The majority of public money each charter school receives is spent on teacher salaries, classroom materials and other expenditures at the school.
But they also send a percentage of all revenue to the for-profit company as a management fee. Transparency advocates say the public should know how that money is spent.
How high are the fees?
At North Carolina schools, these fees range from 7 to 19 percent, an Observer review of records from the N.C. Department of Public Instruction shows.
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The industry standard is about 10 percent, said Robin Lake, director of the Center on Reinventing Public Education.
Why are they needed?
Management firms say they cover their investment and central office services. Accelerated Learning Solutions, the Florida-based company that charges 19 percent as a management fee, operates one school in North Carolina, Commonwealth High in Charlotte. The company has applied to open three more schools in the state, all of them alternative schools for students who have dropped out.
CEO Randle Richardson said the fee is needed to recoup the $1.5 million to $2 million the company puts into launching the school. He said Accelerated Learning Solutions funds losses for several years as enrollment grows.
“ALS is responsible for all the financial risks of the school,” he said.
How much profit?
It’s unclear. This money also generally pays for central office functions such as payment processing and technology. None of the six companies in North Carolina is publicly traded, which would offer a deeper look at their finances.
Charter Schools USA said it also uses management fees for academic teams that review classrooms and offer professional development for teachers.
“There’s a great misnomer that they think a fee means profit. It is anything but that,” said Richard Page, senior vice president of development at Florida-based Charter Schools USA.
Management companies also spend significantly to launch schools. Other states, such as Michigan, offer grants of more than $100,000 to help start up a school. North Carolina doesn’t give anything.
“Nobody in education is super-profiting,” said Angela Romanowski, superintendent of the Romine Group’s Capital Encore Academy in Fayetteville.