Charter School Corruption 2009 Style

The first time a major U. S. newspaper looks into the sounds-too-good-to-be-true charter school story, guess what they find. First of a two part piece from the Philadelphia Inquirer:

First of two parts.
To many in the impoverished city of Chester, the Chester Community Charter School is a beacon of hope.

The state's largest charter school, it boasts safe hallways, new facilities and energetic teachers. It outperforms the city's regular elementary and middle schools on state tests.

But there's another side to the school's operation that Pennsylvania Education Secretary Gerald L. Zahorchak and Barbara Nelson, a top aide, say raises questions about whether the school is spending too much of its budget on administration and too little on teaching. Zahorchak says he has asked the Chester Upland School District to report on financial data from the school "to the last penny spent."

The state is also seeking changes in the school's special-education program, which has a high percentage of mildly disabled students. Under state law, the school receives three times the regular-student subsidy for each special-education student, whether he or she is mildly or severely impaired. But it spends only a fraction of that on services to those students and uses the rest for other purposes.

The school denies any improper practices and has challenged the state's review in Commonwealth Court, which has ordered hearings and arbitration.

The charter, a nonprofit, pays millions of dollars in annual rents, management fees and salaries to a for-profit company and its chief executive officer, Vahan H. Gureghian, a wealthy lawyer and Republican fund-raiser who lives in one of the largest mansions ever built on the Main Line.

While the charter pays its teachers among the lowest salaries in the state, Gureghian and his company are being paid $14 million in salaries and rent this school year. That brings the total he has received since he began running the school in 1999 to $60.6 million, according to school records submitted to the state.

The portion of the school's money going to business and administration is consistently among the highest for charter schools in Pennsylvania, state records show, and its spending percentage on instruction is among the lowest.

The charter - with 2,350 students in kindergarten through eighth grade - enrolls almost half the Chester Upland School District's elementary and middle school students and is larger than half the school districts in Pennsylvania.

In a written statement, Gureghian said he was "most proud of the work I've been able to do, through my management firm, on behalf of the Chester Community Charter School."

He told an audience at the school this month: "We are having a real impact, and we're putting the students of Chester on a level playing field, where they belong, against the students of our region's leading districts." He declined to be interviewed.

Test scores at Chester Community Charter are significantly higher than those in the Chester Upland School District. Nonetheless, the school has not met state educational standards in four of the last five years.

Nelson, chief of the division that collects spending and revenue data at the Department of Education, called the school's spending "off-balance" compared with other charters and school districts. The school spent 44.6 percent on administration and business in 2006-07, compared with the average for all charters of 17.3 percent, and 30.5 percent on instruction, compared with the charter average of 50.3 percent.

About 14 percent of the school's total enrollment last school year were classified as speech- or language-impaired. This compares with 1.4 percent in Chester Upland and 2.4 percent statewide the year before.

The school receives $23,279 for every Chester Upland special-education student, regardless of whether the student has a mild disability that can be addressed with a modicum of additional instruction or a major one, such as severe mental retardation, that requires far more costly intervention. The state's charter law allows schools to keep whatever special-education money they don't spend on special education.

"This school has its priorities backwards, it's very clear," said James Lytle, a professor at the University of Pennsylvania's Graduate School of Education and a former Philadelphia School District official. "It is working with kids from the most disadvantaged community in Pennsylvania, and one of the goals should be to maximize the amount spent on direct instruction."

Kevin Dooley Kent, Gureghian's attorney, wrote in a letter to The Inquirer that there was no way the school could achieve its academic results without spending ample amounts on instruction. The school and the company "have provided, and will continue to provide in the future, the necessary resources" that students "require to continue their quality education," he wrote.

Read the rest here.