Audit the Whole Industry

Once again, it appears that charter schools are once again misusing public funds:

Primavera online charter school, like many businesses this spring, sought help from the federal Paycheck Protection Program to weather the economic disruption of the COVID-19 pandemic.

The Chandler, Arizona, school received a PPP loan of nearly $2.2 million, the largest forgivable loan among the 132 Arizona charter schools that obtained them.

But Primavera's loan appears to have been more of a bonus than a lifeline.

The school, which like all Arizona public schools didn't lose state funding because of the pandemic, ended its fiscal year on June 30 with $8.8 million in the bank – almost double the annual payroll costs for its 85 teachers, records show.

The school also shipped $10 million to its lone shareholder: StrongMind, an affiliated company owned by Primavera's founder and former CEO Damian Creamer.

………

An Arizona Republic review of more than 100 charter school financial records, audits and federal Small Business Administration documents found the overwhelming majority of the Arizona charter schools that obtained PPP loans didn't need the money.

………

"The PPP loans are taxpayer dollars intended to help the needy, not the greedy," [charter school auditor Jason] Todd said.

………

The Republic found that most of the charter schools getting PPP funds padded their cash balances (savings accounts), and a few for-profit charter operations, like Primavera, gave money away to shareholders that matched or exceeded their PPP loan amounts.

………

A 2018 Republic investigation found the state's charter school industry, which gets more than $1 billion annually from the state general fund, has produced several multi-millionaires through self-dealing and lax oversight.

Creamer is among the prominent figures who've made millions of dollars operating Arizona charter schools. His online alternative school boasts more than 20,000 full- and part-time students. Primavera paid Creamer $10.1 million in 2017 and 2018.

………

"The Trump administration's faulty design and mismanagement of the Paycheck Protection Program let thousands of mom-and-pop businesses slip through the cracks without adequate aid while charter schools cashed in," [president of Accountable Us, Kyle] Herrig said.

Herrig's organization said that the PPP loans given to Creamer's interests "merit further investigation" because his "businesses seem to have fared well throughout the pandemic."

………

Arizona Schools Superintendent Kathy Hoffman, who also is a member of the Charter Board, said she was astonished by The Republic's findings.

"It saddens me those dollars are not going to students," she said. "It's very excessive. These dollars should be going where they are needed most, and that's the students and instructional needs."

Corruption is a feature and not a bug for charter schools. 

Destroying the teachers' unions, and stealing public money for private profiteers are the raison d'être of the charter school movement.

That is why the audits.   If fraud can happen, it is happening.