NC board sets expectations after several charter schools close under financial cloud
North Carolina is tightening its expectations around charter schools following several closures of schools over financial and conflict of interest issues.
The State Board of Education voted Wednesday to modify the agreement that charter schools sign that list their obligations and responsibilities. The revised agreement adds wording on areas such as limiting control of outside groups, following conflict of interest rules, how to spend state money and what to do when a charter school is ordered to close.
State education officials say all the items added to the charter school agreement are already part of state law. But they will now be spelled out in the agreement.
“These were changes to either add clarity in existing law or to bring the appeals process into compliance with due process,” said Allison Schafer, general counsel to the state board.
Charter schools are taxpayer funded schools that are exempt from some of the rules that traditional public schools must follow. There are more than 200 charter schools statewide, but several have closed under a financial cloud.
Charter school closures
▪ In April, the State Auditor’s Office released a report accusing Bridges Academy in Wilkes County of falsifying enrollment numbers to get more than $400,000 in state funding it wasn’t entitled to receive. The state board filed a $483,547 legal claim against Bridges, which closed in June 2021.
▪ In April, the state board ordered the immediate closure of Three Rivers Academy in Bertie County, saying it posed “an immediate threat to the health, safety or welfare” of students, staff and the public. The state board said all school records and financial assets were to be immediately secured.
▪ In May, the state board ordered Torchlight Academy in Raleigh to close by the end of June. The school was accused of conflict of interest violations and questioned over its spending of funds and its overall financial health.
▪ The Learning Center in Cherokee County announced it was closing by the end of June after an internal investigation uncovered financial irregularities that created “insurmountable financial challenges.” The Cherokee County Board of Commissioners has asked the State Bureau of Investigation and Murphy Police to investigate.
Ethics and spending expectations
Amid all the issues, state officials suggested that the state board “clarify” the charter school agreement. Items added Wednesday include:
▪ The non-profit holding the charter must not enter into any agreement that allows a third party to assume control over or replace any members of the non-profit. On Wednesday, the state board approved Wayne STEM Academy to open in Wayne County in 2023 after it dropped wording that would have allowed a development company to remove the school’s board members.
▪ Members of the charter school’s board or its employees must disclose potential conflicts of interest.
▪ No employee, officer or agent of a charter school may participate in the selection, award or administration of a contract supported by a federal award if he or she has a real or apparent conflict of interest.
▪ Charter schools will use state funds, including federal dollars that come through the state treasury, only for the purposes for which they were appropriated.
▪ When a charter school closes, all assets purchased using public funds shall be preserved and used to pay outstanding debts and liabilities.
▪ When a charter school closes, it will transfer by June 30 any student records to the school district in which each student resides.
The N.C. Charter Schools Advisory Board may suggest additional changes to the charter school agreement.
This story was originally published June 22, 2022 at 3:42 PM with the headline "NC board sets expectations after several charter schools close under financial cloud."
