California Virtual Academies defend online charter schools as model of school choice

By Jessica Calefati, jcalefati@bayareanewsgroup.com

Posted:
 
04/19/2016 05:26:24 AM PDT

In a vigorous defense, officials behind the California Virtual Academies branded this news organization’s investigation into their online charter schools “wrong and insulting” and an attack against a model of school choice.

But critics of K12 Inc., the Wall Street-traded company that runs the profitable but low-performing academies, called for greater oversight of its practices.

The newspaper’s two-day series examined how K12 Inc., reaps tens of millions of dollars in state funding while graduating fewer than half of the students enrolled in its high schools.

Elizabeth Novak-Galloway, 12, who used to be an A student, received C s because she was missing work she never knew had been assigned, her mother said. (Dai Sugano, Bay Area News Group)
(
Dai Sugano
)

In a letter sent to teachers Monday afternoon, the schools’ academic administrator, April Warren, called the newspaper’s investigative series “a gross mischaracterization of all of the work that you all do on a regular basis.” But despite their broad condemnations, neither Warren nor other school officials alleged any specific factual inaccuracies in the series.

The investigation, published Sunday and Monday, also reported that teachers have been asked to inflate attendance and enrollment records used to determine taxpayer funding.

K12 says the schools operate independently and are locally controlled. But the newspaper’s review of the academies’ contracts, tax records and other financial information suggest the Virginia-based company calls the shots, operating the schools to make money by taking advantage of laws governing charters and nonprofit organizations. K12’s heavily marketed model in California has helped the company collect more than $310 million in state funding over the past 12 years.

State Sen. Jim Beall, D-San Jose, said the performance of any publicly financed school should be a matter of concern for taxpayers — and lawmakers.

“Charter schools were created to give parents and students an alternative to how public schools were delivering instruction,” Beall said Monday. “But it has never been the state’s intent to permit online for-profit charter schools to fail students or gouge taxpayers. Students must not be viewed as cash cows.”

However, the company, a top administrator for the online school network and the board of directors for one of the academies serving Bay Area students all released similarly worded statements Monday, blasting the newspaper’s investigation.

Together, members of the California Virtual Academy at San Mateo’s board of directors called allegations that they have “any other interest except for our children” and their families both “wrong and insulting.”

The statement said the network of online schools has for years endured similar attacks on its track record from charter opponents and the California Teachers Association, which is attempting to unionize employees at the schools.

“Parents want choice in education,” the statement said. “Students deserve options because one size does not fit all. We love our school.”

The board insisted in its statement that each of the K12-partner schools are “governed independently by their nonprofit school boards made up of California residents including parents, educators, and local community leaders.”

The newspaper’s investigation revealed that two of the four board members at the San Mateo County school — board president Don Burbulys and member Stephen Warren — are related to top academy administrators who are hand-picked by K12.

Burbulys, who is married to Dean of Students Laura Terrazas, lives in Soquel in Santa Cruz County, and Warren, who is the brother-in-law of April Warren, lives in Riverside County.

Defending her brother-in-law’s oversight of her work, April Warren wrote in her letter to teachers that “relatives are permitted to serve on a California nonprofit board” and that “several school districts have people who sit on their boards that are either parents, employees or are related to employees of the district that they serve.”

The California Charter Schools Association and California Teachers Association on Monday said the Legislature should take a hard look at whether for-profit companies like K12 should be operating schools in California and whether the state can do more to ensure charter schools are overseen properly.

“When taxpayer money is used to fund education, those dollars should go to help kids,” said California Teachers Association President Eric Heins. “In this case, we have no idea how the company is spending our tax dollars and it’s not right. This is pretty basic stuff.”

Online charter schools only work with a fraction of the kids enrolled in California’s roughly 1,200 charters, but that doesn’t mean they should be held to a lower standard of accountability, said Emily Bertelli, a spokeswoman for the California Charter Schools Association, which publicly called for the closure of a K12-run school in 2011 only to see the school reopened with a new name under the same authorizer.

Former Tennessee Education Commissioner Kevin Huffman said in an interview Monday that none of the newspaper’s findings surprised him. He said he’d seen many of the same issues unfold in his state, where he tried, and failed to shut down K12’s Tennessee Virtual Academy because of poor performance.

“This company’s efforts to grow bear no relationship whatsoever to the quality of their results in California and across the country,” Huffman said.

“You would hope that an online virtual school — especially one run by a for-profit company — would only have the opportunity to grow with really high-quality results,” Huffman said. “K12 isn’t coming close to meeting a high bar in terms of quality.”

One Redwood City parent who contacted this newspaper, saying the investigative series “hit close to home,” said his son, who is now a sophomore in college, took K12’s advanced courses, earned A’s and B’s and finished at the top of his class when he was a student at one of the company-run California schools. But when his son applied to a local community college, he was stunned to learn he had to take remedial math and English courses because he was so far behind.

Other parents, however, contacted the newspaper to defend the schools, saying the online learning model was vital to their sons’ and daughters’ academic success.

Maureen Behlen said her son thrived in K12’s school because she “put everything into it,” spending several hours a day teaching him and guiding him through his coursework. She said an online school isn’t the right fit for families who can’t devote as much time to the program as she did.

“Would you send a bunch of kids into a classroom with no teachers? Of course not,” said Behlen, who lives in the foothills in East San Jose. “There has to be an adult responsible for overseeing what they’re learning, and if there isn’t, you’re setting them up to fail.”

Contact Jessica Calefati at 916-441-2101. Follow her at Twitter.com/Calefati.

Online School Enriches Affiliated Companies if Not Its Students

Photo

Alliyah Graham, a senior in the Electronic Classroom of Tomorrow, an online charter school, in Liberty Township, Ohio, in February.

Credit
Andrew Spear for The New York Times

COLUMBUS, Ohio — The Electronic Classroom of Tomorrow, an online charter school based here, graduated 2,371 students last spring. At the commencement ceremony, a student speaker triumphantly told her classmates that the group was “the single-largest graduating high school class in the nation.”

What she did not say was this: Despite the huge number of graduates — this year, the school is on track to graduate 2,300 — more students drop out of the Electronic Classroom or fail to finish high school within four years than at any other school in the country, according to federal data. For every 100 students who graduate on time, 80 do not.

Even as the national on-time graduation rate has hit a record high of 82 percent, publicly funded online schools like the Electronic Classroom have become the new dropout factories.

These schools take on students with unorthodox needs — like serious medical problems or experiences with bullying — that traditional districts may find difficult to meet. But with no physical classrooms and high pupil-to-teacher ratios, they cannot provide support in person.

“If you’re disconnected or struggling or you haven’t done well in school before, it’s going to be tough to succeed in this environment,” said Robert Balfanz, the director of the Everyone Graduates Center, a nonprofit research and advocacy group in Baltimore.

Virtual schools have experienced explosive growth nationwide in recent years, financed mostly by state money. But according to a report released on Tuesday by America’s Promise Alliance, a consortium of education advocacy groups, the average graduation rate at online schools is 40 percent.

Few states have as many students in e-schools as Ohio. Online charter schools here are educating one out of every 26 high school students, yet their graduation rates are worse than those in the state’s most impoverished cities, including Cleveland and Youngstown.

With 17,000 pupils, most in high school, the Electronic Classroom is the largest online school in the state. Students and teachers work from home on computers, communicating by email or on the school’s web platform at distances that can be hundreds of miles apart.

In 2014, the school’s graduation rate did not even reach 39 percent. Because of this poor record, as well as concerns about student performance on standardized tests, the school is now under “corrective action” by a state regulator, which is determining its next steps.

But while some students may not have found success at the school, the Electronic Classroom has richly rewarded private companies affiliated with its founder, William Lager, a software executive.

When students enroll in the Electronic Classroom or in other online charters, a proportion of the state money allotted for each pupil is redirected from traditional school districts to the cyberschools. At the Electronic Classroom, which Mr. Lager founded in 2000, the money has been used to help enrich for-profit companies that he leads. Those companies provide school services, including instructional materials and public relations.

For example, in the 2014 fiscal year, the last year for which federal tax filings were available, the school paid the companies associated with Mr. Lager nearly $23 million, or about one-fifth of the nearly $115 million in government funds it took in.

Critics say the companies associated with Mr. Lager have not delivered much value. “I don’t begrudge people making money if they really can build a better mousetrap,” said Stephen Dyer, a former Ohio state legislator and the education policy fellow at Innovation Ohio, a Columbus think tank that is sharply critical of online charter schools.

“It’s clear that Mr. Lager has not done a service over all to kids, and certainly not appreciably better than even the most struggling school districts in the state,” Mr. Dyer added. “But he’s becoming incredibly wealthy doing a very mediocre job for kids.”

Photo

The home office of Hannah Brown, an art teacher for the Electronic Classroom, in Columbus, Ohio.

Credit
Andrew Spear for The New York Times

Mr. Lager declined requests for an interview. In an emailed statement on Tuesday, he did not respond to questions about his affiliated companies but said the Electronic Classroom’s graduation rate did not accurately measure the school’s performance.

In the statement, he said many students arrived at the school already off-track and have trouble making up the course credits in time to graduate.

“Holding a school accountable for such students is like charging a relief pitcher with a loss when they enter a game three runs behind and wiping out the record of the starting pitcher,” his statement said.

The statement added that the school “should be judged based on an accountability system that successfully controls for the academic effects of demographic factors such as poverty, special needs and mobility.”

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In an interview, Rick Teeters, the superintendent of the Electronic Classroom, said many of the students were older than was typical for their grade, while others faced serious life challenges, including pregnancy or poverty.

Mr. Lager is correct in noting that the student body at the Electronic Classroom is highly mobile; last year more than half the school’s students enrolled for less than the full school year. And of those who dropped out of high school, half were forced to withdraw after being reported truant.

Also, according to state data, 19 percent of the students have disabilities, higher than the state average.

But the proportion of students who come from low-income families — just under 72 percent — is lower than in Cleveland, Columbus and Dayton. Close to three-quarters of the school’s students are white.

In a self-published book in 2002, “The Kids That ECOT Taught,” Mr. Lager wrote that “the dropout rate is the most critical issue facing our public education system but it is only the first of many problems that can be solved by e-learning.”

Through the Electronic Classroom, he wrote, he planned to make public education more efficient and effective.

He added, “No business could suffer results that any school in Columbus Public delivers and not be driven out of business.”

Peggy Lehner, a Republican state senator who sponsored a charter school reform bill that passed the legislature last fall, said the problem was the school, not the students.

“When you take on a difficult student, you’re basically saying, ‘We feel that our model can help this child be successful,’ ” she said. “And if you can’t help them be successful, at some point you have to say your model isn’t working, and if your model is not working, perhaps public dollars shouldn’t be going to pay for it.”

Some of those public dollars are being paid to IQ Innovations and Altair Learning Management, companies associated with Mr. Lager. Altair has had a contract with the school since 2000, a school spokesman, Neil Clark, said. According to federal filings, it received $4.2 million in 2014. Mr. Lager is the company’s chief executive.

Photo

Administrative employees at the Electronic Classroom’s headquarters in Columbus.

Credit
Andrew Spear for The New York Times

Mr. Clark said Altair provided “a variety of services,” including a program of instruction, strategic planning, public relations, financial reporting and budgeting.

In filings with the Ohio secretary of state, Mr. Lager is listed as a registered agent for IQ Innovations; in campaign finance records, he was listed as the company’s chief executive as recently as 2015. IQ Innovations received $18.7 million from the school in 2014.

Mr. Clark said IQ Innovations had provided the school with grading software and digital curriculum materials since 2008.

He said that neither Altair nor IQ Innovations was required to go through a competitive bidding process.

At the school’s headquarters, in a former mall set at the back of a parking lot here, attendance clerks sit in a windowless room, tracking how often students log in to the network. Those who do not log in for 30 days are reported as truant.

Guidance counselors carry caseloads of up to 500 students each, and the schoolwide pupil-teacher ratio is 30 to one.

For some students, the Electronic Classroom can provide a release valve from the pressures or frustrations of a traditional school. Several students assembled by the school to talk to a reporter said they had experienced bullying or boredom before enrolling.

“Without the bullying, I was able to focus,” said Sydney DeBerry, 20, who left a private school to enroll in the Electronic Classroom, which she graduated from in 2014. “That was a big distraction, not only to my work but to my individuality.”

Students who made it to graduation said self-motivation was crucial. “Contrary to popular opinion, you cannot just log on once a week and get by and still pass your classes,” said Dianna Norwood, 19, who graduated last year and is now a student at Ohio State University.

But other students complained that the school could make it difficult to succeed.

Alliyah Graham, 19, said she had sought out the Electronic Classroom during her junior year because she felt isolated as one of a few African-American girls at a mostly white public school in a Cincinnati suburb.

It took three weeks for the Electronic Classroom to enter her in its system, she said. Then it assigned her to classes she had already passed at her previous school. When she ran into technical problems, she said, “I really just had to wing it.”

Ms. Graham, who hopes to pursue a career in medicine, has also been disappointed by the quality of assignments. She showed a reporter a digital work sheet for a senior English class, in which students were asked to read a passage and then fill in boxes, circles and trapezoids, noting the “main idea,” a “picture/drawing,” or “questions you have.”

“I feel like I did this kind of work in middle school,” Ms. Graham said.

When she turns in assignments, she said, feedback from teachers is minimal. “Good job!” they write. “Keep going!”

She hopes to graduate this spring.

Her cousin, Makyla Woods, 19, moved to Cincinnati from Georgia last year, as a senior, to live with her father. Since Ms. Graham was already enrolled in the Electronic Classroom, Ms. Woods decided to give it a try.

But she soon moved out from her father’s apartment, took a job at McDonald’s and stopped doing assignments. “I just got lazy doing work on the computer,” she said.

Kitty Bennett contributed research.

A version of this article appears in print on May 19, 2016, on page A1 of the New York edition with the headline: Online School Sold as a Success, but Many Fail. Order ReprintsToday’s PaperSubscribe

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Hugh Jackson wrote this disturbing article for Nevada NPR. It demonstrates the extent to which the charter industry is expanding, bringing in lucrative real estate deals, speculation, and for-profit entrepreneurs from out of state. More than 35,000 students have enrolled in charters, at a cost to taxpayers of a quarter billion dollars.

 

He writes:

 

“Charter schools are publicly funded, but privately operated. The result is a charter-school industry, encompassing what can be a dizzying array of arrangements and contracts between the schools, their unelected boards, state agencies, property developers, for-profit management companies, nonprofit arms of private companies, hedge funds and investment firms, and myriad consultants, contractors and education-industry vendors. Virtually every dollar everyone in the charter-school industry makes is provided by the taxpaying public….

 

“Of the quarter-billion dollars Nevada taxpayers provided to charter schools in 2014-15, more than a fifth of it — $54 million, according to state data — went to schools managed by a single for-profit company, a Florida-based firm called Academica. Established in 1996 and boasting close ties to then-Florida Gov. Jeb Bush, Academica has been the center of numerous controversies in that state, particularly after the Miami Herald reported that the firm used public money to lease real estate from development companies owned by the same people who own Academica, brothers Fernando and Ignacio Zulueta. Academica has also come under fire in Florida for, among other things, setting up a separate “college” in one of its charter high schools and charging taxpayers hundreds of thousands of dollars to provide students with two-year “degrees” of dubious worth.

 

“Academica is not a publicly traded company, and any financial information about the firm is difficult to come by, let alone the type of granular financial reporting that might indicate how much of Academica’s Nevada revenue stays in Nevada, as opposed to flying out of the state as profit.

 

“As a practical matter, Academica is not only relied upon every step of the way, but the instigator. No doubt some charter schools are the result of concerned citizens and parents banding together, from the bottom up, as it were, to fill what they perceive to be a particular educational niche or void. With a new Academica school, the far more likely scenario involves a for-profit company making market-based decisions on location, timing, demographics and such, not unlike Walmart determining where to open a new Sam’s Club. Upon determining that a new project pencils out, Academica finds the statutorily requisite citizen’s charter school board. (The state does not require a charter school board to take competitive bids before selecting a management firm, and such a bidding process would be unthinkable in schools being spearheaded by Academica….).

 

“Enter the investment funds

 

“To be eligible for state funding to build or improve a charter school facility, the school has to have been opened for three years. So it needs financing to bridge the gap between the school’s opening and its eligibility for state facility financing (it’s already receiving operating funds from the state).

 

“The Turner-Agassi Charter School Facilities Fund is one of several for-profit investment funds in the nation that have attracted capital from a) foundations, institutional investors and individuals who are “for” education; and b) hedge funds, investment banks and other investors drawn to generous federal tax credits on income earned from the public through charter-school profits.

 

“Started by Southern California financier Bobby Turner in partnership with long-time Las Vegas charter-school champion Andre Agassi, Turner-Agassi has provided bridge financing for at least four Academica building projects in Nevada and is doing the same for most of Academica’s aggressive expansion in the state.

 

“Here’s more or less how it works:

 

“Turner-Agassi puts up money to develop property for a charter school. After three years, during which time the school, which is to say the public, rents the property from the investment fund, the charter is eligible for state financing to buy the property from Turner-Agassi.

 

“The school is purchased from the investment fund with money raised by revenue bonds issued through the state Division of Business and Industry —
public debt. Charter-school bonds in Nevada are so-called limited-obligation bonds, backed by the school’s revenue (which comes from the state education budget), as opposed to general obligation bonds, backed by revenue from a tax increase. Limited obligation bonds typically pay higher interest rates than general obligation bonds, which translates into higher interest payments for the public when it pays off the debt….

 

“Project dates listed on Turner-Agassi’s portfolio online indicate Academica will be eligible for a first batch of state loans to purchase the investment fund’s developments in 2017.

 

“Meanwhile, regardless of who owns the property the charter school is in, the management company is charging the school, which is to say the public, for management/professional fees on top of salaries, insurance, energy and other operating costs. Those fees can be spread through various categories of school balance sheets provided to the state, but those reports show that in Academica’s case, management fees totaled, at the very least, $3 million in the 2014-15 school year.

 

“The arrangement between Turner-Agassi and Academica is only one model that might be used to finance construction in the charter-school industry.

 

“For instance, a few years ago, Imagine Schools, one of the nation’s largest charter firms, made national headlines at its 100 Academy of Excellence in North Las Vegas when 40 percent of the school’s state-provided revenue was spent on lease payments to a real-estate investment trust. As a Nevada Education Department official told the New York Times in 2010, “After paying for real estate and management, 100 Academy has very little left over for education.”

 

“Shenanigans and accountability

 

“Academica is the undisputed heavyweight of Nevada’s charter-school industry and has the most aggressive expansion plans in the state. But practices at other charter operations have been attracting more — or at least more critical — official scrutiny.

 

“The state of Nevada provided Silver State High School in Carson City nearly $5 million in the 2014-15 school year. Along with all the ways a school might spend the public’s money, Silver State decided one of them was investing in the Wall Street derivatives market. When a member of the school’s board brought the investment to the attention of the State Public School Charter Authority (SPSCA), the authority ruled the investment a no-no and ordered the school closed at the end of the current school year.

 

“Quest Academy, with four campuses in Southern Nevada, received more than $10 million from the state in 2014-15. In October the SPSCA documented how members of the school’s board had hired family members in violation of nepotism regulations. The SPSCA has subsequently dissolved the board, appointed a receiver to oversee school finances, and the SPSCA could ultimately revoke or refuse to renew the school’s charter. This comes three years after the SPSCA forced Quest to restructure its board and fire a principal upon discovering staff was paid thousands of dollars in unauthorized bonuses, and the principal was spending a bunch of unauthorized money on travel and shopping.

 

“As for charter schools being the cradle of innovation, the pedagogical emphasis for which charters are perhaps most renowened is “teaching to the test” even more intensely than testing-obsessed public schools.

 
“And then there are the cyber schools. Yes, in Nevada, online schools are charter schools, too. The largest, Nevada Virtual Academy, operated by the corporate giant K12 Inc., received nearly $30 million in public funds in 2014-15 to provide online education to 2,600 students, a per-student cost of $11,500. Per-student spending at Academica schools averaged, by contrast, less than $8,000.

 

“Higher per-student spending at an online school seems counterintuitive. After all, there is no property to develop, no classrooms or desks. But as cyber schools have emerged as one of the largest segments of the charter-school industry, they’ve become renowned not only for poor performance, but also for frenetic enrollment churn. Online schools market heavily to attract students, but online learning isn’t for everyone, and many students withdraw to return to brick-and-mortar schools. That churn could manifest itself as higher costs in lots of ways. The state can be charged for students who are no longer in the schools (as was found in a Colorado audit of K12 a few years ago). Or the state gets saddled for up-front student costs even if those students leave later. Or in K12’s case, maybe the company just isn’t very good at holding down costs: Nevada Virtual Academy spent more than $2 million for textbooks last year. Academica, with nearly three times as many students, spent $219,000. State data indicates K12’s management fees, at least $4 million, were also larger than Academica’s.

 

“Proposed rules would effectively give the SPCSA additional authority to force a charter school to fire its management organization and make it easier for the authority to deny a charter school’s renewal.

 

“The most adamant objections to those rules have been filed by Nevada Virtual Academy and the state’s second largest cyber charter school, Nevada Connections, owned by the international corporate education giant Pearson Inc.

 

“The cases of Silver State and Quest, as well as the proposed regulations, appear to reflect a commitment of the SPCSA and its executive director, Patrick Gavin, to try to hold charter schools accountable.

 

“It might be a tall order. Although Nevada’s charter-accountability regulations were hailed as improved in a recent national report, that report noted that the SPSCA does not have the requisite staff to conduct consistent monitoring crucial to effective regulation. The standard recommended staff is roughly one monitor for every 1,000 charter-school students. In Nevada, Gavin estimates it is closer to one for every 5,000. The SPSCA is funded by fees charged to authority-sponsored schools, currently about one percent of a school’s operating budget. Boosting those fees will be a top SPCSA priority when the Legislature meets next year.

 

“Why are we doing this, anyway?

 
“Everyone is in favor of choice in education,” Ryan Reeves, director of Academica’s Nevada operations, told the Review-Journal in 2014.

 

“It’s a seductive argument in an era when identity and self-worth are often shaped by where one shops.

 

“And charters are breaking down barriers erected by decades of entrenched education bureaucracy, thus reinvigorating education with a spirit and dedication that just can’t be found in tired public schools lumbering along under the weight of oppressive administrative bloat. Indeed, charter schools are the heart of education innovation.

 

“Or so the argument goes.

 

“Independent analysis suggests otherwise. Assessments conducted by the Center for Research on Education Outcomes (CREDO) at Stanford University are frequently cited by the media and charter-school supporters. Yet even the results of CREDO’s most recent national study were mixed at best, finding charter schools performing slightly, if at all, better than traditional schools at reading, and performing, if anything, worse than traditional schools in math. Critics charge that even CREDO’s modest findings overstate the performance of charter schools.

 

“As for charter schools being the cradle of innovation, the pedagogical emphasis for which charters are perhaps most renowned is “teaching to the test” even more intensely than testing-obsessed public schools — test scores being the key, if not the only, means of assessing educational outcomes in a publicly funded but privately run school….

 

“A good portion of the public acceptance of charters is attributed to what is sometimes called “sector agnosticism” — the view that how a school is managed, or who makes money from it, is irrelevant so long as the results are good.

 

“But charter companies and pro-charter politicians and advocates are anything but agnostic. The rapid growth of the charter-school industry has been accompanied by relentless and disingenuous attacks on public schools and the people who work in them. The interest groups, ideologues and politicians who most zealously promote “school choice” are often the most eager to malign public institutions.

 

“Charter schools emerged on the scene more than a quarter century ago as laboratories where public-school systems could test methods, and the most promising results could be implemented elsewhere in public schools. Some charter supporters, parents and charter-industry executives and investors obviously mean well and still view charters as an overall benefit to the public good.

 

“But today’s charter industry, much like Nevada’s voucher plan, reflects a chronic civic defeatism. Echoing the perverse social Darwinism of more than a century ago, faith in free-market education is a surrender to pessimism. Society really isn’t incapable of providing a fair educational opportunity to every citizen. Some people are doomed to fail, that’s just the way it is, so best to segregate those with promise, the achievers, in separate schools. As for everyone else, well, too bad for them.

 

“In the meantime, capitalizing on politically correct disdain for public institutions and a consumer culture’s visceral embrace of “choice,” and truly impressed by the steady flow of public money through the public-education revenue stream, the private sector is working feverishly … maybe to create quality schools, but definitely to drain more and more money from that stream.”

 

via Diane Ravitch’s blog http://ift.tt/1WajiBo

California Virtual Academies defend online charter schools as model of school choice

By Jessica Calefati, jcalefati@bayareanewsgroup.com

Posted:
 
04/19/2016 05:26:24 AM PDT

In a vigorous defense, officials behind the California Virtual Academies branded this news organization’s investigation into their online charter schools “wrong and insulting” and an attack against a model of school choice.

But critics of K12 Inc., the Wall Street-traded company that runs the profitable but low-performing academies, called for greater oversight of its practices.

The newspaper’s two-day series examined how K12 Inc., reaps tens of millions of dollars in state funding while graduating fewer than half of the students enrolled in its high schools.

Elizabeth Novak-Galloway, 12, who used to be an A student, received C s because she was missing work she never knew had been assigned, her mother said.
Elizabeth Novak-Galloway, 12, who used to be an A student, received C s because she was missing work she never knew had been assigned, her mother said. (Dai Sugano, Bay Area News Group)
(
Dai Sugano
)

In a letter sent to teachers Monday afternoon, the schools’ academic administrator, April Warren, called the newspaper’s investigative series “a gross mischaracterization of all of the work that you all do on a regular basis.” But despite their broad condemnations, neither Warren nor other school officials alleged any specific factual inaccuracies in the series.

The investigation, published Sunday and Monday, also reported that teachers have been asked to inflate attendance and enrollment records used to determine taxpayer funding.

K12 says the schools operate independently and are locally controlled. But the newspaper’s review of the academies’ contracts, tax records and other financial information suggest the Virginia-based company calls the shots, operating the schools to make money by taking advantage of laws governing charters and nonprofit organizations. K12’s heavily marketed model in California has helped the company collect more than $310 million in state funding over the past 12 years.

State Sen. Jim Beall, D-San Jose, said the performance of any publicly financed school should be a matter of concern for taxpayers — and lawmakers.

“Charter schools were created to give parents and students an alternative to how public schools were delivering instruction,” Beall said Monday. “But it has never been the state’s intent to permit online for-profit charter schools to fail students or gouge taxpayers. Students must not be viewed as cash cows.”

However, the company, a top administrator for the online school network and the board of directors for one of the academies serving Bay Area students all released similarly worded statements Monday, blasting the newspaper’s investigation.

Together, members of the California Virtual Academy at San Mateo’s board of directors called allegations that they have “any other interest except for our children” and their families both “wrong and insulting.”

The statement said the network of online schools has for years endured similar attacks on its track record from charter opponents and the California Teachers Association, which is attempting to unionize employees at the schools.

“Parents want choice in education,” the statement said. “Students deserve options because one size does not fit all. We love our school.”

The board insisted in its statement that each of the K12-partner schools are “governed independently by their nonprofit school boards made up of California residents including parents, educators, and local community leaders.”

The newspaper’s investigation revealed that two of the four board members at the San Mateo County school — board president Don Burbulys and member Stephen Warren — are related to top academy administrators who are hand-picked by K12.

Burbulys, who is married to Dean of Students Laura Terrazas, lives in Soquel in Santa Cruz County, and Warren, who is the brother-in-law of April Warren, lives in Riverside County.

Defending her brother-in-law’s oversight of her work, April Warren wrote in her letter to teachers that “relatives are permitted to serve on a California nonprofit board” and that “several school districts have people who sit on their boards that are either parents, employees or are related to employees of the district that they serve.”

The California Charter Schools Association and California Teachers Association on Monday said the Legislature should take a hard look at whether for-profit companies like K12 should be operating schools in California and whether the state can do more to ensure charter schools are overseen properly.

“When taxpayer money is used to fund education, those dollars should go to help kids,” said California Teachers Association President Eric Heins. “In this case, we have no idea how the company is spending our tax dollars and it’s not right. This is pretty basic stuff.”

Online charter schools only work with a fraction of the kids enrolled in California’s roughly 1,200 charters, but that doesn’t mean they should be held to a lower standard of accountability, said Emily Bertelli, a spokeswoman for the California Charter Schools Association, which publicly called for the closure of a K12-run school in 2011 only to see the school reopened with a new name under the same authorizer.

Former Tennessee Education Commissioner Kevin Huffman said in an interview Monday that none of the newspaper’s findings surprised him. He said he’d seen many of the same issues unfold in his state, where he tried, and failed to shut down K12’s Tennessee Virtual Academy because of poor performance.

“This company’s efforts to grow bear no relationship whatsoever to the quality of their results in California and across the country,” Huffman said.

“You would hope that an online virtual school — especially one run by a for-profit company — would only have the opportunity to grow with really high-quality results,” Huffman said. “K12 isn’t coming close to meeting a high bar in terms of quality.”

One Redwood City parent who contacted this newspaper, saying the investigative series “hit close to home,” said his son, who is now a sophomore in college, took K12’s advanced courses, earned A’s and B’s and finished at the top of his class when he was a student at one of the company-run California schools. But when his son applied to a local community college, he was stunned to learn he had to take remedial math and English courses because he was so far behind.

Other parents, however, contacted the newspaper to defend the schools, saying the online learning model was vital to their sons’ and daughters’ academic success.

Maureen Behlen said her son thrived in K12’s school because she “put everything into it,” spending several hours a day teaching him and guiding him through his coursework. She said an online school isn’t the right fit for families who can’t devote as much time to the program as she did.

“Would you send a bunch of kids into a classroom with no teachers? Of course not,” said Behlen, who lives in the foothills in East San Jose. “There has to be an adult responsible for overseeing what they’re learning, and if there isn’t, you’re setting them up to fail.”

Contact Jessica Calefati at 916-441-2101. Follow her at Twitter.com/Calefati.

Crumbling Foundations 7

Don’t fool Idaho, either


By Bill Cope

“The more desperate parents can be convinced that the public system is beyond salvation, the better positioned education-for-profit interests are.”

—from “Crumbling Foundations 1,” Feb. 16, 2011

If quoting myself from five years ago seems self-indulgent, forgive me. But after running this series through seven installments from 2011 to March 3, 2016, I’ve never found anything else said that nails more succinctly what I, and others, believe the J.A. and Kathryn Albertson Foundation is up to.

That quote is exactly what the foundation’s meddling in the politics of public education is about: Parents, who understandably want the best future for their children, are being sold the false and frightening notion that if they don’t allow politicians to direct more and more public monies dedicated to education into for-profit ventures, their kids will suffer the consequences.

I resurrected this series in response to the foundation’s latest spiel—its ubiquitous ad featuring a kid getting on the bus at school, but not showing up as expected at home.

If I believed the sole motive behind that ad was to promote the best solutions to problems no one can honestly deny are plaguing modern education, I wouldn’t be as outraged at the disingenuousness of it. But for at least 15 years, key players in the Albertson Foundation have been investing—heavily—in the very thing they are so heavily promoting. This has to do with much more than our nation’s education policies. If you’ve ever wondered how the very rich just keep getting richer—how the rush of wealth to the “1 percent” never seems to even slow down, let alone stop—the influence that Foundation leaders have exerted on Idaho politics with ample complicity from Idaho politicians can be considered a manual on how, with enough money priming the right pumps, one can gain access to that great aquifer of steady revenue: the American taxpayer.

Following is a timeline assembled largely by Grove Koger, a lifelong friend and a very picky researcher. Further information came from an Associated Press probe into the relationships between the foundation, at least one member of the corporate for-profit education community and ex-Superintendent of Public Instruction Tom Luna’s push to radically reform Idaho’s schools.

There is nothing new about any of this. Most of it relates to the decade leading to Luna’s reform scheme. But as the Albertson Foundation has shown, it refuses to give up on making that scheme a reality, so must we keep reminding ourselves why we rejected it so decisively.

• Together, Joseph Scott—the grandson of Joe and Kathryn Albertson and heir to much of their fortune—and his business partner, Thomas Wilford, founded Alscott Inc., an investment arm of the Albertson-Scott family. Wilford was installed as president of the business concern in 1993. From 1995 to 2003, he was also the president of the Albertson Foundation. Even now, Alscott and the foundation share the same address and, at least until 2011, the same phone number.

• In 2002, the Idaho Virtual Academy was created with administrative direction and educational material provided by K12, Inc., the Virginia-based source of online education founded three years earlier by Bill Bennett, former secretary of education. Bennett had contributed $1,000 to Tom Luna’s first, and failed, 2002 campaign.

That same year, while still the president of the Albertson Foundation, Wilford was appointed a seat on the K12, Inc., board of directors. The next year, he was named CEO of the foundation.

• By 2005, the foundation was handing out grants to charter schools, including the Idaho Virtual Academy, which has grown to be the state’s largest online public charter school. Its curriculum was (and is) provided in full by K12. Wilford contributed to Luna’s 2006 campaign, as did out-of-state for-profit education concerns, including K12, whose campaign contributions ran into several thousands of dollars. Wilford’s compensation as a K12 director soared from less than $500 in 2007 to $107,114 in 2010.

• In 2011, immediately after re-election, Luna introduced his reforms, relying heavily on charter schools and for-profit curriculum providers for solutions to Idaho’s public education woes—woes that were largely the result of inadequate funding from the same state leaders who supported Luna. Even while the foundation was running expensive ads in newspapers across Idaho hawking those reforms, Alscott Inc. held 826,000 shares in K12, Inc. By then, Idaho public monies going to K12 coffers was running into the tens of millions of dollars a year. Wrote Joe Miller of the AP: “All the while [Joseph] Scott’s family’s education foundation was actively promoting Idaho’s fledgling online education programs—something Luna has made a centerpiece of his reforms.” The siphoning of those public monies continues to this day.

I have never claimed there isn’t room for improvement in our public schools. But the two most horrifying and damaging blunders Idaho could make is handing over our public schools and/or our public lands to private interests. Once we go there on either, we’ll never get them back.

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K12 Inc. Tries to Pivot from Virtual School Failures to Profit from “Non-Managed” Schools

By Dustin Beilke on January 7, 2016 – 9:01am





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If you were a public school and Wall Street didn’t like you that might not seem like such a big deal. What do financiers know about educating children? It’s a big deal, however, if you are K12, Inc., and enticing investors to buy into your low-cost, high yield “cyber school” idea is key to your bottom line.

At K12, Inc.’s stockholder meeting in December, its own investors criticized the schools’ lamentable academic performance and voted down its executives’ proposed salary increases. This is just the latest piece of bad news, which has been coming in rafts for K12 since 2013.

As K12’s executives were being rebuffed by stockholders inside the law offices of Latham & Watkins, in Washington, D.C., outside K12 was picketed by members of the California Teachers Association for more or less the same list of educational shortcomings, as Diane Ravitch noted.

Some editorial boards crow when they receive criticism from two opposing sides of a controversial issue. “If both sides are unhappy we must be doing something right” is the familiar refrain, as if there are only ever two sides to an issue or the sides have equal merit.

In the case of K12, however, it is hard not to wonder how much longer the company can withstand this loud unanimity of animus–even a firm Wall Street insiders like convicted fraudster Michael Milken helped launch, as the Center for Media and Democracy (CMD) detailed in “From Junk Bonds to Junk Schools: Cyber Schools Fleece Taxpayers with Phantom Students and Failing Grades.”

No major supporters have yet publicly called for pulling the plug, but anti-public education zealots like the billionaire Walton family and the Koch brothers have plenty of other places to invest in to try to bring down “government schools.”

Big, Big Payouts to Execs at Taxpayer Expense

In its recommendation that shareholders vote against the pay proposal, the advisory firm Glass Lewis & Co. said K12 exemplifies a “substantial disconnect between compensation and performance results.” Glass Lewis gave the company an “F” for how it paid its executives compared to peers.

In 2015, K12 CEO Nathaniel Davis was making $5.3 million and CFO James Rhyu was making $3.6 million. Their base salaries were $700,000 and 478,500, respectively, which were dwarfed by additional pay and stock for their “performance.” (See more details on their total compensation in the pdf uploaded below.)

In all, K12’s five highest paid executives received a total of more than $12 million in compensation last year. That’s one of the reasons CMD has called K12 Inc.’s former CEO, Ron Packard, the highest paid elementary and secondary school educator in the nation.

Nearly 90% of K12’s revenues–and thus its huge pay for executives–come from Americans’ state or federal tax dollars.

K12 Inc. also pays each member of its Board of Directors between $155,000 and $216,000 annually for a few hours of work each year—far more than local school board members make for much more time spent in general. (See uploaded K12 proxy filings below for the details.)

While K12’s promoters love to mention that it is a publicly traded company, it is also trading at its lowest stock price since 2010, down 75 percent from its September 2013 peak.

Meanwhile, a new report from Stanford University’s Center for Research of Education Outcomes (CREDO) found that online charters do a very poor job of educating children. In general, students in online charters lose 42 days of reading in a year, and 180 days of instruction in math. And there are only 180 days of instruction in most public school years.

Enrollment has also dropped almost 5 percent from its peak. No less a business authority than Bloomberg Business investigative reporter John Hechinger presented grim prospects for K12 as of late 2014, and no one has revised them upward.

Millions in K12 Ads at Taxpayer Expense Too

This decrease in business has come despite massive advertising and marketing expenditures by the virtual schools industry. K12 has spent untold millions in public funds on ads—a luxury budget item that traditional public schools are not permitted even when competing with K12 for students.

It spent at least $20 million on ads in 2012 alone, but it has not publicly disclosed ad spending in recent years even as its ads have become more ubiquitous in markets like Wisconsin and Arizona, for example. K12 does not disclose its ad budget in its public annual report.

Plus Taxpayer Money Helps K12 Pay to Play with ALEC Politicians

K12 also spends taxpayer money lobbying state and federal officials. It recently got a seat, for example, on the corporate board of the American Legislative Exchange Council (ALEC), where for years it has also paid for a seat and vote on ALEC’s “Education and Workforce Development” Task Force, which advances a “cash for kids” lobbying agenda.

ALEC corporations spend tens of thousands of dollars each year for such access to lawmakers, and K12 has also paid many thousands of dollars to underwrite some of ALEC’s docket of events for legislators and lobbyists.

Through the ALEC Task Force, K12 has actually had an equal vote with state legislators on so-called “model” bills to divert taxpayer funds away from traditional public schools toward the objectives of ALEC’s private sector funders, to help their bottom-lines and/or legislative agenda.

ALEC’s “Virtual Public Schools Act,” for example, even allows virtual schools to be paid the same amount per pupil as traditional public schools even though operations like K12 have no bricks and mortar school house or desks or air-conditioning or gyms, etc., to maintain.

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As CMD’s SourceWatch has documented:

“In 2004 when the ‘model’ bill was drafted and approved, both K12 Inc. and Connections Academy were part of the ‘School Choice Subcommittee of ALEC’s Education Task Force, according to an archived version of ALEC’s website from February 2005. The subcommittee recommended six bills for adoption, including the ‘Virtual Public Schools Act.’ According to ALEC, the bill was drafted by Bryan Flood of K12 along with Mickey Revenaugh of Connections Academy, then-Colorado Representative Don Lee (now a lobbyist for K12, see [below]), ‘and the rest of the Subcommittee.'” (Connections is now part of Pearson PLC, a British mega-corporation headquartered in London.)

K12’s reps at ALEC Education Task Force meetings have been its Senior VP for Government Affairs (lobbying), Bryan Flood, along with its VP for Government Affairs, Don Lee, and its Senior Director of Government Affairs, Bob Fairbank.

ALEC’s Education Task Force is co-chaired by Utah state Sen. Howard Stephenson (R-11). Through the ALEC corporate bill mill, Stephenson has even done a roadshow with K12’s Don Lee to drive more business to K12 through legislation. Given his advocacy of efforts to divert tax dollars from traditional public schools to charters and virtual schools, some press in Utah have questioned whether Stephenson is a public servant or a lobbyist for outside interests. (There is no way to independently verify whether Stephenson has actually ever invested in K12 or Pearson, or not.)

Notably, Lee and Fairbank are both former Colorado state legislators who took the revolving door out of public service into well-paid gigs, like peddling what K12 is selling to legislatures across the country. And, the head of their lobbying shop, Flood, is the former flack for then-Gov. John Engler of Michigan, who is now pulling down big bucks for sitting on K12’s Board of Directors: $55,000 in cash plus $100,000 in K12 stock for a few hours of his time last year.

Making “Friends” Everywhere K12 Goes….

Utah, Arizona, and Wisconsin are not the only states where K12 is active and facing criticism. The “Ohio Virtual Academy,” for example, which accounted for 10 percent of K12’s revenue in 2014, received failing grades on a state report card for student test-score progress and graduation rates. A state analysis found that only 37 percent of K12’s Ohio ninth graders earned diplomas within four years.

K12’s operations in California have produced similar results, as In the Public Interest (ITPI) has documented, despite K12’s efforts to blame the state. (CMD has partnered with ITPI on research previously.)

Several online charters have cancelled their contracts with K12, and in Tennessee, education commissioner Kevin Huffman called for shuttering the Tennessee Virtual Academy because it had test results “in the bottom of the bottom tier” and is an “abject failure.”

Altogether, K12 has lost management contracts or been threatened with school shutdowns in five states.

The National Collegiate Athletic Association (NCAA) also ruled last April that prospective students from 24 K12 Inc. high schools can no longer count credits toward athletic scholarships.

A pro-union decision by the California Public Employment Relations Board no doubt came as more bad news for K12’s brass. The board ruled that the California Teachers Association (CTA) is the exclusive bargaining agent of the more than 750 teachers at the Simi Valley-based California Virtual Academies (CAVA). Teachers have been seeking a stronger voice in improving working conditions and student learning for CAVA’s 15,000 students.

CAVA teachers had been calling for improvements for years. In March 2015 a study of CAVA by ITPI called for better oversight. In June 2015, CTA filed complaints with school districts that authorized CAVA charters throughout California.

K12 Hoping “Non-Managed” Schools Will Save It?

While no one is publicly calling for K12 to shut down, K12 itself is “diversifying its portfolio” in an apparent effort to ease out of the online charter school business.

K12 has built its brand by operating “managed schools” in which K12 runs and profits from all of the programs at a particular K12 school. In a managed school, the company does all of the teaching, curriculum, assessment for the customers—er, students—who choose it over attending a public school or participating in a traditional home-schooling arrangement.

The new revenue stream K12 is pioneering is in what it is now calling “non-managed schools” in which K12 sells the digital content and platform for a school for some other company or entity to run (and be responsible for the results). Non-managed programs have been growing by leaps and bounds as managed virtual schools have fallen on hard times.

The only problem with this model is that managed schools still bring in much more money than the non-managed kind. Some managed schools, for example, bring in $1,849 per student while non-managed schools bring in only $462 per pupil on average.

But, getting some revenue without being responsible for results may be the way for the future of K12: an analysis of K12 figures comparing September 2015 to the prior year showed that enrollment at “managed” virtual schools was declining 12 percent while it is increasing 34.5 percent at “non-managed” schools.

Non-management could take profiting from taking money out of traditional public schools without real accountability to a new level for K12.


CMD’s Executive Director Lisa Graves contributed research to this report.

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End of Year 2015 Proxy Statement with Exec Compensation for K12 1.13 MB
Dustin Beilke

Dustin Beilke is a freelance writer from Madison, WI. He has written for a number of publications, including Newsday, Salon.com, The Nation, The Progressive, In These Times, Mother Jones, The Capital Times, and The Onion.

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Investigation: Founder cashed in on Wellington’s Eagle Arts charter

Updated: 4:31 p.m. Thursday, July 9, 2015Posted: 4:31 p.m. Thursday, July 9, 2015

By Andrew Marra


Palm Beach Post Staff Writer

WELLINGTON —

Eagle Arts Academy, one of Palm Beach County’s largest charter schools, opened last August with the goal of establishing a performing arts mecca for children on a sprawling campus in the heart of Wellington.

But while the publicly funded school ran up hundreds of thousands of dollars in debt and struggled to put in place its arts-infused curriculum, a Palm Beach Post investigation has found that it served a very different purpose: filling the bank accounts of its founder’s private businesses.

As the K-8 school opened last year, Eagle Arts Academy required its roughly 680 students to buy high-priced uniform shirts from a company set up by founder Gregory James Blount, a former model and events producer.

Though Blount’s company marketed itself to parents and the county school board as a “foundation” to support Eagle Arts, The Post found that the company is not a federally recognized nonprofit and that little of its revenue from uniform sales went to the school.

Blount’s company also offered after-school courses to students but charged them for the classes and kept the profits, Blount admitted. Though his business operated on school grounds for three months, records and interviews show it did so with no lease and paid no rent, an arrangement that a school district administrator called “unusual.”

While that company drew tens of thousands of dollars from Eagle Art’s students, another of Blount’s companies made more than $125,000 in taxpayer dollars from the school through a contract he obtained while serving as the school’s volunteer chairman.

Blount, 46, won the money by arranging for his company to receive a contract to create the school’s arts-infused curriculum, despite the fact that he had no education background and had never designed a curriculum.

Little oversight

on finances

Though Eagle Arts is a nonprofit school, Blount’s efforts to steer parents’ cash and public tax dollars toward his own businesses offer a glimpse into the ways that charters, which are operated with public money but little independent oversight, can become profit centers for their managers and founders.

Florida’s lax charter school regulations let people with little education experience open schools that draw millions of taxpayer dollars if enough students enroll. Too often, critics say, weak oversight sets the stage for financial self-dealing.

“Do we like it? No,” said Jim Pegg, who oversees the county’s charter schools for the Palm Beach County School District. “Is it legal? Yes.”

Blount’s money-making didn’t stop with those two companies. Records show he drew an additional $7,500 from the school through a third business, Sound Tree Entertainment, for consulting services. Sound Tree is also poised to earn thousands of dollars in interest from Eagle Arts after loaning it nearly $39,000 at a 7.5 percent compound interest rate, school records show.

Founder concedes:

I made mistakes

Eagle Arts’ charter with the school board prohibits its board members from profiting from the school, stating that “no member of the school’s governing board shall receive compensation, directly or indirectly, from the school’s operations.”

But Pegg said that Blount avoided any violation of the school’s charter by resigning as chairman in the weeks before the charter went into effect, then resuming his position after his business relationships with the school had ended.

In an interview, Blount told The Post that he “made mistakes” while getting the school started. But he said he broke no laws, and that everything he did was in the interest of opening the school quickly and transforming the educational experience of its students.

“It’s not like I was ever out there saying, ‘How does Greg make money off this every step of the way?’” he said.

Instead, Blount blamed his business arrangements on bad advice from the school’s management company and logistical problems that he said required him to offer up his own businesses as solutions.

“I worked 80-hour work weeks from March 2014 to August 2014 to open the school,” he said. He added that “we opened the school a year early.”

With the school’s first year completed, many parents defend Blount, saying that his financial dealings don’t detract from his leadership.

“Gregory is a revolutionist, and I have no worries in regards to the financial future of Eagle Arts,” said Amy Ackerman, who enrolled her daughter in second grade at the school last year. “I believe that they are paving the way to a much brighter education in Wellington and the surrounding areas.”

But even in Blount’s telling, the prospect of making money in Florida’s booming charter school industry was on his mind from the beginning. More than $1.5 billion a year in state money flows into Florida’s charter schools, which are spreading quickly across the state and now total more than 650.

Blount said he became interested in starting a charter school after emerging from personal bankruptcy in 2010 and operating a small business that gave acting and modeling classes.

His motives, he said, were two-fold: to create a new learning style that teaches traditional subjects through technology and arts, and to build a business selling it.

Curriculum expert,

founder clash

To open the school and run it, Blount enlisted Liz Knowles, a longtime educator and former administrator at the private Pine Crest School in Fort Lauderdale. It was Knowles who would have run the school and designed the curriculum, which Blount named “Artademics.”

But Knowles told The Post that she and Blount soon clashed. One of the final straws, she said, was when she learned he had started a company and named it after their curriculum, Artademics, without telling her.

When she confronted him about it, she recalled, he sought to put her at ease.

“He said, ‘Don’t worry, Liz. You’ll be rich,’” Knowles recalled. Blount denied making the comment.

But Knowles decided she couldn’t work with him and left shortly before the school year began, taking her draft of the school’s new curriculum with her.

By then, Blount’s company had obtained the contract to write what the school already was touting as its signature curriculum. With Knowles gone, he undertook the project himself.

Blount said that “I don’t claim to be an educator.” But he hired people with teaching backgrounds to help him, including, he said, a teacher on the school’s staff.

Starting in September, Blount’s company pulled in more than $127,000 from school coffers during a seven-month period, records show. The money was steered to the company through the school’s management company, iSchools, which contracted with Artademics at the board of directors’ request.

Yet months passed without the curriculum making an appearance at Eagle Arts.

After protests from parents and the departure of dozens of students, the school’s management company warned him in November that he would be in breach of his contract if he didn’t deliver the curriculum soon. He turned in the first installment weeks later.

A copy of the curriculum reviewed by The Post shows that it calls for students to read classic children’s books like Peter Pan and Alice in Wonderland and do reading- or math-based exercises afterward, such as counting balloons, inventing additional characters or creating paper cut-outs of Victorian homes.

Blount pointed out that he did not keep all of the money that Artademics earned.

“The money that went to Artademics LLC did not go directly to me,” he said. “It went to my company, which has consultants working to develop the curriculum.”

‘Foundation’ profited

from uniforms, classes

While Blount pulled payments from the school through Artademics, his “foundation” sold the school’s roughly 680 students their mandatory uniform shirts and provided after-hours lessons — all at a markup.

Blount declined to provide specifics about his company’s uniform sales. But a sales receipt shows his company charged $24 for polo shirts, 50 percent more than some other area charter schools charge. Students at the Somerset Academy and the Renaissance Charter School chains, for instance, pay about $16 for similar shirts.

Blount defended his prices, saying that they included the cost of stitching on the school’s eagle logo, to which Blount said he owns the copyright.

“The cost and quality of the uniform tops are comparable to other schools and uniform stores,” he said.

Thais Gonzalez, a parent who has been critical of the school’s management, said the shirt prices seemed high when she ordered four last year for her two enrolled children. But she said she didn’t mind because she thought the money was going to a nonprofit foundation supporting Eagle Arts.

“I was happy to do it because it was supporting my children’s school,” she said.

But while Blount said his company, EMPPAC Foundation, bought some equipment for students to use at the school, he admitted that his company kept nearly all of the money, with most of it going to his fiancée’s salary.

Blount initially told The Post that EMPPAC donated only a few cameras to the school. But on Thursday, he said that it had also provided other services, including lighting equipment, the use of a phone and website design.

“The foundation incurred thousands of dollars in expenses on behalf of the school,” he said.

He also said Thursday that “there was a check from the EMPPAC foundation to the school.” But a spokeswoman for Eagle Arts, responding to a public records request, said previously in a statement that the school had no official record of any donations from the company.

Though Eagle Arts billed Blount’s company as a “foundation” to the county school board, IRS records show the company is not a federally recognized foundation or other nonprofit. While the company lists itself as a nonprofit on state corporate filings, Blount said the company pays federal taxes and effectively operates as a for-profit business under federal law.

He said his company intends to apply to the IRS for non-profit status.

Even so, records and interviews show Eagle Arts allowed EMPPAC to sell its after-school courses to students on campus for three months without signing a lease or paying the school for the use of its space. Blount said he requested a lease from the school but was never given one.

Pegg called the arrangement “unusual” but said that giving a company free access to its campus was the school’s prerogative.

‘At some point I’ve

got to make a living’

EMPPAC’s money-making activities at the school stopped in January, Blount said, and Artademics stopped drawing payments in April as the school separated from its private management company, which oversaw Artademics’ contract.

Blount resumed his position as chairman of the school’s board of directors in May, barring him or his companies from profiting from the school. Records show, though, that one of Blount’s companies, Sound Tree Entertainment, still stands to collect thousands of dollars in interest from its loan to the school.

Blount said that the payments to Sound Tree are intended to compensate him for costs he incurred in drawing up the school’s 130-page application to the school board.

“As for Sound Tree, the school would not be in existence if I did not spend the thousands of hours to write and then re-write the charter application,” he said.

He added that he “rented space in Delray Beach to work from at $2,600 a month and yet did not charge the school for the years of shared rent during the charter-writing process.”

Though he acknowledged missteps, Blount said he devoted countless hours to setting up Eagle Arts. The school opened a year earlier than initially planned, he said, causing a rush to get things arranged last summer.

“If I’d had this last year, I wouldn’t have made those mistakes,” he said.

He said he is still designing a curriculum for the school but will now donate his work.

Still, although board members serve as volunteers, Blount argued he was entitled to compensation for his work.

“What you’re missing is the thousand-plus hours I spent at this school,” he said. “At some point I’ve got to make a living.”

Maria Ironstone, the school’s parent liaison, said that the school has had “challenges” but that Blount has the support of parents.

“I have worked with many amazing people in my career, but never one as dedicated to the cause as Mr. Blount,” she said in an email. “Since he became chairman of the board we are back on track with our vision.”

The school district said that the school has run up hundreds of thousands of dollars in debts to its management company and a contractor, raising worries about its financial future and setting the stage for possible litigation.

But Eagle Arts plans to open this August with what Blount says he hopes will be an even larger enrollment.

“Did we make mistakes? Yes. What company doesn’t make mistakes?” Blount said. “We’re intent on fixing them and moving forward.”

Staff researcher Melanie Mena contributed to this story.

Governor Brown has until October 11 to sign or veto legislation that would ban for-profit charter schools in California. it is outrageous to squander taxpayer dollars on profits for investors and outrageous executive salaries. This bill should be a slam dunk for Governor Brown, a man with a keen sense of justice. Now I hope the legislature tightens oversight of nonprofit charter schools and reviews their executive salaries to be sure that they really are nonprofit. And while they are at it, they should ban charter schools in affluent communities, which violate the spirit if the charter movement, which wassupposedto help the neediest kids, not to enable rich parents to create a publicly-funded private school for their children.

Here is the legislation awaiting Governor Brown’s signature:

“For-profit charter schools: Charter schools run by for-profit corporations would not be allowed in California under the terms of AB 787, authored by Assemblyman Roger Hernández, D-West Covina, which passed the Legislature. Six for-profit charter schools operate in the state, and California Virtual Academies, managed by the for-profit K12 Inc., is the largest. The bill’s author noted that K12 paid its top six executives a total of nearly $11 million in 2011-12, while the average California Virtual Academies teacher’s salary was $36,150, about half of the average teacher pay in the state. The author raised the question of whether a for-profit corporation would try to limit services to students to increase profits.”

via Diane Ravitch’s blog http://ift.tt/1PNH93t

Governor Brown has until October 11 to sign or veto legislation that would ban for-profit charter schools in California. it is outrageous to squander taxpayer dollars on profits for investors and outrageous executive salaries. This bill should be a slam dunk for Governor Brown, a man with a keen sense of justice. Now I hope the legislature tightens oversight of nonprofit charter schools and reviews their executive salaries to be sure that they really are nonprofit. And while they are at it, they should ban charter schools in affluent communities, which violate the spirit if the charter movement, which wassupposedto help the neediest kids, not to enable rich parents to create a publicly-funded private school for their children.

Here is the legislation awaiting Governor Brown’s signature:

“For-profit charter schools: Charter schools run by for-profit corporations would not be allowed in California under the terms of AB 787, authored by Assemblyman Roger Hernández, D-West Covina, which passed the Legislature. Six for-profit charter schools operate in the state, and California Virtual Academies, managed by the for-profit K12 Inc., is the largest. The bill’s author noted that K12 paid its top six executives a total of nearly $11 million in 2011-12, while the average California Virtual Academies teacher’s salary was $36,150, about half of the average teacher pay in the state. The author raised the question of whether a for-profit corporation would try to limit services to students to increase profits.”

via Diane Ravitch’s blog http://ift.tt/1PNH93t

Governor Brown has until October 11 to sign or veto legislation that would ban for-profit charter schools in California. it is outrageous to squander taxpayer dollars on profits for investors and outrageous executive salaries. This bill should be a slam dunk for Governor Brown, a man with a keen sense of justice. Now I hope the legislature tightens oversight of nonprofit charter schools and reviews their executive salaries to be sure that they really are nonprofit. And while they are at it, they should ban charter schools in affluent communities, which violate the spirit if the charter movement, which wassupposedto help the neediest kids, not to enable rich parents to create a publicly-funded private school for their children.

Here is the legislation awaiting Governor Brown’s signature:

“For-profit charter schools: Charter schools run by for-profit corporations would not be allowed in California under the terms of AB 787, authored by Assemblyman Roger Hernández, D-West Covina, which passed the Legislature. Six for-profit charter schools operate in the state, and California Virtual Academies, managed by the for-profit K12 Inc., is the largest. The bill’s author noted that K12 paid its top six executives a total of nearly $11 million in 2011-12, while the average California Virtual Academies teacher’s salary was $36,150, about half of the average teacher pay in the state. The author raised the question of whether a for-profit corporation would try to limit services to students to increase profits.”

via Diane Ravitch’s blog http://ift.tt/1PNH93t