they would otherwise.
Finally, the Legislature should eliminate any obligation on the part of the city to require that charter schools be given space in public schools or provide rental assistance. The NYC Department of Education is the only district in the state and indeed in the nation required to help pay rent to charter schools, and it is simply unfair to burden them with this mandate. especially given the poor record of many charter schools in enrolling and retaining high needs students. In FY 2020, this legal mandate cost taxpayers nearly $108 million, an amount that the Office of Management has projected will increase to $160 million by FY 2022, as charter schools continue to expand in enrollment and the per-student subsidy for rent rises over time.
