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OVERLOOKED ISSUES PERTAINING TO JEFFCO CHARTER SCHOOLS Prepared By: Don Oatman January 2016 1
OVERLOOKED ISSUES PERTAINING TO JEFFCO CHARTER SCHOOLS
TABLE OF CONTENTS Introduction Executive Summary Issue Number One -‐ Differing Charter School Circumstances Issue Number two -‐ Types of Charter Schools Issue Number Three -‐ Nonresident Students in Jeffco Charter Schools Issue Number Four -‐ Student Mobility in Charter Schools Issue Number Five -‐ Charter Schools Capital Improvements and Debt Service Issues Issue Number Six -‐ Perceptions of Financial Transparency and Charter School Audits Issue Number Seven -‐ Charter School Student Performance Issue Number Eight -‐ Issues Not Addressed and Further Questions Attachment A -‐ Materials Pertaining to Doral Inc. and Academica
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INTRODUCTION The topic of charter schools in Jefferson County has generated discussion in recent years, however these discussions seem to be focused on only one or two basic aspects of a more complex issue. The purpose of this review is to discuss of some of the overlooked issues involving charter schools in Jefferson County. Topics addressed in this review include the following: • • • • • • • • •
Differing Charter School Circumstances; Types of Charter Schools; Nonresident Students in Jeffco Charter Schools; Student Mobility in Charter Schools; Charter Schools Capital Improvements and Debt Service Issues; Perceptions of Financial Transparency and Charter School Audits; Charter School Student Performance; Issues Not Addressed and Further Questions; and Attachment A-‐Materials Pertaining to Doral Inc. and Academica.
All of the information included in this review has been gathered from public sources, to include materials available from the Colorado Department of Education (CDE), Jeffco schools, web sites of the individual charter schools and many other public sources. There have been no discussions with any individuals involved with the Jefferson County School District or the individual charter schools nor has there been any request for data from the individual schools or from representatives of the Jefferson County School District. One unusual situation involves the CDE data associated with the Jefferson Academy. The school web pages for Jefferson Academy identify three schools, an elementary, junior high and senior high and it appears that all of the schools within Jefferson Academy represent a single school authorized by the Jefferson County Board of Education. The CDE reports identify these three schools, however, the CDE data for the junior high includes enrollment for a K-‐12 program. For purposes of this review, the Jefferson Academy CDE information is identified consistent with the CDE materials which include; Elementary School, K-‐12 School (instead of Junior High School), and Senior High School. Exhibits in this review encompass differing fiscal years based on the availability and sources of the information. For example, information taken from the CDE report, The State of Charter Schools in Colorado includes data for 2011-‐2012 with the majority of the data from other CDE materials and the charter school audited Basic Financial Statements are for the 2013-‐2014 fiscal year. This Review has been prepared to identify overlooked issues associated with charter schools and is an effort to provide the Jeffco Board of Education with background to consider when reviewing future charter school applications or renewal of agreements with existing charter schools.
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EXECUTIVE SUMMARY There has been a great deal of information pertaining to Jeffco charter schools in recent years, to include editorials in the Denver Post, and publications by the Jefferson County League of Women Voters. The Colorado Department of Education (CDE) has also undertaken studies and provides information regarding all schools in Colorado, to include charter schools. These materials along with a number of national publications provide generalizations regarding the cost and test scores associated with charter schools, however, they often overlook other related issues that impact the cost and management of school districts and their relationship with charter schools. This review is an effort to identify and discuss seven often overlooked issues involving charter schools in Jeffco as well as an eighth item which identifies other related issues not reviewed. Also included are a number of questions which arise from this review and the identification of a number of programs to support charter schools provided by CDE. Issue Number One –Differing Charter School Circumstances Most studies regarding charter schools identify information pertaining to all charter schools and fail to reference the varying situations pertaining to charter schools within individual districts or in comparison to other districts. A Denver Post editorial discussed the success the Denver Public Schools (DPS) were having with charter schools and chided Jeffco for focusing on fiscal issues and not addressing the needs of the students. This editorial does not identify the circumstances pertaining to the students being served by charter schools in the two districts. DPS has made a major effort to upgrade the educational experience for at risk students who may have difficulty achieving success in a traditional school setting. Jeffco has a number of at risk students, however, the majority of the Jeffco charter schools tend not to address at risk students, but are providing options for more traditional students. Of the 31 DPS charter schools identified in the CDE publication, The State of Charter Schools in Colorado, published in 2013, a total of 27 of these schools had a free and reduced (FRL) percentage of students over 50 percent and four had an FRL percentage below 50 percent. In DPS, 75 percent of the charter school students qualify for FRL. Jeffco had 15 charter schools with FRL of under 50 percent with one school in excess of this number. In Jeffco, 13 percent of the charter school students qualified for FRL with the two Compass Montessori Charter Schools having no students qualifying for FRL. Information for Jeffco and Douglas County, another suburban school district, indicates a dramatic difference between the students served by charter schools in urban settings such as DPS and those served in Jeffco and Douglas County. Three additional charter schools have been authorized by the Jeffco Board of Education since the CDE report was completed. None of these schools have identified a goal of serving at-‐risk students. 4
Issue Number Two – Types of Charter Schools As of August 2015, the Jeffco Board of Education had authorized 16 charter schools. The backgrounds and nature of these schools vary; one (the New America School-‐Lakewood) is an English Language Learners program associated with a Charter Management Organization (CMO), one (Rocky Mountain Deaf School) involves Deaf Education, and one (Two Roads Charter School) has a home school/traditional program. Six are identified as core knowledge schools, and seven are based on three programs originally established by private schools. The newest charter school, Golden View Classical Academy and the most recently authorized charter school, Doral Academy are both associated with national entities, one (Golden View) is a non-‐profit Charter Management Organization (CMO) and the second (Doral Academy) is a for-‐profit Education Management (EMO) Organization. The Jeffco charter schools based on educational programs provided by private educational programs include Montessori Schools (four in Jeffco ), Waldorf Schools (one in Jeffco) and Classical Schools (two in Jeffco). Montessori Charter Schools A CDE report, The State of Charter Schools in Colorado indicates there were seven Montessori charter schools in Colorado at the time of the study in 2012, with four being in Jefferson County. Some Montessori schools serve students through grade 12, however, over 90 percent of Montessori schools nationwide provide programs for children ages 3 through 6. The Montessori name can be used by anyone starting a school that is based on the teachings of Dr. Maria Montessori as there is no copyright or trademark restrictions related to the use of the Montessori name. An organization entitled the American Montessori Society (AMS) provides a number of support activities for Montessori schools along with an official recognition/accreditation program. There are 11 AMS members in Colorado, Six of which are private Montessori schools serving students PK-‐8 with tuition rates ranging from $12,350 to $16,095 annually. Two of these six Montessori schools are located in Jefferson County. There are four Colorado non-‐Jeffco charter schools, all of which are members of AMS; of the four Montessori charter schools in Jeffco, only one is a member of AMS. Waldorf Charter Schools Waldorf schools are based on the trademarked principles of Rudolf Steiner which include a focus on “experiencing, not just reading about, music, dance, theater, writing, literature, legends and myths.” There are over 150 private Waldorf schools associated with the Association of Waldorf Schools of North America (AWSNA), an organization “founded in 1968 to assist schools and institutes in working together to strengthen and nurture Waldorf Education and to advance Waldorf principles.” There are five private Waldorf Schools in Colorado with annual tuition rates ranging from $11,300 to $17,995. A number of charter schools identified as “Waldorf” schools have been established nationally, resulting in the creation of a national association entitled the Alliance for Public Waldorf Education (the Alliance). There have been issues regarding the use of the “Waldorf” name and AWSNA and the Alliance recently entered into an agreement establishing a requirement for charter schools to acknowledge in all printed 5
and electronic medium that “Public Waldorf ™” is a service mark owned by AWSNA and is used pursuant to license. The Mountain Phoenix Community School is identified as a “Jeffco charter school Guided by the Core Principles of Public Waldorf Education.” It appears the Mountain Phoenix Community School has not referenced the Waldorf name consistent with the agreement entered into between AWSNA and the Alliance. Classical Charter Schools There are currently two classical charter schools authorized by the Jeffco Board of Education. They are Addenbrooke Academy which has recently expanded to include two schools (Addenbrooke Classical Grammar School and Addenbrooke Classical Academy), and the recently approved Golden View Classical Academy which began enrolling students for the 2015-‐2016 school year. The curriculum for these schools is based on the concept of Trivium education which consists of the “first three phases of the liberating arts which involve letter, qualities, and mind.” This is an educational approach used by Classical Christian private schools with annual tuition ranging from $3,000 to $7,500 per student. The only national organization involved with classical schools is the Association of Classical Christian Schools (ACCS) which provides an accreditation program for Classical Christian Schools, of which there are five located in Colorado. Three other non-‐ACCS member Colorado Christian Classical Schools have been identified and beyond the two classical charter schools in Jeffco, there are also four additional Classical Charter Schools in Colorado. All non-‐charter Classical Schools in Colorado are identified as Christian Classical Schools. Colorado Revised Statutes 22-‐30.5-‐104. Charter School – requirements-‐ authority states: “A charter school shall be a public nonsectarian, non-‐religious, non-‐home-‐based school which operates within a public school district.” Both the Addenbrooke and Golden View Classical Schools, although not formally identified as religious entities, have close relationships with religious organizations. The Addenbrooke Academy, until 2015-‐ 2016 was located in a church facility and the board chair has been active as a pastor for many years. The Golden View Classical Academy is affiliated with the Hillsdale College Barney Charter School Initiative. Hillsdale College materials state: As noted in its Articles of Association, “the College undertakes its work “grateful to God for the inestimable blessings resulting from the prevalence of civil and religious liberty and intelligent piety in the land, and believing that the diffusion of sound learning is essential to the perpetuity of these blessings.” The Golden view Classical School is seeking to develop a partnership with Colorado Christian University (CCU) to “partner with a teacher-‐training program considering a track in classical education would be of value to Golden View Classical as would having access to staff and facilities for the Golden View Classical music program.” CCU has a Mission Statement and Statement of Faith that emphasize religious beliefs. 6
National School Management Organizations The most recent charter approvals represent national organizations; Golden View Classical Academy is associated with a non-‐profit Charter Management Organization (CMO) affiliated with the Hillsdale College Barney Charter School Initiative. Doral Academy is affiliated with Doral Academy Inc. Charter School Network, a for profit Educational Management Organization (EMO) which is associated with the Academica Corporation, a for profit management company. The approval of these two schools represents a departure from past approvals where all but one of the charter schools ( New America School-‐Lakewood is associated with a Colorado-‐based CMO) approved by Jeffco were the result of local initiatives. Attachment A provides additional background pertaining to the Doral Academy application. Issue Number Three – Nonresident Students in Jeffco Charter Schools Colorado statues allow for students to enroll in other school districts based on a number of factors. For the 2014-‐2015 school year, Jeffco had a total of 6,795 students from other districts enrolled in Jeffco Schools with 3,228 Jeffco students enrolled in other districts. Based on information contained in reports of the Jeffco Department of Instructional Data Reporting, it is estimated that 1,903 or 28 percent of the students enrolled in Jeffco charter schools are not residents of the Jefferson County School District. The Colorado School Finance Act provided $8,470 in per student revenue (PPR) to Jeffco in 2014-‐2015. Of this amount $4,078, or 48 percent was provided by Jeffco taxpayers; $1,395 of the Jeffco taxpayer amount was authorized by mill levy elections. This indicates that Jeffco taxpayers are providing an estimated total of $7,539,723 to the charter schools for students who are not residents of the Jefferson County School District. The total mill levy override portion for these nonresident students is estimated to be $2,975,355. Issue Number Four – Student mobility There have been numerous studies pertaining to the issue of student mobility, all of which indicate that movement from school to school or between districts can be an impediment to effective school performance. Based on CDE information, the overall mobility rate for Jeffco students, excluding charter schools was 10.8 percent for the 2013-‐2014 fiscal year. The mobility rate for the charter schools was 15.4 percent for this same period. CDE provides information for seven categories relating to instructional programs. The greatest variances between district managed schools and charter schools involved the English Language Learners and Economically Disadvantaged Student categories.
Instructional Programs English Language Learners Economically Disadvantaged
Charter Schools District Managed Schools Enrollment Mobility Enrollment Mobility Percentage Rate Percentage Rate 5.9% 37.6% 8.3% 16.2% 18.1% 21.0% 36.4% 12.9%
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When these categories are evaluated on an individual school basis, there is a small number of ELL students in the charter schools when The New America School-‐Lakewood is excluded from the analysis, however, Addenbrooke Classical, Jefferson Academy K-‐12, Mountain Phoenix Community School, and Woodrow Wilson Academy all have mobility rates of 30 per cent or higher for students in this category. Regarding the Economically Disadvantaged category, the district managed schools have a much higher percentage of students in this group of students, but the charter schools with a lower percentage of students in this category, have a higher mobility rate for these students. Two schools, Compass Montessori – Wheat Ridge (3.0%), and Rocky Mountain Academy of Evergreen (4.3%) have very low percentages of students in this category. CDE information by Ethnic Group includes seven different ethnic categories, however, the majority of the students in Jeffco are White or Hispanic/Latino. Information for these categories is as follows
Ethnicity White Students Hispanic/Latino Students
Charter Schools District Managed Schools Enrollment Mobility Enrollment Mobility Percentage Rate Percentage Rate 74.6% 13.3% 65.6% 10.0% 16.6% 26.6% 25.8% 12.2%
A factor related to student mobility involves the process to identify the number of students for each school and the district through use of the October first count of students. This student count is the basis for allocating resources to Charter Schools. These resources are not adjusted if there are subsequent changes in the school enrollment. Charter schools with a high level of mobility will gain financially from the loss of students and in many cases, the district managed schools will be required to accept these students back in their home schools with no, or limited additional resources. Issue Number Five – Charter School Capital Improvements and Debt Service Issues By providing charter schools resources from the general obligation bond construction programs for the 2004 and 2012 bond elections approved by the voters of Jefferson County, the debt service obligation associated with charter school projects included in these programs is estimated to cost the Jefferson County taxpayers in excess of $1.5 million per year in principal and interest payments made from the Debt Service Fund, a fund where all resources, with the exception of interest earnings, is funded by property taxes. These estimates are based on original budget materials and may be higher or lower depending on bond refunding activities and the actual costs incurred by the district for these projects. Issue Number Six – Perceptions of Financial Transparency and Charter School Audits CDE has established standards for charter schools which “require each Charter School to conduct an annual financial audit by an independent auditor to be selected by the Charter School.” This standard seems to imply the performance of an audit will guarantee financial transparency for charter schools. This is not always the case as in some situations the financial disclosure is not adequate and in other 8
cases disclosures included in the notes to the financial statements can be confusing and may often be overlooked by the readers of these documents. The role of an independent auditor is to express an opinion on the basic financial statements and to obtain reasonable assurance they are free from any material misstatements. A “clean” audit opinion will indicate that the financial statements present fairly, in all material aspects, the financial position of the entity being audited. All of the audits for charter schools in Jefferson County are conducted by a single independent audit firm, John Cutler & Associates. Each of the audited Basic Financial Statements for Jeffco charter schools contain “Notes to the Financial Statements.” These notes are designed to disclose information that will enhance the overall disclosure of financial information for the report reader. In some cases the notes do not effectively disclose required information and in others the information is provided, but it is possible that the reader of the audited Basic Financial Statements may overlook or fail to understand the information provided. Situations where financial disclosure was incomplete involved two somewhat similar instances where 2004 bond resources were transferred from one charter school to another resulting in a financial arrangement with long-‐term receivables and payables not being recorded on the financial statements of the schools. These transactions occurred with the two Compass Montessori Charter Schools and an agreement between Excel Academy and the Rocky Mountain Academy of Evergreen. In both situations, an effort was made to describe the transactions in the Notes, but the information provided fails to effectively disclose a number of key components of the agreements. In three cases, (Addenbrooke Classical Academy, Montessori Peaks Charter School, and Mountain Phoenix Community School) notes under legal compliance indicated “the actual expenditures of the General Fund exceeded the budget amount of $-‐-‐-‐-‐-‐-‐. This may be a violation of State statute.” Two charter schools (Addenbrooke Classical Academy and Collegiate Academy) were noted as having a fund balance deficit in the General Fund. A key component of the audited Basic Financial Reports includes the unaudited Management Discussion and Analysis (MD&A). This analysis is a statement from the charter school management designed to provide an introduction and overview that users need to interpret the Basic Financial Statements. The MD&A provided by many of the charter schools failed to effectively meet this requirement. In one case (Collegiate Academy) the MD&A information is not consistent with the information contained in the Notes to the financial statements. There were a number of other instances where the MD&A failed to reference significant financial issues identified in the audited Basic Financial Statements. Issue Number Seven –Charter School Student Performance There are two elements associated with student performance that tend to be overlooked; they are the issue of parent involvement and the identification of the starting point (test scores prior to 9
attending a charter school) for students who have enrolled in charter schools from district managed schools. Numerous reports indicate that parental involvement is an important element for the improvement of schools. A key factor involving the majority of charter schools in Jeffco is the requirement for parental involvement, usually in the form of a parental contract requiring a specific number of volunteer hours or if the parent(s) cannot fulfill the volunteer obligation, payment in lieu of the required volunteer hours, typically at least $400 per year. The dilemma faced by district managed schools is they can encourage parental involvement, but cannot require it, nor can they require parents to provide payment to the school in lieu of providing volunteer services. School test results are based on the students enrolled in the schools at the time of the tests. There is no reference to the level of achievement of students prior to enrollment in a charter school. For example, students enrolled in a charter school could have had proficient or better scores in district managed schools and when enrolled in a charter school there is the probability the students will continue to achieve at this or a higher level. Meanwhile, the district managed schools where these students previously attended may have reduced test scores because of the loss of higher performing students. Issue Number Eight Issues Not Addressed and Further Questions Beyond the specific issues identified in this review, there are additional issues which have not been explored in-‐depth. They include: •
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Cash Management – The Jeffco District remits 25 percent of the Per Pupil Revenue (PPR) to the charter schools on a quarterly basis with the first payment commencing on July first of the fiscal year and the final payment occurring on April first. Jeffco receives the state PPR payments on a monthly basis and 60 percent of the property taxes are received in May/June, the final two months of the fiscal year. The June amount includes approximately $9 million of property tax revenues received in July and recorded as a receivable on the June 30th Comprehensive Annual Financial Reports. The charter schools receive their portion of the PPR well in advance of the receipt of these revenues by Jeffco, resulting in an unknown amount of lost interest income and a possible cash flow problem for the district. Charter School Budget Formats – All of the public budget materials provided by the charter schools are in a basic line item format. There is no identification of the costs for various programs such as school administration, special education, preschool, gifted and talented, etc. This approach does not present a comprehensive picture of the services and activities provided by each charter school. Impact of Preschool and Full Day Kindergarten Fees – The fees charged by charter schools for the preschool and full day kindergarten programs are established by each school. In some cases, these fees exceed the fees established for similar district managed programs. Because preschool and full day kindergarten revenues and expenditures are comingled with the overall charter school General Fund programs, it is unknown if these programs are being used to
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enhance the overall financial position of the school or have been established to offset the cost of the programs. Accounting for Resources Generated by Charter School Foundations – Most charter schools have a separate foundation responsible for major fund raising activities. It is unknown if the resources generated by these organizations are provided to the charter schools as donations, thus, being reported as revenues on the financial records of the school, or if the foundations purchase goods or services directly. If the resources are managed directly by the foundations, the overall revenues and expenditures reported by the charter schools will be understated. Costs incurred by Jeffco Associated with Charter Schools -‐ To fully understand the charter school-‐related costs to the District will require an in-‐depth review of all of the costs, to include some items identified in this review as well as determining all of the direct and indirect costs incurred by Jeffco associated with the charter schools authorized by the Board of Education. Lack of a Board Policy regarding the Charter Application Review Committee (CARC) -‐ The activities of this committee have not been part of this review, but the fact that the committee exists and is fulfilling an active role, would seem to indicate a need for a Board policy to provide guidance for their review process. Questions pertaining to the Jeffco Charter Schools – The information contained in the various issues in this review identify the issues, but leaves at least six questions that could provide some insight to the issues involving charter schools. These questions include the following: o The District has established a separate Charter School Office with two staff members. These positions appear to be included in the budget for the Chief Academic Office. What is the total budget for the Charter School Office? o What are the numbers of nonresident students in each charter school and what are the home districts for these students? o Why was the number of nonresident charter school students removed as a separate category on the 2014-‐2015 Choice Enrollment Rates Report? o How many students, if any, now enrolled in charter schools were previously enrolled in private schools? If this has occurred, where are these students currently enrolled? o How many students from each charter school leave the school after the October 1 count has been completed? o What happens to students who leave charter schools? Do they return to their neighborhood school in Jeffco? If so, what schools did they leave and what schools received these students?
There are also a number of areas within CDE whereby charter schools obtain a great deal of support from the Colorado Department of Education. These items are summarized as part of Issue Number Eight. Attachment A – Materials Pertaining to Doral Inc. and Academica The most recently approved Charter School in Jeffco, Doral Academy of Colorado (DAC), is the first to be affiliated with a for profit Education Management Organization (EMO). The DAC application 11
identifies the intent “to retain a Management Services Provider (MSP), Academica, to work together as a team to develop financial policies and practices that will help secure the DAC’s financial future.” Specific items identified in the application include the following: • • •
“Under the supervision of the Board, Academica will be responsible for the DAC’s bookkeeping and financial reporting.” Academica will also be assigned by the Board to bid out third-‐party services that the school requires including an independent audit firm.” “The principal of DAC will be responsible for overseeing portions of the budget that are within his/her control such as expenses related to office supplies, travel, copier, etc. The principal will review her budget with Academica on a bi-‐monthly basis.”
A number of issues have surfaced in the State of Florida pertaining to Doral Academy Inc. and the related management company, Academica Corporation. This attachment includes materials from formal investigations of Academica by the Miami-‐Dade public Schools Office of Management and Compliance Audits (OMCA) as well as related newspaper articles and materials prepared by the League of Women Voters. These materials span a period from November 2006 through July 2015 and provide some insight to the types of issues that can arise when dealing with EMO organizations.
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ISSUE NUMBER ONE DIFFERING CHARTER SCHOOL CIRCUMSTANCES Most discussions about charter schools provide data pertaining to all charter schools without considering the setting for the various schools. Charter schools in a suburban setting , such as in Jeffco, will be different from other settings such as in Denver Public Schools(DPS). Denver Post Editorial of June 17, 2014 The Denver Post editorial of June 17, 2014 entitled “DPS could teach Jeffco a lesson on Charter Schools” is an example of how comparisons relating to differing circumstances can lead to what appears to be a logical conclusion, but fails to take certain demographic/environmental issues into consideration. At the time of the Denver Post editorial, it is noted that DPS had 50 charter schools with an additional 12 pending and Jeffco had only 16. The editorial goes on to state: “DPS has found success establishing high-‐performing charters as an option for struggling populations. Meanwhile, Jeffco’s board is being criticized for its budget -‐ if approved on Thursday -‐ would pledge $3.7 million for charters from the districts approved mill levy override.” “Instead of fighting about charters or their funding, Jeffco should look at Denver and how the district places charters with targeted programs in areas with low-‐performing charter schools.” “Several Jeffco schools are located near Denver’s border, serving the same populations. But on one side of the border, Denver students are given a choice of high-‐performing charter schools and targeted programs. On the other, Jeffco students are left with failing neighborhood schools.” The reference to DPS providing options for students in low performing schools appears to be accurate. The comment relating to the lack of charter schools in Jeffco providing services to student populations similar to DPS also appears to be accurate. The charter schools in Jeffco have not been established in areas with “failing neighborhood schools.” All of the Jeffco charter schools are based on applications brought to the Board of Education by third parties and this has resulted in a charter school model in Jeffco and in many other suburban communities where charter schools, tend to focus on rigorous educational programs designed to attract successful students. The focus thus far in Jeffco has not been directed at struggling student populations. An aspect that seems to have been overlooked in the Post editorial and in numerous studies pertaining to charter schools is the various unique circumstances for different charter school environments. Charter schools in urban settings are typically very different than charter schools in suburban settings. In urban locations, the charter schools tend to be focused on at-‐risk and minority students, usually from areas where the local schools are deemed to be under performing. In suburban school districts, most of the charter schools tend to focus on rigorous programs, often designed to prepare students for a post-‐secondary education. 13
The Post editorial implies that Jeffco should have more than the 16 charter schools that were operational at the time of the editorial. This seems to imply that the number of charter schools represents a measure of success and that a larger number of charter schools in Jeffco will be beneficial for the district. The issue is not the number of schools, but services being provided by the charter schools. Colorado Department of Education Report: State of Charter Schools in Colorado The Colorado Department of Education (CDE) Schools of Choice Office prepared a study entitled The State of Charter Schools in Colorado based on information from the 2011-‐2012 fiscal year. This report provides aggregated data for all charter schools and does not reference the fact that the charter schools in each district have a unique set of characteristics that form the basis for the types of charter schools available. A section in the report entitled Charter School Variety discusses the variety of charter schools in Colorado as follows: “Most of Colorado’s charter schools exist along the front range cities and suburbs. The Denver Metro Area has 71 charter schools and Colorado Springs has 23 charter schools. The state also has a number of rural charter schools in such places as Avon, Carbondale, Windsor, Gypsum, Lamar, Marble, Georgetown, Cortez, Montrose, Granby, and Paradox.” “While most charter schools are independent entities, a growing number of schools are managed by national Charter Management Organizations (CMO) and Educational Management Organizations (EMO); (see Table 11) and Colorado homegrown CMOs and EMOs (see Table 12).” Tables 11 and 12 identify the organizations and the number of charter schools managed by each CMO or EMO in the state. The report fails to define CMOs and EMOs. The web site charterschooltools.org provides the following regarding these types of organizations: “There are over 90 for-‐profit educational management organizations (EMOs) that operate over 650 charter schools and over 100 not-‐for-‐profit charter school management organizations (CMOs) that operate over 600 schools in the U.S.” This web site goes on to state: “Management companies can provide an established academic program, start-‐up and real estate capital, and back-‐office expertise.” “EMOs typically charge a management fee of from 10-‐20% of revenue.”
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“Many of the larger CMOs are supported by philanthropic funding from major educational reform foundations. CMOs sometimes have charter board representatives on the schools they operate, and some enter into management or service agreements with fees of 3-‐10% of school revenues.” A section of the report entitled Characteristics of Colorado Charter Schools is focused on school size and grade level configuration. The report notes that “over time, the enrollment patterns of charter schools have changed, showing an increase in the size of charter schools.” Regarding grade level configuration, the CDE report states: “Although some school grade configurations have remained basically stable since the late 1990s, such as elementary schools, a few demonstrate notable differences.” There is also a section addressing the Characteristics of Colorado Charter Students. This section looks at the overall percentages of minority students, students eligible for free and reduced lunch (at-‐risk students), students with disabilities, and disciplinary actions. Again, this section looks at data for all charter schools and notes the following: • •
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Racial and Ethnic Minorities – “the percent of racial/minority students enrolled in charter schools has increased over time from 27 % in 2001, and is now virtually identical to the state average.” Student Eligibility for Free or Reduced-‐Price Lunch – “the percentage of charter students who qualify for free or reduced lunch has grown steadily compared to prior years. Despite this increase, however, the total percent of FRL students served by charters has remained approximately 10 points lower than the state’s average each year.” Students with Disabilities – “Although the numbers have remained essentially static over time, the gap between charters and non-‐charters has narrowed some over time.” Disciplinary Incidents -‐ This section identifies eight different disciplinary actions and the report states: “Comparing charters to non-‐charters, the latter saw greater rates in five of eight categories. Charter rates exceeded those of non-‐charters in Class Suspensions and Other Disciplinary Actions.”
The sections of the CDE report relating to charter school variety and characteristics discusses the various management structures and basic numbers regarding the enrollment per school, the grade configurations and information relating to various student categories; all of this information is reported in the aggregate. This section of the report fails to address the issues associated with those charter schools focused on economically disadvantaged (at-‐risk) students and those that either are similar to other public schools or provide services equivalent to private schools. The CDE report identifies nine charter school profiles as examples of the diversity of charter schools in the state. This information is provided in EXHIBIT 1-‐1.
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EXHIBIT 1-‐1 COLORADO DEPARMENT OF EDUCATION THE STATE OF CHARTER SCHOOLS CHARTER SCHOOL PROFILES
Charter School Animas High School (Durango) Colorado Springs Early Colleges Thomas Maclaren (Colorado Springs) Ross Montessori School (Carbondale) University Prep Denver School of Science & Technology GVR (1) Denver School of Science & Technology (1) DSST: Cole (1) Littleton Academy
Authorizer Charter School I nstitute Charter School I nstitute Charter School I nstitute Charter School I nstitute Denver Public Schools Denver Public Schools Denver Public Schools Denver Public Schools Littleton District 6
Minority Percentage Authorizer School 53% 17% 53% 32% 53% 30% 53% 25% 80% 91% 80% 90% 80% 68% 80% 84% 25% 21%
Free & Reduced L unch % Authorizer School 51% 0% 51% 27% 51% 28% 51% 18% 73% 81% 73% 67% 73% 43% 73% 74% 27% 5%
Source: Col ora do D epa rtment o f Educa ti on R eport; The S ta te o f Cha rter S chool s . (1) Thi s D PS p rogra m i s a n etwork tha t i nvol ves four m i ddl e s chool s a nd two h i gh s chool s .
These profiles indicate that the Animas High School and the Littleton Academy and to some extent the Ross Montessori school, are representative of charter schools serving a population with a small number of economically disadvantaged students. The DPS and the majority of the Charter School Institute (CSI) schools represent students that would be defined as at-‐risk based on the free and reduce lunch (FRL) rates. The Charter School Institute is a statewide entity that may authorize charter schools in districts without exclusive chartering authority. With the possible exception of the Ross Montessori School, no truly rural charter schools are included in this listing and the fact that eight of the nine charter schools listed are associated with the Charter School Institute or Denver Public Schools is an indication that this profile is not truly representative of the variety of the charter schools in the State of Colorado At Risk Enrollment for DPS, Jeffco, and Douglas County EXHIBIT 1-‐2 (Denver Public Schools), 1-‐3 (Jefferson County Public Schools) and, 1-‐4 (Douglas County Public Schools) provide a more detailed picture of the differences between the Denver Public School District (DPS), an urban district and two suburban districts, the Jefferson County Public School District (Jeffco) and the Douglas County Public School District (Dougco). EXHIBIT 1-‐2 indicates that over 75 percent of the students enrolled in DPS charter schools qualify for the free and reduced lunch (FRL) program. Only one charter school in DPS has a free and reduced lunch percentage below 20 percent. Conversely, as identified in EXHIBIT 1-‐3 five of the 16 charter schools in Jeffco have free and reduced lunch rates of five percent or less and only three have a FRL of 20 percent or more
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EXHIBIT 1-‐2 AT-‐RISK STUDENTS DENVER PUBLIC SCHOOLS CHARTER SCHOOLS 2011-‐2012 FISCAL YEAR DPS Charter Schools Identified as At-‐Risk (1) Enrollment % Minority Ri dge Vi ew Aca demy 287 66.00% Aca demy Urba n Li vi ng 67 88.00% Ces a r Cha vez 438 91.00% Col ora do H S 167 92.00% Ace Comm Cha l l enge 220 96.00% Denver S ci & Tech G VR 145 90.00% DSST: Col e 140 84.00% Venture Prep 417 92.00% Gi rl s Athl eti c 176 58.00% Jus ti ce H S 110 96.00% KIPP Montebel l o 99 93.00% KIPP Col l egi a te 330 98.00% KIPP S uns hi ne Pea k 373 100.00% Li fe S ki l l s 927 93.00% Ma nny Ma rti nez 119 97.00% Northea s t Aca demy 385 97.00% Oma r B l a i r 783 85.00% Pi oneer Cha rter 393 98.00% SOAR 306 86.00% Wes t D enver Prep 332 99.00% SOAR a t Oa kl a nd 232 94.00% Southwes t Ea rl y 295 91.00% Uni vers i ty Prep 113 91.00% Wes t D enver Prep H i ghl a nd 222 96.00% Wes t D enver Prep H a rvey Pa rk 319 95.00% Wes t D enver Prep La ke 240 95.00% Wya tt-‐Edi s on 652 97.00% Tota l At-‐Ri s k S chool s ( 1) 8,287 Identified as Not At-‐Risk (2) Denver La ngua ge 356 44.00% Denver S ci & Tech 285 68.00% Hi ghl i ne Aca demy 498 49.00% Odys s ey Cha rter 225 44.00% Tota l Not At-‐Ri s k S chool s 1,364 Tota l Cha rter Enrol l ment 9,651 % of Charter Students Identified as At-‐Risk
% F ree & Reduced 100.00% 87.00% 83.00% 66.00% 94.00% 67.00% 74.00% 88.00% 51.00% 93.00% 95.00% 94.00% 98.00% 81.00% 100.00% 88.00% 57.00% 92.00% 67.00% 93.00% 90.00% 79.00% 81.00% 92.00% 90.00% 94.00% 75.00%
At-‐Risk Students 287 58 364 110 207 97 104 367 90 102 94 310 366 751 119 339 446 362 205 309 209 233 92 204 287 226 489 6,825
18.00% 43.00% 32.00% 35.00%
64 123 159 79 425 7,250 75.12%
Source: The State of Charter Schools: Colorado Department of Education April 2 013. (1) Charter Schools with over 5 0% s tudents qualified for free or reduced l unch. (2) Charter Schools with l ess t han 5 0% of s tudents qualified for free or reduced l unch.
EXHIBIT 1-‐3 identifies only one school in Jeffco (New America-‐Lakewood) with an enrollment of FRL students in excess of 50 percent. When the Rocky Mountain Deaf School (46 percent FLR) is excluded, all of the remaining Jeffco charter schools have a FRL percentage of 20 percent or less. 17
EXHIBIT 1-‐3 AT-‐RISK CHARTER SCHOOL STUDENTS JEFFERSON COUNTY CHARTER SCHOOLS 2011-‐2012 FISCAL YEAR Jeffco Charter Schools Identified as At-‐Risk (1) New America School -‐ Lakewood Identified as N ot At-‐Risk (2) Compass Montessori W R Compass Montessori Golden Excel Academy Free Horizon Montessori Jefferson Academy (3) Jefferson Academy Jr (3) Jefferson Academy Sr (3) Lincoln Charter Academy Rocky Mountain Deaf School Montessori Peaks Mountain Phoenix Community School Rocky Mountain Academy of Evergreen Collegiate Academy Two Roads Academy Woodrow W ilson Total Not At-‐Risk Charter Students Total Charter Enrollment % of Charter School Students Identified as At-‐Risk
Enrollment 295
% Minority 93.00%
283 365 510 425 928 0 0 548 54 516 364 420 487 650 656 6,206 6,501
22.00% 20.00% 19.00% 18.00% 18.00% 30.00% 25.00% 30.00% 44.00% 16.00% 20.00% 12.00% 22.00% 17.00% 20.00%
% Free & At-‐Risk Reduced Students 77.00% 227 0.00% 0.00% 18.00% 13.00% 13.00% 20.00% 14.00% 19.00% 46.00% 10.00% 11.00% 1.00% 2.00% 11.00% 5.00%
0 0 92 55 121 0 0 104 25 52 40 4 10 72 33 607 834 12.82%
Source: The State of Charter Schools: Colorado Department of Education, April 2 013. (1) Charter Schools with over 5 0% s tudents qualified for free or reduced l unch. (2) Charter Schools with l ess t han 5 0% of s tudents qualified for free or reduced l unch. (3) The e nrollment for a ll t hree J efferson Academy Schools a re i ncluded with J efferson Academy
Jeffco as a district has an overall average of 33 percent of students qualified for the free and reduced lunch program. The average at Jeffco charter schools for this program is 12.82 percent. This compares with 75.12 percent of FRL students in DPS charter schools. The only charter school in Jeffco established to serve at-‐risk students is the New America School-‐ Lakewood (one of three New America CMOs located in Colorado), which has the following mission statement: “Empower new immigrants, English Language learners, and academically underserved students with the educational tools and support their need to maximize their potential, succeed and live the American dream.” The Rocky Mountain Deaf School has a unique program with 46 percent of the students qualifying for the free and reduced lunch program. The mission statement for this school is as follows:
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“The mission of the Rocky Mountain Deaf School is to provide Deaf and Hard-‐of-‐Hearing children, preschool through 12th grade a publically-‐funded bilingual education which promotes academic excellence, full proficiency in ASL and English literacy, and which supports the home-‐school connection by offering a language rich environment that includes the RMDS personnel, the RMDS Board, parents and the Deaf School Community.” Mission statements from some other Jeffco charter schools having a FRL percentage of less than 50 percent are as follows: •
•
•
•
•
Compass Montessori: (Two schools with FRL rate of zero %) “Utilizing authentic Montessori methods, The Compass community aims to nurture the whole child and enrich the lives of each student from Preschool to 12th grade.” Collegiate Academy: (FRL rate of 2%) “To help students prepare for and succeed in college and their career by providing a Core Knowledge foundation that establishes the key values of lifelong learning allowing them to recognize and to develop their unique and innovative ideas.” Rocky Mountain Academy of Evergreen (FRL rate of 4%) “Rocky Mountain Academy of Evergreen inspires each student to pursue personal academic excellence through an intellectually challenging Knowledge curriculum within a nurturing environment.” Mountain Phoenix Community School: (FRL rate of 11%) “To graduate students who have a vested interest in their role in the world and are mature, conscious, thoughtful, and personally responsible in their interactions with others and self, and who are able to transition into and excel in higher-‐level learning environments with a sense of individually as achieved through an innovative Waldorf education model; and to build a strong supportive engaged community of families and educators.” Jefferson Academy: (Three separate schools with RFL rates of 13%, 20%, and 14%) “The mission of Jefferson Academy is to help students attain their highest academic and character potential through an academically rigorous, content-‐rich educational program.”
EXHIBIT 1-‐4 provides a review of the FRL students included in the charter schools of Dougco. The results in Dougco are similar to those of Jeffco with the exception that all but one of the charter schools has a percentage of FRL students that is five percent or less.
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EXHIBIT 1-‐4 AT-‐RISK CHARER SCHOOL STUDENTS DOUGLAS COUNTY CHARTER SCHOOLS 2011-‐2012 FISCAL YEAR Dougco Charter Schools % Free & Identified as At-‐Risk (1) Enrollment % Minority Reduced Hope On Line ( 3) 2,949 79.00% 63.00% Identified as Not At-‐Risk (2) Academy Charter 729 17.00% 5.00% Ben Franklin 647 18.00% 1.00% American Academy Castle Pines 892 17.00% 2.00% Challenge to Excellence 514 22.00% 5.00% North Star 595 22.00% 0.00% Core Knowledge 552 13.00% 4.00% STEM Middle and HS 477 21.00% 4.00% DCS Montessori 485 17.00% 3.00% Skyview Academy 652 27.00% 3.00% Platte River 514 22.00% 1.00% Total Not At-‐Risk Charter Schools 6,057 Total Charter Enrollment 9,006 % of Charter School Students Identified as At-‐Risk
At-‐Risk Students 1,858 36 6 18 26 0 22 19 15 20 5 167 2,025 22.48%
Source: The State of Charter Schools: Colorado Department of Education April 2 013. (1) Charter Schools with over 5 0% s tudents qualified for free or reduced l unch. (2) Charter Schools with l ess than 5 0% of s tudents qualified for free or reduced l unch.
(3) Thi s i s a n u nus ua l Cha rter S chool tha t h a s o nl i ne l ea rni ng centers i n o ver 40 l oca ti ons i n Col ora do. I t a ppea rs tha t o nl y o ne l ea rni ng center i s l oca ted i n D ougl a s County, thus , i t s kews the d a ta i n thi s Exhi bi t a s m a ny o f thes e s tudents m a y n ot b e D ougl a s County res i dents .
The inclusion of the Hope On-‐Line charter school in EXHIBIT 1-‐4 represents an unusual situation that skews the overall data for Dougco. The Hope On-‐Line charter school authorized by the Douglas County Board of Education serves students throughout the state at 40 different learning centers; the headquarters for this charter school appears to be located in Arapahoe County and only one learning center is located in Douglas County. Multiple learning centers in the Denver metro area are located in Aurora, Denver, Commerce City, and Brighton. The inclusion of data for the Hope On-‐Line Charter School with the data for the other Dougco charter schools distorts these data for this district as all of the other charter schools are located in Douglas County and have a FRL percentage of five percent or less. Materials pertaining to minority and at-‐risk students for DPS, Jeffco, and Dougco are summarized in EXHIBT 1-‐5. Based on information contained in EXHIBITS 1-‐2 through 1-‐4, it is clear that the students being served by DPS charter schools represent a large number of minority and at-‐risk students while the charter schools in Jeffco and Dougco, serve a different student population.
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EXHIBIT 1-‐5 SUMMARY OF AT-‐RISK STUDENTS DPS, JEFFCO, AND DOUGCO 2011-‐2012 FISCAL YEAR
Charter Enrollment Students Identified as At-‐Risk % of At-‐Risk Students Total Charter Schools Charter Schools with Free & Reduced Lunch i n Excess of 50% % of Charter Schools with Free & Reduced Lunch in Excess of 50% % of Charter Schools with Less Than 50% Free & Reduced Lunch
DPS 9,651 7,250 75.12% 31 28 90.32% 12.90%
Jeffco Dougco(1) 6,501 9,006 834 2,025 12.83% 22.49% 16 11 1 1 6.25% 9.09% 93.75% 90.91%
Source: The S ta te o f Cha rter S chool s : Col ora do D epa rtment o f Educa ti on Apri l 2013. (1) Of the 2,025 S tudents i denti fi ed a s At-‐Ri s k for D ougco, 1,858 a re e nrol l ed i n the H ope On-‐Li ne Cha rter School w i th l ea rni ng centers i n 40 l oca ti ons throughout Col ora do.
A review of charter schools in other Denver area suburban districts such as Littleton and Cherry Creek, will provide results similar to those identified in EXHIBITS 1-‐3 and 1-‐4. A review of charter schools in the Colorado Springs and Pueblo urban settings will also provide results similar to those found in the Denver area. The Denver Post editorial references the need for Jeffco to establish charter schools for students in areas that are attending under performing schools, however, the two most recent charter schools approved by the Jeffco Board of Education have included a not for profit CMO and a for profit EMO. Neither of these charter schools addresses the issue of low performing schools and students as referenced in the Denver Post editorial. New Golden View Classical Academy The newest active charter school in Jeffco, the Golden View Classical Academy has the following vision and mission statements: Vision “Golden View Classical Academy was established to develop within its students the intellectual and personal habits and skills upon which responsible, independent and productive lives are built, in the firm belief that such lives are the basis for a free and just society.” Mission: “This is achieved by always working to rain the minds and imrove the hearts of young people through a classical, content-‐rich education in the liberal arts and sciences, with instruction in the principles of moral character and civic virtue in an orderly and disciplined environment.”
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This school is located in the Golden articulation area where the majority of the students seem to perform at a level of proficient or above on the Transitional Colorado Assessment Program (TCAP). The Golden View Classical School is the second charter school in Jeffco to be associated with a national Charter Management Organization (New America-‐Lakewood was the first). Additional information pertaining to this school is included with Materials included with Issue Number Two – Types of Charter Schools. Recently Approved Charter School – Doral Academy This application is associated with an EMO with charter schools in Florida and Nevada. The Mission Statement is: “The mission of Doral Academy of Colorado is to maximize student potential using an arts-‐ integrated curriculum to educate the whole child; DAC will actively engage families and the community in this pursuit.” This school is seeking a location in the north east portion of Jeffco which will focus on an arts education which is somewhat specialized. This is the first charter school in Jeffco to be associated with a national for-‐profit Education Management Organization. Issues related to this application are discussed in more detail in Issue Number Two – Types of Charter Schools and in Attachment A. Neither the newest charter school nor the current charter school application from Doral Academy appear to be directed at supporting at-‐risk Jeffco students. 22
ISSUE NUMBER TWO TYPES OF CHARTER SCHOOLS As of August 2015, the Jeffco Board of Education had authorized 16 charter schools. The backgrounds and nature of these schools vary; one (the New America School-‐Lakewood) is an English Language Learners program associated with a Colorado Charter Management Organization (CMO), one (Rocky Mountain Deaf School) involves Deaf Education, one (Two Roads Charter School) has a home school/traditional program, six are core knowledge schools, and seven are based on three types of programs originally established by private schools. The newest charter school, Golden View Classical Academy and the most recently approved charter school, Doral Academy are both associated with national entities, one is a non-‐profit Charter Management Organization (CMO) and the second is a for-‐ profit Education Management Organization (EMO). Charter Schools Based on Private School Progams Montessori Schools (Four Jeffco Charter Schools) A Montessori school is a school that follows the teachings of Dr. Maria Montessori. Materials available at the http://privateschool.about.com web site indicate that Dr. Montessori established a method of teaching that has inspired educators throughout the world. She never copyrighted or trademarked the Montessori name, nor legally protected her approach. The fact that thousands of schools operate with Montessori in the school name does not guarantee that the school follows the methods of Dr. Montessori. This web site goes on to identify the following as things to look for when considering a Montessori school: • • • • •
Membership in the American Montessori Society (AMS); Teaching Style – Teachers facilitate, guide, and direct their students; they do not lecture groups of students; A class will include Several Ages – The concept is for older students to help teach the younger students; Work is not graded – The concept is that the child will learn by doing; and Teachers will be trained and certified in Montessori Methods and Techniques.
Montessori schools theoretically cover infant education through matriculation from high school. In practice most Montessori schools offer infant education through 8th grade with 90 percent of Montessori schools having very young children ages 3 to 6. As identified in the CDE study, The State of Charter Schools, there were a total of seven Montessori charter schools in Colorado at the end of the 2011-‐2012 fiscal year; Jeffco had four of these Montessori Schools and that number remained in August 2015 as follows: •
Compass Montessori School – Golden 23
• • •
Compass Montessori School – Wheat Ridge Free Horizon Montessori School -‐ Golden Montessori Peaks Academy -‐ South Jeffco
The American Montessori Society (AMS) is a national non-‐profit organization with over 13,000 members worldwide with a stated mission to: “Make Montessori a significant and enduring voice in education. We serve our members, advocate for quality Montessori education and champion Montessori principles.” This organization provides numerous programs to include a graduated level of membership and an official recognition program. The membership program consists of: •
•
•
Full Level – All classroom lead teachers must hold Montessori credentials in the level(s) they are teaching. The credentials must be issued by a teacher education program affiliated with AMS, Association Montessori Internationale (AMI), the National Center for Montessori Education (NCME), or other programs that are accredited by the Montessori Accreditation Council for Teacher Education (MACTE). After one year, as a full member, a school is eligible for AMS accreditation, a widely accepted validation of quality Montessori education. Only full member schools may be accredited by AMS. Associate Level Membership – The lead teacher in some, but not all, of the school’s classrooms must hold credentials from a teacher education program affiliated with AMS, AMI, NCME, or accredited by MACTE Initiate Level Membership – Schools that are just forming or are new to the American Montessori Society may join at this level. Initiate membership is limited to 3 years; during this period the school is expected to work toward a full or associate membership.
There are 114 Montessori schools in Colorado, of this number, 45 are members of AMS. A total of 34 of these member schools provide only early childhood programs, thus 11 of the AMS schools in Colorado also provide services for grades beyond kindergarten. Of the four Montessori Charter Schools authorized by the Jefferson County Board of Education, only the Free Horizon Montessori School is a member of AMS; this school is identified as an associate member. EXHIBIT 2-‐1 summarizes the Colorado members of AMS and the Montessori charter schools approved by the Jeffco Board of Education as well as the other Montessori Charter Schools in Colorado pidentified in theThe State of Charter Schools in Colorado report prepared by CDE. This exhibit also identifies the tuition fees for the private Montessori schools. Two of the private accredited Montessori schools in Colorado are the two Evergreen Montessori schools located in Jefferson County. The Evergreen Montessori School charges tuition/activity fees of $11,950 for lower elementary students (ages 6-‐9), $12,350 for upper elementary students (ages 9-‐11), and $14,850 for middle school students. This school also assesses a $1,000 non-‐refundable enrollment deposit. Tuition rates for the Montessori School of Denver are slightly higher. 24
EXHIBIT 2-‐1 MONTESSORI SCHOOLS COLORADO CHARTER SCHOOLS AND MEMBERS OF AMERICAN MONTESSORI SOCIETY 2014-‐2015 FISCAL YEAR Montessori School Colorado AMS Montessori Schools Jarrow Montessori School Montessori School of Denver Montessori School of Evergreen Montessori School of Evergreen Montessori Children's House Adventure Montessori Learning Center Jeffco Montessori Charter Schools
AMS Charter Schools Private Schools Membership Grades District Grades Location Tuition (1) Accredited Accredited Accredited Accredited Associate Associate
PK-‐8 PK-‐8 PK-‐8 K-‐6 PK-‐6 PK-‐8
Boulder Denver Evergreen Evergreen Denver Lafayette
$ 15,400 $ 16,095 $ 11,950 $ 12,350 $ 15,200 N/A
Fees $ 1,500 $ 75 $ 1,000 $ 1,000 $ 760 N/A
Free Horizon Montessori School Associate PK-‐8 Jeffco Compass Montessori School-‐Golden Not a Member PK-‐12 Jeffco Compass Montessori School -‐ W heat Ridge Not a Member PK-‐6 Jeffco Montessori Peaks Not a Member PK-‐6 Jeffco Other Colo. AMS Member Charter Schools Ross Montessori School (2) Initiate K-‐8 CS I nst St. Vrain Community Montessori Initiate PK-‐8 St. Vrain Gilpin Montessori School Initiate PK-‐9 DPS Monarch Montessori School Initiate PK-‐5 DPS Source: Ameri ca n Montes s ori S oci ety S chool Members hi p, CDE R eport The State of Charter Schools in Colorado , a nd
Charter School web s ites. (1) Tui ti on l i s ted i s the l owes t a va i l a bl e, typi ca l l y for e a rl y e l ementa ry s chool . (2) The R os s Montes s ori S chool i s a uthori zed b y the Col ora do Cha rter S chool s I ns ti tute. Thi s i s the o nl y n on-‐di s tri ct cha rter s chool a uthori zer i n Col ora do.
Waldorf Schools (Mountan Phoenix Community School) A publication entitled “Why Waldorf Works,” published by the Association of Waldorf Schools of North America (AWSNA) provides a series of materials describing the Waldorf approach to education. These materials note that a “Waldorf Education is based on concepts of spiritual-‐scientific research of the Austrian scientist and thinker Rudolf Steiner (1861-‐1925).” According to Steiner’s philosophy ,”the human being is a threefold being of spirit, soul, and body whose capacities unfold in three developmental stages on the path to adulthood; early childhood, middle childhood, and adolescence.” “For the Waldorf student, music, dance, and theater, writing, literature, legends and myths are not simply subjects to be read about, ingested and tested – they are experienced. Through these experiences, Waldorf students cultivate a lifelong love of learning as well as the intellectual emotional, physical and spiritual capacities to be individuals certain of their paths and to be of service to the world.” 25
“AWSNA was founded in1968 to assist schools and institutes in working together to strengthen and nurture Waldorf Education and to advance Waldorf principles.” This is an organization that supports private “Waldorf Schools.” AWSNA currently has over 150 member schools and has established a membership program with the following membership levels: •
• •
Full Membership – A school has matured to stand in the world as an example of Waldorf Education. o Accredited Schools – A full membership school can participate in the AWSNA accreditation process and can be accredited by the National Council of Private Schools Association. Candidacy Membership – Schools that are very close to maturity and pursuing Full Membership status. Developing School Membership – For youthful schools with early childhood and grade school programs which have completed a three year plan to guide the school in its development.
With the development of a number of charter schools identified as schools “inspired by Waldorf Education,” a second organization entitled the Alliance for Public Waldorf Education (the Alliance) was established to support charter schools identified as using the Waldorf School approach. This organization currently has 42 member schools with four in Colorado, to include the Mountain Phoenix Community School in Jeffco. The Alliance membership levels are as follows: • • • •
Initiative School – Schools still in the chartering process and those that have operated for one or two years. Developing School – Schools that have successfully operated for a minimum of two consecutive years as public Waldorf schools. Sustaining Schools – Schools that have operated for a minimum of five continuous years as public Waldorf schools. Leading School – Schools that have operated for a minimum of ten continuous years as public Waldorf schools and participate in Alliance projects.
These membership levels seem to be the foundation of the fee structure for The Alliance; the application process for The Alliance uses a one page form and there is currently no accreditation process associated with this organization. Unlike the Montessori schools, AWSNA has registered the service marks, “Waldorf”, “Waldorf Inspired”, ”Steiner”, and “Rudolf Steiner.” Only schools, institutions or organizations which have received permission from AWSNA may represent themselves as Waldorf schools using the trademarked terms. There had been an ongoing conflict between AWSNA and The Alliance regarding the use of these terms. An agreement between these two organizations was reached in April 2015 which establishes the following:
26
•
• •
A formal license agreement between AWSNA and the Alliance which empowers the Alliance to use the mark “Public Waldorf™” with acknowledgment in all printed and electronic medium that “Public Waldorf™” is a service mark owned by AWSNA and is used pursuant to license. Both organizations agree to work towards sub-‐licensing once an Alliance path to membership is in place and sustainable organizationally. AWSNA and the Alliance agree to consider including employees of respective schools on accreditation teams when there are shared accrediting bodies.
EXHIBIT 2-‐2 provides a summary of the Waldorf schools active in Colorado during the 2014-‐2015 fiscal year, for members represented by both AWSNA and The Alliance.
EXHIBIT 2-‐2 WALDORF SCHOOLS COLORADO AWSNA AND ALLIANCE MEMBERS 2014-‐2015 FISCAL YEAR
School Colorado AWSHA Members Shining Mountain Denver W aldorf School Waldorf School of Roaring Fork Shepard Valley W aldorf School Front Range W aldorf School (1) Colorado Alliance Members Mountain Phoenix Community School Juniper Ridge Community School Mountain Song Community School Mountain Saga Community School
Membership Standing Grades Accredited Accredited Accredited Developing N/A N/A N/A N/A N/A
Location
K-‐12 PK-‐12 K-‐8 PK-‐8 PK-‐6
Boulder Denver Carbondale Niwot Lakewood
PK-‐8 K-‐8 K-‐7 K-‐8
Wheat Ridge Grand Junction Colorado Springs Fort Collins
Elementary
Tuition Middle
Senior
Fees
$ 15,175 $ 12,800 $ 11,300 $ 14,280 N/A
$ 15,750 $ 13,100 $ 11,300 $ 14,560 N/A
$ 17,955 $ 14,500 -‐ -‐ N/A
$ 400 $ 600 $ 225 $ 400 N/A
-‐ -‐ -‐ -‐
-‐ -‐ -‐ -‐
-‐ -‐ -‐ -‐
Source: S chool , AWSHA, a nd Al l i a nce w eb s i tes . (1) There i s very l i ttl e i nforma ti on p erta i ni ng to the F ront R a nge Wa l dorf S chool . Thi s s chool h a s a s tudent p opul a ti on tha t
is 8 1% Asian a nd of the enrollment of 6 3 s tudents, 3 0 a re enrolled i n the preschool. Although the s chool i s i dentified a s a s AWSNA m ember o n the Loca l S chool D i rectory.com w eb s i te, the s chool i s n ot i denti fi ed a s a m ember o n a ny AWSNA ma teri a l s .
The Mountain Phoenix materials describe the school as “A Jeffco Charter School Guided by the Core Principles of Public Waldorf Education.” Other information includes the following statement; “Curriculum and school culture inspired by Waldorf Education.” In describing the history of the school, the goal was to open “an arts-‐based public charter school, which would be inspired by the methods of Waldorf Education.” There is no reference regarding the trademarked terms related to Waldorf Education included in the April 2015 agreement between AWSNA and The Alliance. 27
-‐ -‐ -‐ -‐
Classical Schools (Addenbrooke and Golden View Classical Academies) Classical schools are based on the concept of Trivium education. “The Trivium is comprised of the first three of the liberating arts which have to do with Letter, Qualities, and Mind. The subjects of the Quadrivium – the second four of the liberating Arts & Sciences have to do with Number, Quantities, and Matter.” These descriptions of the Trivium are from an article entitled Teaching the Trivium to Children. This article includes the following observation: “Unfortunately, the Trivium is not currently presented as a value unto itself. It has been co-‐opted by various religious and philosophic groups as a means to propagate their own dogma and to advance their specialized agendas.” There is an organization entitled the Association of Classical Christian Schools (ACCS), however, the web site materials of this organization provide no mission or vision statement. The total number of members in ACCS is difficult to ascertain, however, state by state lists are provided with five member schools in Colorado. ACCS has an accreditation program with 33 accredited members, but no accredited members in Colorado. There are 13 accreditation candidates, one of which is the Evangelical Christian Academy in Colorado Springs. A review of web sites indicates that all of the non-‐charter Classical Schools in Colorado are identified as Classical Christian Schools EXHIBIT 2-‐3 provides a summary of the schools identified as Classical Schools in Colorado. This includes non-‐charter schools, both those that are members of ACCS and three that are unaffiliated. Also included in this Exhibit are the Jeffco Charter Classical Schools as well as other charter Classical Schools in Colorado.
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EXHIBIT 2-‐3 COLORADO CLASSICAL SCHOOLS 2014-‐2015 FISCAL YEAR
School Association of Classical Christian Schools Arma Dei Academy (1) Augustine Classical Academy (2) Cornerstone Classical Academy 9 30 Evangelical Christian Academy Winter Park Christian School Other Classical Schools in Colorado Truth Christian Academy Rocky Mountain Christian Academy Augustine Classical Academy (3) Jeffco Classical Charter Schools Addenbrooke Classical Grammar School Addenbrooke Classical Academy Golden View Classical Academy (4) Other Colorado Classical Charter Schools Ridgeview Classical School Vanguard Classical School Rocky Mountain Classical Academy Classical Academy
Grades K-‐8 PK-‐12 K-‐12 PreK-‐12 K-‐12 PK-‐12 PK-‐8 PK-‐12
Elementary
Tuition Middle
Highlands Ranch Lakewood Basalt Colorado Springs Tabernash
N/A $ 6,900 $ 7,500 $ 5,500 $ 3,000
N/A $ 6,900 $ 7,500 $ 7,250 $ 3,000
-‐ $ 6,900 $ 7,500 $ 7,250 $ 3,000
Littleton Niwot Denver
$ 4,269 $ 5,990 $ 6,900
$ 4,545 $ 5,990 $ 6,900
$ 4,545
Location
K-‐5 Lakewood 6 thru 1 2 Lakewood K-‐10 Golden K-‐12 K-‐8 K-‐8 K-‐12
Ft. Collins Aurora Colorado Springs Colorado Springs
Senior
$ 6,900
-‐ -‐ -‐
-‐ -‐ -‐
-‐ -‐ -‐
-‐ -‐ -‐ -‐
-‐ -‐ -‐ -‐
-‐ -‐ -‐ -‐
Source: Web p a ges for va ri ous s chool s a nd o rga ni za ti ons Note: Thi s Exhi bi t m a y b e i ncompl ete a s i t i s d i ffi cul t to i denti fy a l l o f the Cl a s s i ca l S chool s i n Col ora do. (1) Arma D ei Aca demy d oes n ot p os t i ts tui ti on s chedul e. (2) Augus ti ne Cl a s s i ca l Aca demy i s n ewl y l oca ted a t the p revi ous s i te for Addenbrooke Cl a s s i ca l Aca demy. (3) As recentl y a s June 2015, thi s s chool w a s ca l l ed the H i ghl a nd Cl a s s i ca l Aca demy. (4) The G ol den Vi ew Cl a s s i ca l Aca demy i s o peni ng through g ra de 10, b ut w i l l e xpa nd a g ra de p er yea r to gra de 12.
Addenbrooke Classical Academy (Grammar and Academy Schools) Founded in 2013, Addenbrooke Academy was housed in what appears to be a former church school facility at 480 South Kipling St. in Lakewood. This facility may have previously housed a school affiliated with the neighboring church; the building which housed the Addenbrooke Classical Academy has a permanent sign identifying it as Belmar Baptist Church. Addenbrooke Classical Academy has moved to a new location at 3940 Teller St. in Lakewood for the 2014-‐2015 school year. This location is adjacent to the Denver Christian Academy. The President of the Addenbrooke Board of Directors has been a full time minister for 21 years and is a Campus Pastor at Church of All Nations in Littleton, one of three such campuses in Colorado. Materials provided by the Church of All Nations includes the following statement:
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“The Church of All Nations is a multi-‐site, dynamic, growing multicultural body of believers. We believe that Christianity is not a religion; it is a relationship with God. At Church of All Nations, we know that God loves each individual person and desires that all know Him personally. So great was His desire, that he sent Jesus Christ, His only son, to save the world from the darkness of sin. This is such incredible news, that we want everyone to know about it.” As noted in EXHIBIT 2-‐3, the previous Addenbrooke Classical Academy facility is now home to the Augustine Classical Academy, a member of ACCS. Golden View Classical Academy The Golden View Classical Academy charter school was approved by the Jeffco Board of Education in 2015 and will begin with a K-‐10 program during the 2015-‐2016 school year. Golden View notes in its proposal that “classical education is language-‐focused and based on the concept of the Trivium, the idea that learning builds on itself in stages in training the mind.” Golden View is affiliated with the Hillsdale College Barney Charter School Initiative where “education mission is based on two principles; academic excellence and institutional independence.” Hillsdale materials note further that: As noted in its Articles of Association, the College undertakes its work “grateful to God for the inestimable blessings resulting from the prevalence of civil and religious liberty and intelligent piety in the land, and believing that the diffusion of sound learning is essential to the perpetuity of these blessings.” The Barney Charter School Initiative has identified the Golden View Classical Academy as one of five classical charter schools being established through this program in 2015, joining eight other classical schools sponsored by the Barney Charter School Initiative. Golden View indicates it is pursuing a partnership with Colorado Christian University (CCU) and their Colleges of Education and Music. The Golden View application states: “Golden View is also pursuing a partnership with the Colorado Christian University and their Colleges of Education and Music. The partnerships have not been defined though partnering with a teacher-‐training program considering a track in classical education would be of value to Golden View Classical as would having access to staff and facilities for the Golden View Classical music program.” The mission of CCU states: “Colorado Christian University cultivates knowledge and love of God in a Christ-‐centered community of learners and scholars, with an enduring commitment to the integration of exemplary academics, spiritual formation, and engagement with the world” CCU has an extensive Statement of Faith which states: 30
• •
• • • •
“We believe the Bible to be the inspired, the only infallible, authoritative word of God.” “We believe in the deity of our lord Jesus Christ, in His virgin birth, in His sinless life, in His miracles, in His vicarious and atoning death through his shed blood, in His bodily resurrection, in His ascension to the right hand of the Father, and in His personal return to power and glory.” “We believe in the salvation of lost and sinful people, regeneration by the Holy Spirit is absolutely essential.” “We believe in the present ministry of the Holy Spirit by whose indwelling the Christian is enabled to live a Godly life.” “We believe in the resurrection of both the saved and the lost; they that are saved unto the resurrection of life and they that are lost unto resurrection of damnation.” “We believe in the spiritual unity in our Lord Jesus Christ.”
CCU also requires a “strong spiritual reference” for freshman applicants. Colorado Charter Schools Statutes Colorado Revised Statutes 22-‐30.5-‐104. Charter School – requirements – authority states the following: “A charter school shall be a public, nonsectarian, non-‐religious, non-‐home-‐based school which operates within a public school district.” Core Knowledge Charter Schools The remaining core knowledge charter schools do not appear to be affiliated with any state or national programs. nor are they based on any specific private school programs. These schools include: • • • • • •
Collegiate Academy of Colorado Excel Academy Jefferson Academy (Elementary, Junior, and Senior) Lincoln Academy Rocky Mountain Academy of Evergreen Woodrow Wilson Academy
Doral Academy -‐ Recently Approved Charter School This most recent charter school approved by the Board of Education is a member of the Doral Academy Inc. Charter School Network. This is a for profit EMO which currently has six schools in Florida, all located in the Miami area, and three in Nevada. One of the schools located in Doral, Florida is identified as the Doral Performing Arts and Entertainment Academy. The mission of the school is to: “Maximize student potential using arts-‐integrated curriculum to educate the whole child. DAC will actively engage families and the community in this pursuit.”
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The Doral Jeffco application is focused on the performing arts and has identified a desire to locate in the northeast portion of Jefferson County. The Doral application anticipates a contract with Academia as a management services provider. Both Doral Academy Inc. and Academica appear to have the same board of directors and have the same address. Academia has been involved in a number of investigations by the Miami-‐Dade Office of Management and Compliance (OMCA) in recent years. They are also included in a review currently under way by the U.S. Department of Education as part of a broader review of charter school management companies nationwide. Issues identified by the OMCA audits include: •
• • • • •
Multiple for profit Limited Liability Companies controlled by Academica, with many involved in real estate activities related to funding for charter school capital improvements at high interest rates; Undisclosed related party transactions; Potential abuse of tax exemption benefits; Academica, through its attorneys, frequently failed to provide requested financial information; Establishment of an unaccredited college (Doral College) to provide dual credit for students; and A $400,000 grant to Doral College, which represented substantially all of the college’s 2011-‐ 2012 revenue, from Doral Academy Charter School.
Additional information pertaining to the audits of Doral Inc. and Academia by OMCA as well as local newspaper articles and League of Women Voters materials is contained in Attachment A.
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ISSUE NUMBER THREE NONRESIDENT STUDENTS IN JEFFCO CHARTER SCHOOLS One often overlooked aspect associated with funding school districts in Colorado, specifically, students enrolled in charter schools, is a direct cost to the taxpayers of Jefferson County for nonresident students enrolled in charter schools authorized by the Jeffco Board of Education. This involves circumstances where students attending these schools are not residents of Jefferson County, yet the schools receive the full per pupil funding authorized by the Public School Finance Act of 1994 (the Finance Act) along with the related mill levy overrides that have been approved by Jeffco voters over the years. Nonresident Students Colorado Revised Statutes (CRS) 22-‐36-‐101 contain the following language: Commencing with the 1994-‐1995 school year and thereafter, nonresident students from other school districts within the state who apply pursuant to the procedures established pursuant to subsection (2) of this section to enroll in particular programs or schools within such school district without requiring the nonresident pupils to pay tuition. Subsection (2) requires every district to adopt policies and procedures to implement the provisions of the statutes and it goes on to identify specific issues that can be addressed by the policy. Jeffco has adopted Policy JFAB, Admission of Nonresident Students which states: Nonresident students shall be admitted in accordance with Board policy on inter-‐District choice/open enrollment. The parents or guardians of Colorado students who are not residents of this District shall not be charged tuition. Nonresident students must apply for admission directly to the school they wish to attend. The principal shall determine if the student is admitted in accordance with the policy on inter-‐District choice/open enrollment. EXHIBIT 3-‐1 provides a listing of the number of Jeffco students enrolled in different school districts as well as the number of students from other Colorado districts enrolled in Jeffco schools. In the 2014-‐ 2015 fiscal year, a total of 6,752 students from 34 different Colorado school districts and 43 students from foreign countries, totaling 6,796 nonresident students attended schools in Jeffco. Conversely, a total of 3,567 Jeffco students attended schools in 23 other school districts in Colorado.
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EXHIBIT 3-‐1 COLORADO S TUDENTS N OT ATTENDING DISTRICT OF RESIDENCE 2014-‐2015
District Mapleton 1 Adams 1 2 Five Star Adams 1 4 Brighton District 2 7J Bennett 2 9J Westminster 5 0 Englewood Sheridan 2 Cherry Creek Littleton 6 Adams-‐Arapahoe 2 8J Byers 3 2J St. Vrain Valley RE 1 1 Boulder Valley Clear Creek RE 1 Denver County 1 Douglas County RE 1 Lewis Palmer Falcon 4 9 Eagle County RE 5 0 Elizabeth C-‐1 Harrison 2 Fountain 8 Colorado Springs 1 1 Academy Gilpin County RE-‐1 West Grand 1 -‐JT East Grand 2 Platte Canyon 1 Branson Reorganized 8 2 Monte Vista C-‐8 Julesburg RE-‐2 Lake County Thompson RE-‐2 Akron RE-‐1 Weld County RE-‐1 Weld County RE-‐31 Greely 6 Weld County RE-‐8 Charter School I nstitute Colorado School for Blind Foreign Countries Total
Number of Students In Jeffco 115 893 40 130 1 1,342 49 44 43 209 24 1 91 263 254 2,819 223 0 0 1 1 1 2 1 1 5 1 1 174 0 0 0 2 3 1 1 9 2 5 0 0 43 6,795
Jeffco Students in Other Districts 68 129 0 15 0 70 40 31 0 602 14 156 24 304 65 1,168 400 2 53 0 0 0 0 0 0 7 0 0 23 15 2 43 0 0 0 0 0 0 0 326 10 0 3,567
Net Add'l Jeffco Students 47 764 40 115 1 1,272 9 13 43 -‐393 10 -‐155 67 -‐41 189 1,651 -‐177 -‐2 -‐53 1 1 1 2 1 1 -‐2 1 1 151 -‐15 -‐2 -‐43 2 3 1 1 9 2 5 -‐326 -‐10 43 3,228
Source: Col ora do D epa rtment o f Educa ti on -‐ 2014 Pupi l Members hi p; S tudents a ttendi ng p ubl i c s chool s n ot i n thei r p a rents ' d i s tri ct, s ta te, o r country o f res i dence.
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Jeffco Charter School Enrollment The total enrollment (membership) for the Jefferson County School District for the 2014-‐2015 fiscal year was 86,5471; this number includes 7,676 students who attended charter schools as identified in EXHIBIT 3-‐2.
EXHIBIT 3-‐2 JEFFERSON COUNTY P UBLIC SCHOOLS R-‐1 CHARTER SCHOOL ENROLLMENT 2014-‐2015 Grades Served K-‐12 K-‐12 Pre K-‐6 PreK-‐12 K-‐8 PreK-‐8 K-‐6 K-‐12 9-‐12 Pre K-‐8 Pre K-‐8 PreK-‐8 9-‐12 Pre K-‐12 Pre K-‐8 K-‐12 Pre K-‐8 Pre K-‐12
School Addenbrooke Classical Academy Collegiate Academy of Colorado Compass Montessori Wheat Ridge Compass Montessori Golden Excel Academy Free Horizon Montessori Jefferson Academy Elementary Jefferson Charter Academy Jefferson Charter Academy High School Lincoln Charter Academy Montessori Peaks Academy Mountain Phoenix Community School New America School Rocky Mountain School for Deaf Rocky Mountain Academy of Evergreen Two Roads Charter School Woodrow Wilson Academy Total Charter Enrollment
Prek-‐12 Less Count Preschool 223 0 397 0 283 (52) 403 (36) 518 0 379 (69) 692 0 812 0 404 0 656 (35) 550 (69) 564 (69) 327 0 71 (9) 405 (45) 555 0 845 (24) 8,084 (408)
Source: CDE 2 014 Membership by School a nd Grade
K-‐12 Count 223 397 231 367 518 310 692 812 404 621 481 495 327 62 360 555 821 7,676
The funding for Jeffco and other districts in Colorado is determined by the Colorado Finance Act of 1994. Colorado Revised Statutes (C.R.S.) 22-‐54-‐104 which state: Funding is based on an annual October pupil count. Each school district counts pupils in membership as of the school day nearest October 1. The October count results in a funded count for each school district; these student counts are less than the official membership based upon a number of factors. Materials included in a publication entitled Understanding Colorado School Finance and Categorical Program Funding, published by CDE in July 35
2014, describes these factors to include: the base funding which was $7,076 for Jeffco in 2014-‐2015. Additional funding is provided for things such as cost of living, personnel costs, size of district, and at risk funding. A key item involves the Negative Factor which is a reduction to the overall program with a per pupil reduction of $1,015 per House Bill 14-‐1298. Funding of Nonresident Charter School Students EXHIBIT 3-‐3 identifies the total funded pupil count for Jeffco as provided by the Finance Act and identifies the per pupil allocation from state resources as well as the per pupil amount to be provided by local taxpayers via specific ownership and property taxes. In addition to the per pupil amount based on the Finance Act, CDE materials also identify the per pupil amount generated by mill levy overrides for each school district.
EXHIBIT 3-‐3 JEFFERSON COUNTY PUBLIC SCHOOL DISTRICT NO. R-‐1 CALCULATION OF FINANCE ACT REVENUES FISCAL YEAR 2014-‐2015 Total Funded Pupil Count State Funding State Allocation Local Share Per Finance Act Specific Ownership Tax Mill Levy Override Total Local Share Total Revenue Per Pupil
81,235 $ 4,392 2,498 185 1,395 4,078 $ 8,470
Source: Col ora do D epa rtment o f Educa ti on, Publ i c S chool F i na nce Act o f 1994, F i na l F i s ca l Yea r 2014-‐2015 F undi ng S umma ry
EXHIBIT 3-‐3 indicates that of the $8,470 per-‐pupil amount authorized for Jeffco per the State Finance Act and the mill levy overrides, $4,078 or 48 percent of the total per-‐pupil allocation is provided by the taxpayers of Jefferson County, while $4,392 or 52 percent is provided by the State of Colorado. EXHIBIT 3-‐4 provides an analysis of the choice enrollment rates for Jeffco students from reports prepared by the Jeffco Department of Instructional Reporting for the 2013-‐2014 and 2014-‐2015 fiscal years. These reports provide information only for K-‐12 students and exclude enrollment pertaining to preschool students who are not included as students for purposes of district funding per the State Finance Act.
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EXHIBIT 3-‐4 JEFFERSON COUNTY SCHOOL DISTRICT R-‐1 ANALYSIS OFK-‐12 CHOICE ENROLLMENT RATES 2013-‐2014 AND 2014-‐2015
Non-‐Resident Students 2013-‐2014 K-‐12 Choice Enrollment Rates Report (1) Attending a Neighborhood School Attending a n O ption School Attending a Special School Attending a Charter School Total N on-‐Resident Students 2014-‐2015 K-‐12 Choice Enrollment Rates Report (2) Attending a s chool other than c harter, option or Special Attending a Charter, O ption, or Special School Total N on-‐Resident Students In-‐District Students 2013-‐2014 K-‐12 Choice Enrollment Rates Report (1) Attending a Neighborhood School Attending Neighborhood School not School of Residence Attending a n O ption School Attending a Special School Attending a Charter School Total In-‐District Students 2014-‐2015 K-‐12 Choice Enrollment Rates Report (3) Attending a School of Residence Attending School Not a School of Residence Attending a Charter, O ption, or Special School Total In-‐District Students Total Membership
2013-‐2014 2014-‐2015 (2) Membership % of Membership % of Count Membership Count Membership 3,977 206 1 1,703 5,887
67.56% 3.50% 0.02% 28.93% 100.00%
4,444 230 1 1,903 6,578
67.56% 3.50% 0.02% 28.93% 100.00%
3,977 1,910 5,887
67.56% 32.44% 100.00%
4,444 2,134 6,578
67.56% 32.44% 100.00%
52,857 15,006 3,556 170 5,466 77,055
68.60% 19.47% 4.61% 0.22% 7.09% 100.00%
-‐ -‐ -‐ -‐ -‐ -‐
52,857 15,006 9,192 77,055 82,942
68.60% 19.47% 11.93% 100.00%
51,640 15,848 9,537 77,025 83,603
-‐ -‐ -‐ -‐ -‐ -‐ 67.04% 20.58% 12.38% 100.00%
Source: 2013-‐2014 a nd 2014-‐2015 Choi ce Enrol l ment R a tes R eports -‐ Jeffco D epa rtment o f I ns tructi ona l Da ta R eporti ng. (1) 2013-‐2014 Choi ce Enrol l ment K-‐12 Enrol l ment D a ta R a tes R eport p rovi des s epa ra te d a ta for Opti on, Cha rter, a nd S peci a l S chool s . (2) Non-‐Res i dent 2014-‐2015 m embers hi p e s ti ma ted to b e cons i s tent w i th 2013-‐2014 rel a ti ons hi ps (3) 2014-‐2015 Choi ce Enrol l ment R a tes R eport s umma ri zes the Opti on, Cha rter, a nd S peci a l S chool s a s a s i ngl e n umber o f s tudents ..
The 2013-‐2014 and previous similar reports since 2009-‐2010, all identified the nonresident charter school students as a separate category. These numbers are identified in the 2013-‐2014 information contained in EXHIBIT 3-‐4. The most recent report prepared for the 2014-‐2015 fiscal year which includes years 2010-‐2011 through 2014-‐2015 excludes the separate listing of nonresident students in charter schools and combines the nonresident charter school students in a group which includes option, and special schools nonresident students. The number of 2014-‐2015 nonresident charter school students in EXHIBIT 3-‐4 is based on an estimate using the charter school student nonresident enrollment
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relationship with the option and special schools nonresident enrollment included in the 2013-‐2014 report. Using the 2013-‐2014 relationship between the charter schools, the option schools and the special schools for nonresident students, it is estimated that 1,903 of the 6,795 charter school K-‐12 students, or 28 percent of the students enrolled in Jeffco charter schools for the 2014-‐2015 fiscal year, were not residents of Jefferson County. The overall 2014-‐2015 Jeffco Charter School membership represents 7.9 percent of the total membership of the Jefferson County School District. EXHIBIT 3-‐5 provides a summary of the estimated direct financial impact on Jefferson County taxpayers resulting from the nonresident students enrolled in Jeffco Charter Schools. When this number is reduced by 97.16% to identify the estimated number of charter school students included in the Jeffco Per Pupil Revenue (PPR), the number of nonresident charter school students for funding purposes is estimated to be 1,849. The Finance Act is designed to identify the state allocation and local share on a per pupil basis. All of the property taxes and specific ownership taxes (local share) are allocated to the district on a per pupil basis regardless of the student’s place of residence and, based on the student count for each charter school. The charter schools currently receive the total per pupil amount for each student to include the mill levy overrides. By identifying the number of nonresident students enrolled in Jeffco charter schools and relating these enrollment numbers to the portion of the resources provided to the charter schools directly attributable to Jefferson County taxpayers (property taxes associated with the Finance Act, specific ownership taxes associated with the Finance Act, and the mill levy override property taxes), an estimated amount of $7,539,723 was paid by Jefferson County taxpayers for the 2014-‐2015 fiscal year to finance the nonresident students enrolled in Charter Schools. This amount includes an estimated $2,579,355 applicable to the mill levy increases authorized by mill levy override elections.
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EXHIBIT 3-‐5 JEFERSON COUNTY P UBLIC SCHOOLS CALCULATION OF LOCAL RESOURCES FOR N ON-‐RESIDENT STUDENTS IN CHARTER SCHOOLS 2014-‐2015 FISCAL YEAR Total District Membership Excluding Preschool Students ( 1) Total Preschool Students ( 2) Adjusted Membership Funded Enrollment ( 1) Funded Enrollment Percentage Estimated Total of Non-‐Resident Students i n Charter Schools ( 3) Estimated Number of Funded Non-‐Resident Charter School Students Per Pupil Cost to Jeffco Taxpayers per Funded Student ( 4) Estimated Cost for Out-‐of-‐District Students Attending Charter Schools
86,547 (2,934) 83,613 81,235 97.16% 1,903 1,849 $ 4,078 $ 7,539,723
(1) CDE Publ i c F i na nce Act o f 1994 -‐ 2014-‐15 F undi ng S umma ry. (2) CDE 2014 Members hi p b y S chool a nd G ra de. (3) Exhi bi t 3-‐4. (4) Exhi bi t 3-‐3.
Nonresident Students in District Managed Schools When the charter school nonresident students are excluded, Jeffco still has an additional 4,176 nonresident students attending district managed schools. There are three factors that make the concept of local taxpayers funding for nonresident students in district managed schools different from the funding of nonresident students attending charter schools: •
•
•
Limitation on the Availability of Resources -‐ All local resources provided to charter schools for nonresident students, to include an estimated $2,579,355 of mill levy override resources, are lost to the district and are unavailable to aid in the financing of district educational programs and support services. Impact of State Share -‐ In the case of the nonresident students enrolled in district managed schools, Jeffco receives the value from the state share, which per EXHIBIT 3-‐3, is $4,392 per student resulting in an additional $19,949,474 of total resources received by Jeffco from the State of Colorado for nonresident students in district managed schools. Incremental Cost per student – Nonresident students will be approved for a district managed school only if a school has classroom space available for the student. The term “classroom space” includes the availability of teaching staff. Jeffco Regulation JFBA-‐E3 Administrative Transfer Procedures and Checklist for Principals states: “The recommendations of the principals will be based on genuine necessity and space availability.”
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If a nonresident student is accepted in a district managed school, this would normally indicate there is space available to place the student in an existing classroom for which a teacher has already been assigned. In this case the increased costs to the district would be attributable to the per student allocation for supplies and materials allocated to each school and any increase in the hours for teacher assistant’s. All of the resources received by Jeffco for nonresident students, both the state share and those provided by local taxpayers, become a revenue component of the overall General Fund Budget. Jeffco does not allocate all of the resources received from the Finance Act to schools on a per pupil basis. The staffing for district managed schools is based on the student-‐teacher ratio included in the district budget. If there is space in a classroom, meaning the number of students in a classroom may be below the authorized student-‐teacher ratio, the incremental cost for each student is minimal as the major cost, that of a teacher, has already being incurred. The major difference between the allocation for charter schools and for District-‐managed schools is the total per student amount per the Finance Act, allocated to the charter schools represents lost resources to support district managed education programs and support services. New Golden View Classical Academy The 2015-‐2016 enrollment for Golden View Classical Academy is currently unknown; however, the charter application presented by Golden View identified 171 students with an intent to enroll by zip code. Based on zip code maps available on the internet, EXHIBIT 3-‐6 provides a list of the zip codes and locations for nonresident students intending to enroll at Golden View Classical Academy. The estimated nonresident students represent seven percent of the total students intending to enroll per the Golden View charter application.
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EXHIBIT 3-‐6 GOLDEN VIEW CLASSICAL ACADEMY NONRESIDENT INTENT TO ENROLL STUDENTS PER GOLDEN VIEW CLASSICAL ACADEMY APPLICATION AUGUST 15, 2014 Zip Code 80211 80525 80223 80421 80301 80219 80249 80113 80027 80129
Location Denver Ft. Collins Denver Platte Canyon Boulder Denver Denver Englewood Louisville Littleton
Total
Number of Students 6 3 3 2 2 2 1 2 1 3 25
Source: G ol den Vi ew Cl a s s i ca l Aca demy Appl i ca ti on a nd m i l i s s a da ta l ookups .
EXHIBIT 3-‐6 includes only those zip codes which are 100 percent outside of Jefferson County. A number of zip codes include both Jefferson County and other jurisdictions such as Denver and Littleton. Nonresident students indicating intent to enroll at Golden View Classical Academy as of August 15, 2014 represents seven percent of the intended enrollment for the school. Materials provided in the Golden View Classical Academy application anticipates an enrollment of 498 for year one, moving to a total enrollment of 672 for year five. The total number of nonresident students who will be attending this charter school is unknown; however, if the number of nonresident students remains at seven percent, a total of 35 nonresident students could be attending Golden View Classical Academy for the 2015-‐2016 fiscal year.
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ISSUE NUMBER FOUR STUDENT MOBILITY IN CHARTER SCHOOLS Students transfer to different schools for a number of reasons to include moving, change in family status, school and teacher reputations, problems with the existing school, and parent preference. There have been numerous studies pertaining to the issue of student mobility, all of which indicate that movement from school to school or between districts is not conducive to effective student performance. The Colorado Department of Education (CDE) materials state that “mobile students are more likely to fall behind academically and have higher dropout rates.” An item identified in a report entitled Mobility of Students in Michigan’s Charter Schools, prepared by Michigan State University in 2014 addressed the issue of transferring between charter schools and schools within a single district. This study indicates that “students who move between schools within a district are likely to use the same curriculum materials and pacing guides, unlike students who move between districts.” A study undertaken by the Brookings Institution entitled The Impact of Milwaukee Charter Schools on Student Achievement found that “student mobility has a negative effect on performance and it is a more robust predictor of student performance than the organizational factors we consider.” A study conducted for the State of Michigan studied the mobility of students in Michigan charter schools. It looked at charter schools, traditional public schools, and those attending schools outside their resident district. This report was unique to the State of Michigan and evaluated information by grade levels, tracking students who remained in the same school for an extended period of time and those who moved between schools. This study finds that “the rate of mobility for students in Michigan charter schools is likely to have a negative effect on students attending those schools. Students who remain longer in a district will tend to have improved test scores.” Based on these and other materials on the topic of student mobility, the issue of student mobility appears to be an important factor in long-‐term student success; thus, the identification of student mobility rates for charter schools and the Jeffco district managed schools can provide some insight regarding the movement of students between charter schools and the district managed schools. CDE has developed a number of reports that provide data on student mobility for each school in the state. The various mobility rates provided by CDE include a cumulative number of students in membership at any time during the academic year, thus, the total pupil count used for assessing student mobility is greater than the actual pupil membership. Data collected by CDE identifies a “Mobility Incidence Rate,” which is the duplicated count of grade K-‐12 students who moved into or out of a school or district. This rate is applied to the number of students that were part of the same membership base at any time during the year. CDE collects information on student mobility by gender and race/ethnicity, instructional programs/service type, and by grade.
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The most recent mobility data provided by CDE is based on the 2013-‐2014 fiscal year. The categories used for the Instructional Program Service Type provides data based on the services provided to students belonging to one or more categories as follows: • • • • • • •
Students with Disabilities – Students that have been formally identified as having physical or health conditions that may have a significant impact on the student’s ability to learn; Limited English Proficiency – All students identified as either non-‐English proficient or limited English proficient; Economically Disadvantaged – Students who qualify for the Federal School Lunch Act free or reduced lunch (FRL) program; Migrant – Students enrolled in a specifically designed program whose parent or spouse is a migratory agricultural worker; Title 1 – Students identified by the schools as failing, or most at risk to meet the State’s challenging student academic achievement standards; Homeless – A homeless individual lacks a fixed, regular, and adequate nighttime residence; and Gifted and Talented – Students who have been formally identified, using district-‐wide procedures aligned with CDE guidelines, as being endowed with a high degree of exceptionality or potential in mental ability, academics, creatively, or talents, or leadership.
Of these categories, the Students with Disabilities, English Language Learners, the Economically Disadvantaged, and the Gifted and Talented are the categories with the largest number of students enrolled in Jeffco schools. EXHIBIT 4-‐1 provides a summary of the mobility rate for charter schools and for the district managed schools based on the instructional programs.
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EXHIBIT 4-‐1 MOBILITY RATES BY INSTRUCTIONAL P ROGRAM CHARTER AND DISTRICT-‐MANAGED SCHOOLS 2013-‐2014 FISCAL YEAR
Enrollment Categories
Charter Total
Total Enrollment Mobility I nstances Mobility Rate STUDENTS WITH DISABILITIES Total Students w/Disabilities Mobility I nstances Mobility Rate % of School Enrollment ENGLISH L ANGUAGE L EARNERS Total English Language Learners Mobility I nstances Mobility Rate % of School Enrollment ECONOMICALLY DISADVANTAGED STUDENTS Total Economically Disadvantaged Mobility I nstances Mobility Rate % of School Enrollment MIGRANT STUDENTS Total Migrant Students Mobility I nstances Mobility Rate % of School Enrollment TITLE ONE STUDENTS Total Title O ne Students Mobility I nstances Mobility Rate % of School Enrollment HOMELESS STUDENTS Total Homeless Students Mobility I nstances Mobility Rate % of School Enrollment GIFTED AND TALENTED STUDENTS Total Gifted a nd Talented Mobility I nstances Mobility Rate % of School Enrollment
District Total
District Total Excluding Charters
7,992 1,230 15.4%
90,641 10,193 11.2%
82,649 8,963 10.8%
644 71 11.0% 8.1%
9,045 1,176 13.0% 10.0%
8,401 1,105 13.2% 10.2%
474 178 37.6% 5.9%
7,329 1,287 17.6% 8.1%
6,855 1,109 16.2% 8.3%
1,449 304 21.0% 18.1%
31,532 4,171 13.2% 34.8%
30,083 3,867 12.9% 36.4%
0 0 0.0% 0.0%
39 12 30.8% 0.0%
39 12 30.8% 0.0%
403 240 59.6% 5.0%
11,759 1,926 16.4% 13.0%
11,356 1,686 14.8% 13.7%
95 31 32.6% 1.2%
2,347 823 38.1% 2.6%
2,252 792 35.2% 2.7%
619 28 4.5% 7.7%
11,783 491 4.2% 13.0%
11,164 463 4.1% 13.5%
Source: Col ora do D epa rtment o f Educa ti on S chool Mobi l i ty R a tes b y I ns tructi ona l Progra m 2013-‐2014
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The most significant variances in EXHIBIT 4-‐1 indicate the following: • • • • •
The overall mobility rate for students in district managed schools is just under five percent less than that for charter schools; The percentage of school enrollment and the mobility rate for Students with Disabilities is two percent higher for district managed schools; The mobility rate for English Language Learners is considerably higher for charter schools; The mobility rate for Economically Disadvantaged Students is approximately eight percent higher for charter schools; and The percentage of total Gifted and Talented students and the mobility rate for Gifted and Talented Students is essentially similar for both charter and district managed schools.
EXHIBIT 4-‐1 provides general comparisons; however, to fully understand the mobility impact on charter schools, it is necessary to review EXHBIT 4-‐2 which contains information pertaining to these categories for each charter school EXHIBIT 4-‐2 JEFFERSON COUNTY PUBLIC SCHOOLS CHARTER SCHOOLS STUDENT MOBILITY RATES BY INSTRUCTIONAL PROGRAM 2013-‐2014 FISCAL YEAR
Enrollment Categories Total Enrollment Mobility Instances Mobility Rate
Adden brooke 127 44 34.6%
Compass Compass Free Jeff Jeff Jeff Lincoln Rocky Mont Mont Excell Horizon Acad Acad Acad Charter Mtn Mont Mtn W/R Golden Academy Mont Elem K-‐12 Sr High School Deaf Peaks Phoenix 234 359 532 344 708 778 423 633 64 495 489 7 13 28 42 19 185 14 30 3 41 68 3.0% 3.6% 5.3% 12.2% 2.7% 23.8% 3.3% 4.7% 4.7% 8.3% 13.9%
New Amer School 403 240 59.6%
Stud w/Disabilities Mobility Instances Mobility Rate % of School Enrollment
19 6 31.6% 15.0%
29 0 0.0% 12.4%
40 1 2.5% 11.1%
46 2 4.3% 8.6%
39 57 22 5 3 5 12.8% 5.3% 22.7% 11.3% 8.1% 2.8%
5 0 0.0% 1.2%
53 64 44 2 3 3 3.8% 4.7% 6.8% 8.4% 100.0% 8.9%
English Lang Learners Mobility Instances Mobility Rate % of School Enrollment
4 3 75.0% 3.1%
5 0 0.0% 2.1%
5 0 0.0% 1.4%
9 2 22.2% 1.7%
5 17 25 1 0 11 20.0% 0.0% 44.0% 1.5% 2.4% 3.2%
3 0 0.0% 0.7%
56 2 3.6% 8.8%
Econ Disadvantaged Mobility Instances Mobility Rate % of School Enrollment
50 9 18.0% 39.4%
7 1 14.3% 3.0%
24 2 8.3% 6.7%
103 4 3.9% 19.4%
87 121 94 69 9 3 19 2 10.3% 2.5% 20.2% 2.9% 25.3% 17.1% 12.1% 16.3%
Migrant Students Mobility Instances Mobility Rate % of School Enrollment
0 0 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0 0 0 0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0 0 0.0% 0.0% 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0.0% 0.0%
Title One Students Mobility Instances Mobility Rate % of School Enrollment
0 0 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0 0 0 0 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0 0 0.0% 0.0% 0.0% 0.0%
0 403 0 240 0.0% 59.6% 0.0% 100.0%
Homeless Students 1 Mobility Instances 1 Mobility Rate 100.0% % of School Enrollment 0.8%
0 0 0.0% 0.0%
3 1 33.3% 0.8%
17 1 5.9% 3.2%
9 6 5 3 2 2 33.3% 33.3% 40.0% 2.6% 0.8% 0.6%
3 0 0.0% 0.7%
4 0 0.0% 0.6%
0 0 0 0 0.0% 0.0% 0.0% 0.0%
Gifted and Talented Mobility Instances Mobility Rate % of School Enrollment
16 0 0.0% 6.8%
21 0 0.0% 5.8%
74 2 2.7% 13.9%
68 30 33 59 3 0 2 1 4.4% 0.0% 6.1% 1.7% 19.8% 4.2% 4.2% 13.9%
43 0 0.0% 6.8%
0 73 0 0 0.0% 0.0% 0.0% 14.7%
7 1 14.3% 5.5%
0 27 0 1 0.0% 3.7% 0.0% 5.5%
140 30 48 4 0 2 2.9% 0.0% 4.2% 22.1% 46.9% 9.7%
Rocky Collegiate Woodrow Mtn Academy Two Wilson Acad Colorado Roads Acad Total 440 460 695 806 7,990 62 60 229 145 1,230 14.1% 13.0% 32.9% 18.0% 18.0%
38 20 37 1 18 4 2.6% 85.0% 10.8% 7.8% 5.0% 8.4%
47 46 3 13 6.4% 30.4% 10.2% 6.6%
38 644 9,045 8,401 2 71 1,176 1,105 5.3% 11.0% 13.0% 13.2% 4.7% 8.1% 10.0% 10.2%
4 0 0.0% 0.9%
17 15 0 1 0.0% 6.7% 3.7% 2.2%
19 474 7,329 6,855 5 178 1,287 1,109 26.3% 37.6% 17.6% 16.2% 2.4% 5.9% 8.1% 8.3%
93 291 19 6 167 6 6.5% 57.4% 31.5% 19.0% 72.2% 4.3%
106 115 23 38 21.7% 33.0% 23.0% 16.5%
52 1,449 31,532 30,083 9 304 4,171 3,867 17.3% 21.0% 13.2% 12.9% 6.5% 18.1% 34.8% 36.4%
0 0 0.0% 0.0%
0 0 0 0 0.0% 0.0% 0.0% 0.0%
0 0 39 39 0 0 12 12 0.0% 0.0% 30.8% 30.80% 0.0% 0.0% 0.0% 0.0%
0 0 0.0% 0.0%
0 0 0 0 0.0% 0.0% 0.0% 0.0%
0 403 11,759 11,356 0 240 1,926 1,686 0.0% 0.0% 16.4% 14.8% 0.0% 5.0% 13.0% 13.7%
8 5 4 3 3 3 37.5% 60.0% 75.0% 1.6% 1.2% 0.9%
11 8 6 3 54.5% 37.5% 2.4% 1.2%
11 95 2,347 2,252 3 31 823 792 27.3% 32.6% 38.1% 35.2% 1.4% 1.2% 2.6% 2.7%
28 22 1 6 3.6% 27.3% 6.1% 3.2%
44 619 11,783 11,164 1 28 491 463 2.3% 4.5% 4.2% 4.1% 5.5% 7.7% 13.0% 13.5%
10 253 3 149 30.0% 54.2% 2.0% 62.8%
22 1 4.5% 4.5%
0 79 0 10 0.0% 12.7% 0.0% 18.0%
Source: Col ora do D epa rtment o f Educa ti on S chool Mobi l i ty R a tes b y I ns tructi ona l p rogra m 2013-‐2014
The most significant information contained in Exhibit 4-‐2 involves the following:
45
District District Net of Total Charters 90,641 82,651 10,193 8,963 11.2% 10.8%
•
•
•
•
Overall Mobility Rates -‐ The Addenbrooke Classical Academy, the New America School-‐ Lakewood, and the Two Roads Academy, all with mobility rates in excess of 30 percent, have the highest overall mobility rates among the charter schools. Students with Disabilities -‐ Eleven of the 17 charter schools have less than 10 percent of their enrollment identified as Students with Disabilities. Four charter schools, Addenbrooke Classical Academy, Jefferson Academy K-‐12, New America School-‐Lakewood, and Two Roads Academy, have a mobility rate in excess of 30 per cent for these students while the similar mobility rate for the district managed schools is 13.2 percent. The Jefferson Academy Senior High, the two Compass Montessori schools, and Mountain Phoenix Community School had a mobility rate of 2.6 percent or less for these students. Students with Disabilities represent 8.1 percent of the total student enrollment for the charter schools, while the similar rate for district-‐managed schools is 10.2 percent. English Language Learners (ELL) – EXHIBIT 4-‐2 identifies a number of charter schools with a high percentage of mobility in this category, however, with the exception of the New America School-‐Lakewood, most have a small number of students in this category. Five charter schools have a low percentage of enrollment for ELL students, but a high percentage of mobility for this group of students. (Excel Academy, Free Horizon Montessori, Jefferson Academy K-‐12, Mountain Phoenix, and Woodrow Wilson Academy). Economically Disadvantaged Students -‐ The total number of economically disadvantaged students in charter schools is approximately one half of the total percentage for the district managed schools. Two schools, Compass Montessori of Wheat Ridge (3 percent) and the Rocky Mountain Academy of Evergreen (4.3 percent) have extremely low percentages of students identified as Economically Disadvantaged. Charter schools with high mobility rates for economically disadvantaged students include Addenbrooke Classical Academy (18%), Jefferson Academy K-‐12 (20.2%), New America School-‐Lakewood (57.4%), Rocky Mountain Academy of Evergreen (31.9%), Collegiate Academy of Colorado (21.7%), Two Roads Academy (33.0%), and Woodrow Wilson Academy (17.3%).
EXHIBIT 4-‐3 provides a summary of the mobility rates for charter and district managed schools by ethnic group.
46
EXHIBIT 4-‐3 MOBILITY RATES BY ETHNIC G ROUP CHARTER AND DISTRICT-‐MANAGED SCHOOLS 2013-‐2014 FISCAL YEAR
Enrollment Categories Total Enrollment Mobility I nstances Mobility Rate White Students White Students Mobility I nstances Mobility Rate % of School Enrollment Black/African American Black/African American Students Mobility I nstances Mobility Rate % of School Enrollment Hispanic/Latino Hispanic/Latino Students Mobility I nstances Mobility Rate % of School Enrollment Asian Students Total Migrant Students Mobility I nstances Mobility Rate % of School Enrollment American Indian American I ndian Students Mobility I nstances Mobility Rate % of School Enrollment
Charter Total 7,992 1,230 15.4%
Pacific Islanders Pacific I slander Students Mobility I nstances Mobility Rate % of School Enrollment Two or More Races Total Two or More Students Mobility I nstances Mobility Rate % of School Enrollment
District Total District Total Excluding Charters 90,641 82,649 10,193 8,963 11.2% 10.8%
5,964 794 13.3% 74.6%
60,147 6,193 10.3% 66.4%
54,183 5,399 10.0% 65.6%
80 17 21.3% 1.0%
1,182 230 19.5% 1.3%
1,102 213 19.3% 1.3%
1,323 352 26.6% 16.6%
22,607 2,950 13.0% 24.9%
21,284 2,598 12.2% 25.8%
194 16 8.2% 2.4%
2,779 291 10.5% 3.1%
2,585 275 10.6% 3.1%
35 16 45.7% 0.4%
643 136 21.2% 0.7%
608 120 19.7% 0.7%
13 2 15.4% 0.2%
168 34 20.2% 0.2%
155 32 20.6% 0.2%
381 37 9.7% 4.8%
3,115 358 11.5% 3.4%
2,734 321 11.7% 3.3%
Source: Col ora do D epa rtment o f Educa ti on S chool Mobi l i ty R a tes b y I ns tructi ona l Progra m 2013-‐2014
47
Exhibit 4-‐3 indicates the following: • •
•
•
•
•
•
Charter Schools have a nine percent greater number of white students than the district managed schools; The overall enrollment of Black/African American students in Jeffco is low, representing only 1.3 percent of the total student enrollment. The charter schools have a slightly higher percentage of mobility (2 percent) for Black/African American students than the district managed schools; The Hispanic/Latino group represents the second highest number of enrolled students in charter schools, second only to the enrollment of white students. Although charter schools have a smaller percentage of Hispanic/Latino students (16.6%) these students have a mobility rate that is twice the rate for district managed schools; Asian Students – The charter schools have a slightly lower percentage of these students and they have a lower mobility rate for Asian students when compared to district managed schools; American Indian Students – Both the district managed schools and the charter schools had an enrollment of less than one percent for American Indian Students, however, the charter schools have a mobility percentage which is double the level for district managed schools; Pacific Islanders – This group represent a very small percentage of enrollment for charter schools and for district managed schools with district managed schools having a higher mobility rate; and Two or More Races – This group represents a low percentage of school enrollment for charter and district managed schools with the district managed schools having a slightly higher mobility rate for these students than the charter schools.
EXHIBIT 4-‐4 provides information pertaining to the mobility rates by ethnic group for each charter school.
48
EXHIBIT 4-‐4 JEFFERSON COUNTY PUBLIC SCHOOLS CHARTER SCHOOLS STUDENT MOBILITY RATES BY ETHNIC GROUP 2013-‐2014 FISCAL YEAR Enrollment Categories Total Enrollment Mobility Instances Mobility Rate
CompassCompass Free Adden Mont Mont Excel Horizon brooke W/R Golden Academy Mont 127 234 359 532 344 44 7 13 28 42 34.6% 3.0% 3.6% 5.3% 12.2%
White Students 93 Mobility Instances 33 Mobility Rate 35.5% % of School Enrollment 73.2%
188 5 2.7% 80.3%
280 11 3.9% 78.0%
Black/African American 1 Mobility Instances 0 Mobility Rate 0.0% % of School Enrollment0.8%
1 0 0.0% 0.4%
2 0 0.0% 0.6%
Hispanic/Latino 30 Mobility Instances 10 Mobility Rate 33.3% % of School Enrollment 23.6%
25 0 0.0% 10.7%
45 1 2.2% 12.5%
Asian 2 Mobility Instances 0 Mobility Rate 0.0% % of School Enrollment1.6%
5 1 20.0% 2.1%
3 0 0.0% 0.8%
American Indian 0 Mobility Instances 0 Mobility Rate 0.0% % of School Enrollment0.0%
1 0 0.0% 0.4%
Pacific Islanders 0 Mobility Instances 0 Mobility Rate 0.0% % of School Enrollment0.0% Two or More Races 1 Mobility Instances 0 Mobility Rate 0.0% % of School Enrollment0.8%
Jeff Acad Elem 708 19 2.7%
Jeff Jeff Lincoln Rocky New Rocky Collegiate Woodrow District Acad Acad Charter Mtn Mont Mtn Amer Mtn Academy Two Wilson District Net of K-‐12 Sr High School Deaf Peaks PhoenixSchool Acad Colorado Roads Acad Total Total Charters 778 423 633 64 495 489 403 440 460 695 806 7,990 90,641 82,651 185 14 30 3 41 68 240 62 60 229 145 1,230 10,193 8,963 23.8% 3.3% 4.7% 4.7% 8.3% 13.9% 59.6% 14.1% 13.0% 32.9% 18.0% 15.4% 11.2% 10.8%
415 276 555 614 305 437 32 402 392 17 375 20 31 13 134 11 21 1 37 53 10 52 4.8% 11.2% 2.3% 21.8% 3.6% 4.8% 3.1% 9.2% 13.5% 58.8% 13.9% 78.0% 80.2% 78.4% 78.9% 72.1% 69.0% 50.0% 81.2% 80.2% 4.2% 85.2% 2 0 0.0% 0.4%
4 8 12 7 0 1 6 1 0.0% 12.5% 50.0% 14.3% 1.2% 1.1% 1.5% 1.7%
326 596 36 202 11.0% 33.9% 70.9% 85.8%
661 5,964 60,147 54,183 124 794 6,193 5,399 18.8% 13.3% 10.3% 10.0% 82.0% 74.6% 66.4% 65.6%
9 6 2 1 22.2% 16.7% 2.0% 0.9%
2 80 1,182 1,102 0 17 230 213 0.0% 21.3% 19.5% 19.3% 0.2% 1.0% 1.3% 1.3%
77 56 16 18 20.8% 32.1% 16.7% 8.1%
96 1,323 22,607 21,284 15 352 2,950 2,598 15.6% 26.6% 13.0% 12.2% 11.9% 16.6% 24.9% 25.8%
11 0 0.0% 2.5%
9 11 0 3 0.0% 27.3% 2.0% 1.6%
11 194 2,779 2,585 1 16 291 275 9.1% 8.2% 10.5% 10.6% 1.4% 2.4% 3.1% 3.1%
9 1 4 4 5 3 0 0 1 1 1 3 0.0% 0.0% 25.0% 25.0% 20.0% 100.0% 1.4% 1.6% 0.8% 0.8% 1.2% 0.7%
72 39 68 88 65 123 23 5 7 0 26 1 9 2 6.9% 17.9% 0.0% 29.5% 1.5% 7.3% 8.7% 13.5% 11.3% 9.6% 11.3% 15.4% 19.4% 35.9%
47 63 373 33 3 9 225 5 6.4% 14.3% 60.3% 15.2% 9.5% 12.9% 92.6% 7.5%
14 3 21.4% 0.8%
4 23 16 0 1 2 0.0% 4.3% 12.5% 0.0% 3.2% 2.1%
21 0 0.0% 5.0%
29 5 0 0 0.0% 0.0% 4.6% 7.8%
18 7 5 0 2 3 0.0% 28.6% 60.0% 3.6% 1.4% 1.2%
0 0 0.0% 0.0%
0 2 0 13 0 1 0 10 0.0% 50.0% 0.0% 76.9% 0.0% 0.6% 0.0% 1.7%
3 1 0.0% 0.7%
0 0 0 0 0.0% 0.0% 0.0% 0.0%
0 0 0.0% 0.0%
2 3 2 0 1 1 0.0% 33.3% 50.0% 0.4% 0.7% 0.5%
1 4 0 2 0.0% 50.0% 0.2% 0.6%
4 35 643 608 0 16 136 120 0.0% 45.7% 21.2% 19.7% 0.5% 0.4% 0.7% 0.7%
0 0 0.0% 0.0%
0 0 0.0% 0.0%
1 0 0.0% 0.2%
0 0 0.0% 0.0%
0 0 0 0 0.0% 0.0% 0.0% 0.0%
3 0 0.0% 0.6%
0 0 0 0 0.0% 0.0% 0.0% 0.0%
2 0 0.0% 0.5%
3 0 0 0 0.0% 0.0% 0.7% 0.0%
0 13 168 155 0 2 34 32 0.0% 15.4% 20.2% 20.6% 0.0% 0.2% 0.2% 0.2%
14 0 0.0% 6.0%
29 1 3.4% 8.1%
28 19 51 34 22 0 3 2 7 6 0.0% 15.8% 3.9% 20.6% 27.3% 5.3% 5.5% 7.2% 4.4% 5.2%
35 3 0 0 0.0% 0.0% 5.5% 4.7%
21 21 0 0 3 0 0.0% 14.3% 0.0% 4.2% 4.3% 0.0%
14 1 7.1% 3.2%
35 22 6 3 17.1% 13.6% 7.6% 3.2%
32 381 3,115 2,734 5 37 358 321 15.6% 9.7% 11.5% 11.7% 4.0% 4.8% 3.4% 3.3%
0 3 1 0 2 0 0.0% 66.7% 0.0% 0.0% 0.4% 0.1%
Source: Col ora do D epa rtment o f Educa ti on S chool Mobi l i ty R a tes b y I ns tructi ona l p rogra m 2013-‐2014
Information included in Exhibit 4-‐4 indicates the following: • • •
•
•
With the exception of New America School-‐Lakewood, all of the charter schools have a larger percentage of white students than the district managed schools; The mobility rate for white students in charter schools is approximately 3 percent higher than a similar rate for white students in district managed schools; Seven of the charter schools had mobility rates for Black/African American students that exceeded the similar rate for district managed schools (19.3 %) with the Jefferson Academy K-‐12 school (50%) and the Rocky Mountain Academy of Evergreen (100%) having very high mobility rates for this group; The mobility rate for Hispanic/Latino students in district managed schools was 12.2 percent, however, four charter schools had a very high percentage of mobility among this ethnic group; they were the Addenbrooke Classical Academy (33.3%), the Jefferson Academy K-‐12, (29.5%), New America School-‐Lakewood (60.3%), and Two Roads Academy (32.1%); Ten of the charter schools had a total of 16 American Indian students and four of these schools had a mobility rate of 50% or greater for this ethnic group; and
49
•
Seven charter schools had a mobility rate for students of Two or More Races that exceeded the average for district managed schools.
Financial Impact of Student Mobility The per pupil revenues (PPR) based on the state finance act and the Jeffco mill levy overrides are allocated to the charter schools based on the October count. If students leave a charter school after the October count date and are not replaced, the charter school will benefit with a financial gain as they will continue to receive payment for the number of students included in the October count. Five charter schools had a mobility rate in excess of the 18 percent average for all charter schools. This represents a mobility instance of 614 students Nine charter schools had a mobility rate that exceeded the overall average for district managed schools. The total number of mobility instances for the charter schools was 1,230 for the 2013-‐2014 fiscal year. Students that leave a charter school and enroll in a district managed school create a potential financial gain for the charter school as the charter school continues to receive the revenue related to the funded departing students, while the district managed schools may absorb additional unfunded students and as a result, incur increased operating costs. The financial impact to Jeffco resulting from the mobility of charter school students included in the October count is unknown, however, it appears there may be a financial gain for charter schools, especially those schools with a high mobility rate, while increasing the costs for the district managed schools.
50
ISSUE NUMBER FIVE CHARTER SCHJOOLS CAPITAL IMPROVEMENTS AND DEBT SERVICE ISSUES A cost directly incurred by Jeffco taxpayers for charter schools involves the debt service obligations for that portion of the resources provided by Jeffco to the charter schools for projects included in the 2004 and 2012 bond construction programs. The charter schools receive resources for capital improvements, but are not required to pay for any portion of the related debt service obligations (principal and interest on the bonds); these are an obligation of the Jeffco school district. EXHIBIT 5-‐1 provides a summary of the charter school capital improvement budgets for both bond programs.
EXHIBIT 5-‐1 JEFFERSON COUNTY PUBLIC SCHOOL DISTRICT SUMMARY OF CHARTER SCHOOL BUDGETS 2004 AND 2012 CHARTER SCHOOL BOND PROGRM EXPENDITURES
Charter School Collegiate Academy Compass Montessori Golden Compass Montessori W/R Excel Academy Free Horizon Montessori Jefferson Academy Lincoln Academy Montessori Peaks Mountain Phoenix Academy Rocky Mountain Deaf School Rocky Mountain Academy Woodrow Wilson Academy Total
2004 Bond Program $ 1,902,000 1,739,100 -‐ 661,800 508,100 2,773,100 1,479,100 974,900 -‐ 130,000 667,700 1,229,000 $ 12,064,800
2012 Bond Program $ 1,671,133 763,900 102,600 91,200 1,565,746 535,800 1,041,200 323,300 286,900 -‐ 239,000 870,884 $ 7,491,663
Total $ 3,573,133 2,503,000 102,600 753,000 2,073,846 3,308,900 2,520,300 1,298,200 286,900 130,000 906,700 2,099,884 $ 19,556,463
Source: 2005-‐2010 Ca pi ta l I mprovement Progra m Project Li s t Voter Approved Project Li s t a nd 2012 Cons tructi on S umma ry p rovi ded b y the Cons tructi on Ma na gement D epa rtment.
EXHIBIT 5-‐1 identifies only the principal amounts for the 2004 and 2012 charter schools construction programs; it does not include the interest costs required for repayment of the bonded debt. The principal amount related to the construction projects and the related interest is paid over the 20 year repayment period of the bonds. The debt service payments for the 2012 bond program are easily identified from the repayment schedule included in the 2013-‐2014 Jeffco budget; a similar computation for the 2004 bond program is difficult to determine because the original repayment schedule is not available from public information provided on the Jeffco web site and because it is probable some of the original bonds have been refunded since the original issuance and replaced by other securities. EXHIBIT 5-‐2 provides an estimate of the annual 20 year cost for both the principal and interest obligated by the 2012 bond construction program. 51
Because debt service payments for bonded indebtedness are paid over a 20 year period with the actual annual amounts for both principal and interest varying from year to year depending on the timing of the principal payments, the actual amount to be paid in a specific year will vary, however, EXHIBIT 5-‐2 reflects the annual average debt service obligation for the charter schools and the Jeffco managed construction projects based on the percentage of the principal amount to be expended for the charter schools capital projects associated with the 2012 bond construction program.
EXHIBIT 5-‐2 CALCULATION OF DEBT SERVICE OBLIGATION $99,000,000 GENERAL OBLIGATION BONDS ISSUED IN 2012 CHARTER SCHOOLS AND JEFFERSON COUNTY SCHOOL DISTRICT Debt Service Components Principal Interest Total Debt Service Average Annual Debt Service for 20 Year Obligation
Debt Service 2013-‐2033 $ 99,000,000 58,152,538 $ 157,152,538
Charter Amount $ 7,491,000 4,400,209 $ 11,891,209
District Amount $ 91,509,000 53,752,329 $ 145,261,329
$ 7,857,627
$ 594,560
$ 7,263,066
Percentage of Total Charter Jeffco 7.57% 92.43% 7.57% 92.43% 7.57% 92.43%
7.57%
92.43%
Source: Jefferson County School D istrict, No. R-‐1 2013-‐2014 Budget document, page 241.
Similar information pertaining to the 2004 bond program is included in EXHIBIT 5-‐3.
EXHIBIT 5-‐3 CALCULATION OF 20 YEAR DEBT SERVICE OBLIGATION $323,800,000 GENERAL OBLIGATION BONDS ISSUED IN 2005 CHARTER SCHOOLS AND JEFFERSON COUNTY SCHOOL DISTRICT Debt Service Components Principal Interest Total Debt Service Average Annual Debt Service for 20 Year Obligation
Debt Service 2013-‐2033 $ 323,800,000 190,199,796 $ 513,999,796
Charter Amount $ 12,064,800 7,086,851 $ 19,151,651
District Amount $ 311,735,200 183,112,945 $ 494,848,145
$ 25,699,990
$ 957,583
$ 24,742,407
Percentage of Total Charter Jeffco 3.73% 96.27% 3.73% 96.27% 3.73% 96.27%
3.73%
96.27%
Source: Project Li s t 2005-‐2010 Ca pi ta l I mprovement Progra m a nd ca l cul a ti on o f I nteres t b a s ed o n the ra te i ncl uded on EXHIBIT 5-‐2.
Because of refunding activities, the exact amount of the debt service obligation for the 2004 bond program cannot be determined from the available public information, thus, an estimate for the 2004 52
program has been determined using the relationship between the principal and interest for the 2012 bond program as the basis for the 2004 calculation. When the amounts for both the 2004 and 2012 debt service obligations are combined, it is estimated that the annual debt service cost incurred by Jeffco for capital improvements made to charter schools is $1,552,143. Because the revenues for the Jeffco Debt Service Fund are financed entirely by property taxes, this amount is being paid by all Jeffco taxpayers. This information is summarized in EXHIBIT 5-‐4. EXHIBIT 5-‐4 ESTIMATED ANNUAL DEBT SSERVICE COST CHARTER SCHOOLS AND DISRICT PRINCIPAL AND INTEREST
Bond Program 2012 Program 2004 Program Annual Cost
Charter Schools $ 594,560 957,583 $ 1,552,143
District $ 7,263,066 24,742,407 $ 32,005,473
Total $ 7,857,626 25,699,990 $ 33,557,616
Source: Exhi bi ts 5-‐2 a nd 5-‐3.
These exhibits may not be precise as they are based on budget amounts and not actual expenditures for each project. Information pertaining to the actual project costs is not available in materials currently accessible to the public; however, the Board of Education approved an addition/renovation contract for the Montessori Peaks Charter School in the amount of $1,676,255 on May 31, 2007. The budget amount from the Jeffco project list for the 2005-‐2010 capital programs for the Montessori Peaks Charter School was $974,900. This represents an increase of $701,355 in the cost of this charter school project from the original budget identified in the 2005 capital improvement program, a 42 percent increase in the cost of this project. If there were other similar increases of this nature, the overall cost for the debt service associated with charter school capital improvements will be greater than the amount indicated in EXHIBIT 5-‐4. There have been two situations referenced in the audited Basic Financial Statements of four charter schools pertaining to the use of bond proceeds. These involve: Compass Montessori Charter School 2004 bond program The two Compass Montessori programs have two facilities with a single Executive Committee. The Golden campus provided a loan of the 2004 bond resources to the Wheat Ridge campus to reduce existing outstanding debt for the Wheat Ridge campus. Rocky Mountain Academy of Evergreen and Excel Academy Transaction A somewhat similar transaction occurred between the Excel Academy and the Rocky Mountain Academy of Evergreen. In this situation the Excel Academy loaned unneeded bond proceeds to the Rocky Mountain Academy of Evergreen. 53
These situations are discussed in the Notes to the Basic Financial Statements for the four charter schools, however, the financial impact of the transactions are not part of the Basic Financial Statements for the charter schools as the loans have no remedy if they are unpaid. These transactions are discussed in more detail with Issue Number Six – Perceptions of Financial Transparency and Charter School Audits.
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ISSUE NUMBER SIX PERCEPTIONS OF FINANCIAL TRANSPARANCY AND CHARTER SCHOOL AUDITS The Colorado Department of Education has established standards for charter schools which “require each Charter School to conduct an annual financial audit by an independent auditor to be selected by the Charter School.” This standard seems to imply the performance of an audit will guarantee financial transparency for charter schools. This is not always the case as in some cases the disclosure is not provided and in other cases disclosure is provided, but in the notes to the financial statements that can be confusing and may often be overlooked by readers of these documents. Independent audits are performed by certified public accountants and the audits must be conducted in accordance with Generally Accepted Audit Standards (GAAS) and the financial reports are to be in compliance with Generally Accepted Accounting Principles (GAAP) and must be submitted to CDE, the Office of the State Auditor, and the authorizing district (Jeffco). All of the audited Financial Reports for Jeffco charter schools are entitled “Basic Financial Statements.” The report of an independent auditor is to express an opinion on the financial statements and to obtain reasonable assurance they are free from any material misstatements. A “clean” audit opinion will indicate that the financial statements present fairly, in all material aspects, the financial position of the entity being audited. All of the audits for charter schools in Jefferson County are conducted by a single independent audit firm, John Cutler & Associates. The audited financial statements for all of the charter schools in Jeffco include only the “Basic Financial Statements” and the accompanying Notes to the Financial Statements. The financial statements for all governmental audits include the following statement: “The accompanying notes are an integral part of the financial statements.” The Government Finance Officers Association (GFOA) has prepared a document entitled Governmental Accounting, Auditing, and Financial Reporting (GAAFR) which provides detailed information pertaining to the unique aspects of governmental accounting. This publication indicates that: ” the basic financial statements represent the minimum information that must be included within a financial report of a state or local government for an independent auditor to issue a ‘clean’ audit opinion, assuring audit users that a government has complied with GAAP.” GAAFR states: “The objective of a financial audit, as defined, is to provide users of financial reports with reasonable assurance from an independent source that the reports are reliable.” The audits referenced in GAAFR involve specific financial statements and Required Supplementary Information (RSI). One of the requirements for supplemental information is the “Management’s Discussion and Analysis” (MD&A). GAAFR states that: “This analysis should provide a narrative
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introduction and overview that users need to interpret the basic financial statements. “ The MD&A is a statement from the management of the school and is not subjected to the audit process. GAAFR notes: “Although RSI by definition need not be audited, auditors are required to perform certain limited procedures in regard to RSI. Because RSI is not part of the basic financial statements, its absence does not affect the auditor’s opinion on the fair presentation of the basic financial statements.” One observation contained in GAAFR notes: “Many potential users of financial statements are unaware of the fact that the financial statements are the representations of management rather than of the independent auditors.” An additional responsibility of the auditor is to provide a “Management Letter” if there are any reportable conditions pertaining to internal control or compliance. It does not appear that any of the audits for Jeffco charter schools have been accompanied by a management letter. The following are observations pertaining to situations involving items that may not provide adequate disclosure, items excluded from the MD&A, and notes that can easily be overlooked in the audited Basic Financial Statements, the MD&A and the Notes to the Financial Statements for some Jeffco charter schools as of June 30, 2014: 1. Compass Montessori Charter Schools – Golden and Wheat Ridge campuses An item pertaining to the two Compass Montessori Charter Schools involves a related party transaction. A related party transaction occurs when the transaction is not achieved at “arm’s length,” but comprises a situation where the transaction occurs with two or more party’s that are not independent. The GAAFR notes the following regarding Related Party Transactions: “While there is nothing inherently undesirable about related party transactions, they raise potential concerns regarding 1) the reasonability of the terms of the arrangement, and 2) the eventual collectability of related receivables. Accordingly, the notes to the financial statements should disclose the terms of material related-‐party transactions, as well as the balances of any related receivables if not separately reported on the face of the basic financial statements.” The Compass Montessori program has two schools (Golden and Wheat Ridge) operating with a single Executive Committee with each identified by Jeffco as a separate charter school. Information provided by the Jeffco Department of Construction for the 2004 bond program identified $763,900 for general upgrades to include a partial renovation to the HVAC system, exterior door and window replacement and exterior envelope insulation installation for the Golden school. An amount of $102,600 was to be provided for exterior door replacement and exterior insulation and gutter installation for the Wheat Ridge school.
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As referenced in the materials for Issue Five, Charter Schools Capital Improvements and Debt Service Issues, Note 10 in the Compass Montessori – Golden Campus audited Basic Financial Statements as of June 30, 2014 states: “Due to the fact that the School’s portion of the 3B bond funds was not adequate to pay off their existing debt and transfer ownership of their facilities to Jefferson County School District, as required by 3B, the School could not currently utilize their portion of the 3B proceeds. To make the proceeds available for the benefit of the School, the Executive Committee of the School and the Compass Montessori-‐Wheat Ridge Campus (same committee) passed a resolution whereby the Wheat Ridge School would receive the Schools 3B portion of bond funds to pay off the Wheat Ridge School’s debt. In return, the Wheat Ridge School agreed to repay the School in quarterly installments, over a ten year period, in the amount of $96,846 per year.” “The repayment is subject to annual appropriation by the Wheat Ridge School and is nontransferable. In addition, the school does not have a written contract with the Wheat Ridge School for repayment of the funds, and there are no remedies should repayment not take place. As a result, the receivable from the Wheat Ridge School has not been recorded in the financial statements. Instead, the payments will be recorded as revenue when received. During the fiscal year ended June 30, 2014, the Wheat Ridge School made payments amounting to $96,846 that has been recorded by the school as other revenue.” This note and a related Note 9 in the audited Basic Financial Statements for the Compass Montessori Wheat Ridge Charter School as of June 30, 2014 indicate that bond proceeds to be used for specific capital improvements at the Golden school were utilized to repay debt for previous capital obligations incurred by the Wheat Ridge school. This results in a double payment of a portion of the interest based on the following: •
•
Payment to retire the existing debt incurred by the Compass Montessori School Wheat Ridge campus would include a payment for the outstanding interest at the time of the retirement of the debt; and Jeffco will be continuing to pay interest on the principal amount associated with the Compass Montessori debt retirement through 2024 when the 2004 bonds are retired.
Although these notes seem to provide full disclosure of this transaction, this does not appear to be the case for the following reasons: • • •
The full amount of this transaction is not identified, although it can be assumed to be $968,460 based on the ten year repayment amount; The date of this agreement is not provided, thus, the total remaining receivable for the Golden school and the payable for the Wheat Ridge school is unknown; The lack of a transaction date also fails to identify the current outstanding receivable/payable for the two schools;
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• •
•
Because no interest rate is identified, it is assumed this is intended to be an interest-‐free transaction, but the notes fail to provide this information; The lack of a formal agreement between the two schools and the fact there is no remedy for non-‐payment, excludes the requirement for the financial impact of this transaction to be recorded on the financial statements of the two Compass Montessori Schools through 2024 resulting in an understatement of assets for the Golden School and understatement of the liabilities for the Wheat Ridge school; and The long-‐term obligation for one school and the long term receivable for the other school is not discussed in the MD&A section of the audited Basic Financial Statements for either school.
Although the audit firm has opined that the financial statements “present fairly, in all material respects, the respective financial positon of governmental activities, business-‐type activities, and each major fund” for the two Compass Montessori Charter Schools, the notes to the financial statements do not appear to meet the disclosure requirements for this type of a transaction and the lack of information pertaining to this transaction in the MD&A results in a failure of full financial disclosure for these two charter schools 2. Excel Academy and Rocky Mountain Academy of Evergreen (RMAE) As referenced in the materials for Issue Five, Charter Schools Capital Improvements and Debt Service Issues, Note 10 in the Excel Academy audited Basic Financial Statements as of June 30, 2014 states: “Due to the fact that the Academy did not have any capital needs related to its facilities or grounds, the Academy could not currently utilize their portion of the proceeds. In order to make funds available for the benefit of the Academy, the Executive Boards of the Academy and the Rocky Mountain Academy of Evergreen (RMAE) entered into a letter of agreement which stated the RMAE would receive the Academy’s 3B portion of bond funds in order to acquire land and build a new facility. In return, the RMAE agreed to repay the school in quarterly installments, over a 10 year period.” “This agreement includes a stipulation of 3% APR interest to be calculated on the outstanding principal balance. The accrued interest on years 1-‐10 of the note will be allocated and paid over years 11-‐15 per the agreement along with years 11-‐15 calculated interest and required principal payments as well. Under the original agreement, a balloon payment of the unpaid principal and interest balance was due at the end of fiscal year 2014-‐2015. In March of 2013, the Academy and RMAE amended the agreement to extend the repayment terms an additional five years. Under the proposed agreement, RMAE will make payments on the remaining unpaid interest from years 1-‐10 on the note across years 11-‐15 and principal balance through 2020.” “The repayment is subject to annual appropriation by RMAE and is nontransferable. In addition, there are no remedies should the repayment not take place. As a result, the receivable from RMAE has not been recorded in the financial statements. Instead, the payments will be recorded as revenue when received. During the fiscal year ended June 30, 2014, the RMAE made payments amounting to $60,000 that has been recorded by the Academy as other revenue.” 58
Note 7 in the Rocky Mountain Academy of Evergreen audited Basic Financial Statements as of June 30, 2014 is similar to the note in the Excel document. The notes in these two reports fail to mention the amounts involved and it appears the agreement had to be amended because RMAE failed to meet its financial obligation based on the original agreement. The circumstance referencing the Excel Academy and RMAE agreement excludes a significant amount of detail regarding this transaction: • • • •
•
•
The timing of the transaction is not disclosed; when was the letter agreement entered into? The fiscal years included in years 1-‐10 and 11-‐15 are not identified; The full amount of the transaction is not provided; It is unknown if the $60,000 payment received by Excel Academy in the 2013-‐2014 fiscal year represents the total payment due for the 2013-‐2014 fiscal year; The fact that this agreement has no remedies if payment does not take place and because the payment is subject to annual appropriation, this transaction is not recorded on the financial statements of the two Schools resulting in an understatement of assets for Excel Academy and an understatement of the liabilities for RMAE; RMAE has established a Building Corporation to handle long-‐term financial transactions. In addition to the obligation to Excel Academy, RMAE also has a 30 year lease obligation with the Building Corporation; and This transaction is not addressed in the MD&A portion of the June 30, 2014 Basic Financial Statements for either the Excel or RMAE charter schools.
As of June 30, 2014, the long-‐term debt of the RMAE lease agreement with the Building Corporation has interest payments that exceed the principal amount over the remaining life of the lease (through 2041). The total debt service to be paid through 2041 is $10,771,102, with $5,200,000 for principal repayment and $5,571,102 in interest. An additional issue involving Excel Academy is included in Note 6 of the June 30, 2014 Basic Financial Statements which states: On December, 2003, the Academy entered into a note payable with the District in the amount of $236,460 for the purchase of land. The note accrues interest at a rate of 3%. Principal in the amount of $118,230 and half of the accrued interest is due in December 2037 with the remaining principal balance of $118,230 and accrued interest due December 2038. 3, New America School – Lakewood (NASL) This charter school is part of the non-‐profit New America Charter Management Organization (CMO), with schools in Colorado, New Mexico, Arizona, and Nevada. The majority of the charter schools in Jeffco provide a copy of the audited Basic Financial Statements as a component of the school web site. The school web site for NASL provides NAS system-‐wide information, but there are no materials pertaining to the fiscal aspect of the individual NAS schools. When seeking financial information for this 59
school, the web site directs the reader to the Jeffco schools ” Financial Transparency” web page or the CDE “School View. “ Neither site provides any audited financial information pertaining to this charter school. A copy of the June 30, 2014 audited Basic Financial Statements was not accessible on the NAS web site, however, the most recent audited Basic Financial Statements for NAS-‐Lakewood for the year ended June 30, 2015 were obtained with difficulty; this information was not available on the school web page. Note 7 of the June 30, 2015 audited Basic Financial Statements states: “New America School –Lakewood is operated by New America Schools (“NAS”), a Colorado non-‐ profit corporation. NAS provides certain legal, management, accounting, and advertising services to the School. The School has agreed to pay management fees to NAS for these services at a rate of 12.5% of per pupil revenues. For the year ended June 30, 2015, the school paid management fees to NAS under the terms of this agreement in the amount of $323,726.” “On November 2011, the School entered into a sublease with NAS Facilities Organization, LLC (NASFCO) for a new facility which the school occupied in June 2012. Per the agreement, the School is liable for monthly rent expense ranging from $22,209 to $27,385. This lease will be effective from July 1, 2012 through June 30, 2018 and the future minimum lease payments are as follows:” The lease payments are identified in Note 7 as $328,620 per year through 2018. The MD&A indicates NASL expended $381,439 in rent payments to NASFCO for the year ended June 30, 2015. What is not referenced in any of the materials is the method of allocation for Instruction and Supporting expenditures. According to the Statement of Activities for the Year Ended June 30, 2015, NAS expended $598,630 for instruction and $1,711,661 (net of grants and capital outlay) for supportive services. The amount for Supporting Activities indicates approximately 74 percent of the total NASL expenditures are being used to fund support services. Either NASL is spending an excessive amount of resources for support services, of which approximately $700,000 is paid to the NAS organization, or the method of accounting for instructional and support services differs from the approach used by other charter schools which seem to expend resources in the range of 45 to 55 percent for support services. This situation may be indicative of an inconsistency in the manner of accounting for instructional and support services among the various charter schools. 4. Addenbrooke Classical Academy Note 2 of the June 30, 2014 audited Basic Financial Statements states the following: • •
Legal Compliance – “The actual expenditures of the General Fund exceeded the budgeted amount by $34,904. This may be a violation of State stature.” Accountability – “The Academy’s General Fund had a negative fund balance of $26,427 as of June 30, 2014. This deficit is expected to be eliminated in future years by increased revenues and reduction of some start up expenditures.”
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The MD&A discloses the deficit position of the General Fund, but fails to mention the over expenditure of the General Fund budget. 5. Collegiate Academy Note 2 of the June 30, 2014 audited Basic Financial Statements for Collegiate Academy states: “The Academy also had a fund balance deficit in the General Fund of $119,797. This deficit is expected to be reduced by increasing revenue and cutting expenditures in the coming years.” Note 4 states : ” During the year ended June 30, 2014, the District paid for and contributed assets in the amount of $314,930 to the Academy. This contribution has been reported as a Capital Transfer from the District on the Statement of Activities.” Note 9 states: “In December 2013, the Academy entered into a short-‐term loan arrangement with the District to meet its budgetary requirements for the school year. This loan arrangement operates like a line of credit with a maximum amount of $200,000. The agreement is in effect until June 30, 2014. At June 30, 2014, the Academy owed the District $75,496 under this agreement. “ This obligation is identified as a liability on the Collegiate Academy balance sheet, however, there is no reference to an interest rate for this line of credit, thus, it is assumed to be an interest-‐free loan. The contents of Note 9 are inconsistent with information contained in the MD&A for Collegiate Academy which states: “The school approached the Jefferson County Board of Education on December 10, 2013 requesting a $400,000 line of credit to be repaid over a period of five years. After reviewing the school’s strategic plan, marketing plan, and financial plan, the Board of Education approved a loan not to exceed $400,000 on January 6, 2014. The line of credit is to be repaid in full by June, 30, 2018.” The above is followed by a discussion of the situations causing shortfalls and the manner in which they are to be addressed with a final comment as follows: “Consequently, the School substantially reduced the projected deficit of $255,000 and ended the fiscal year borrowing approximately $75,000 from the approved $400,000 district line of credit to meet the statutory TABOR reserve requirement. Management continues to implement measures to eliminate the negative fund balance in the coming year.” There is a major inconsistency between information contained in Note 9 and the unaudited MD&A for Collegiate Academy. 6. Montessori Peaks Charter School Note 2 of the June 30, 2014 audited Basic Financial Statements; Stewardship, Compliance and Accountability states: “At June 30, 2014, actual expenditures in the General Fund exceeded budgeted amounts by $46,566. This may be a violation of state statute.” 61
The over expenditure of the budget is not noted in the MD&A. 7. Mountain Phoenix Community School The Notes included in the June 30, 2014 audited Basic Financial Staments for this school include the following: Note 2: Stewardship, Compliance and Accountability: Legal Compliance • “The actual expenditures of the General Fund exceeded the budgeted amounts by $12,736. This may be a violation of State statute.” Accountability • “As of June 30, 2014 the School had a government-‐wide net position deficit of $360,170. This deficit was created as the Corporation received a loan from a bond issuance to purchase the School’s current facility and to construct its facility. The payment of the debt principal is not scheduled to begin until fiscal year 2015.” • “ As of June 30, 2014, the School reported a loss of $802,170 resulting in a negative fund balance of $156,668. During 2014, the District authorized that the school may have up to $250,000 negative pooled cash position, which will be reimbursed within the next five years.” Note 5: Long-‐Term Debt includes the following information: 2012 Revenue Bonds The schedule of future debt service requirements for the Mountain Phoenix Community School are as follows: Debt Service Obligation -‐ 2015 through 2043 Principal Interest Total
$ 6,370,000 8,508,850 $14,878,850
Based on this payment schedule, MPCS will be paying 33 percent more for interest than is due for the principal amount of the bonded debt. Note 5 -‐ Line of Credit •
“In March 2014, the School entered into a short-‐term loan arrangement with the District to meet its budgetary requirements for the school year. This loan arrangement is in effect until June 30, 2019. As of June 30, 2014, the School owed the District $96,908 under this agreement.”
The note provides no reference to an interest rate, thus, it must be assumed the loan is an interest free transaction. 62
The MD&A for this school references the General Fund negative fund balance, the over expenditure of the budget and the loan from the District. Regarding the long-‐term lease payments, the MD&A states: “MPCS entered into a lease agreement with the MPCS Building Corporation during Fiscal Year 2013 for use of the school facility. The bonds under which the lease was based were issued in October 2012. Under the terms of the new agreement, MPCS will make monthly payments ranging from $28,043 to $44,138, through September 2042.”
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ISSUE NUMBER SEVEN CHARTER SCHOOL STUDENT PERFORMANCE A great deal of information pertaining to student performance of charter schools nationally and in Colorado is available. There are two elements associated with student performance that tend to be overlooked; they are the issue of parent involvement and the identification of the starting point (test scores prior to attending a charter school) for students who have enrolled in charter schools from district managed schools. Parent Involvement There have been numerous research papers over the years that reference the need for parental involvement for students to be successful. The Michigan Department of Education developed a paper in 2001 entitled: What Research says about parent involvement in children’s education In Relation to Academic Achievement. It notes that 86% of the general public believes that support from parents is the most important way to improve schools. This report goes on to state that: • • •
“Family participation in education was twice as predictive of students’ academic success as family socioeconomic status;” “The more intensely parents are involved, the more beneficial the achievement effects;” and “The more parents participate in schooling, in a sustained way, at every level – in advocacy, decision-‐making and oversight roles and as boosters, as volunteers and para-‐professionals, and as home teachers – the better the student achievement.”
Most charter schools in Jeffco specifically state they “require” parental involvement. Some examples include: •
•
Collegiate Academy – “At Collegiate Academy of Colorado, all parents (or students in lieu of parents) are required to volunteer a total of 40 hours. Regardless of the size of the family, the requirement is 40 hours. Parents can also pay $10 for every hour of volunteer time, or simply pay $400 in lieu of their physical volunteering.” Excel Academy -‐ “Parents serve on all standing committees and task forces. Parents also participate through volunteering to assist in the operation of the school (a minimum of 80 hours per school year per two-‐parent family and 40 hours per school year per single-‐parent family). With permission from the Executive Director, parents may contribute $15/hour in lieu of their required hours, or they may have a relative contribute hours.”
•
Mountain Phoenix Community School – “We ask that parents contribute a minimum of 4 hours per month to the school, or a total of 40 hours per year. In lieu of the minimum 40
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•
•
volunteer hours per year, parents whose busy schedules do not allow such a donation of time are asked to donate $400 per year to meet this commitment.” Rocky Mountain Academy of Evergreen – There is a parent contract which states: “I will actively participate in RMAE by volunteering my time. This may include participation on Board meetings, committees, fundraisers, classroom projects, field trips, etc. I understand that a 60 hour minimum for volunteering is required by all families.” Woodrow Wilson Academy – “By enrolling your child at Woodrow Wilson Academy, you have chosen to participate in a unique educational experience that actively involves both you and your child. Our school was established on the belief that parents are an important element in a child’s education and that parent involvement is necessary for the success of Woodrow Wilson Academy. A copy of the Parent Participation Agreement is found in the registration packet that is e-‐mailed to all parents at the beginning of the school year. Woodrow Wilson Academy asks that each family, if possible, volunteers 20 hours per year.”
Many charter schools also have separate foundations managed by parents to support fundraising activities for the schools. If the Michigan paper is accurate, one reason for the apparent success of charter school students in Jeffco can be attributed to the parental involvement requirement. It should also be noted, that any parent undertaking the effort to enroll a student in a charter school, will normally be, by definition, an involved parent. The dilemma faced by district managed schools is they can encourage parental involvement, but cannot require it, nor can they require parents to provide payment to the school in lieu of volunteering. Performance of Students Attending Charter Schools in Jeffco The CDE report, The State of Charter Schools identifies the measurements for student testing as follows: • •
Proficiency – Proficiency rates describe the percent of students scoring at or above specific level on the Transitional Colorado Assessment Program (TCAP). Median Growth Percentile (MGP) – Measures the state uses to determine the average growth on students in a school. Students receive individual growth percentiles which are then aggregated at the school level.
School test results are based on the students enrolled in the schools at the time of the tests. There is no reference to the level of achievement of students prior to enrollment in a charter school. For example, students enrolled in a charter school could have had proficient or better scores in district managed schools and when enrolled in a charter school there is the probability the students will continue to achieve at this or a higher level. Meanwhile, the district managed schools where these students previously attended may have reduced scores because of the loss of higher performing students. 65
The CDE report goes on to provide a great deal of student performance information to include comparisons of charter and non-‐charter schools. The report states: “The Colorado Charter Schools Act specifically directs that this report “shall compare the performance of charter school pupils with the performance of ethnically and economically comparable groups of pupils in other public schools who are enrolled in academically comparable courses.” In Part Five of the CDE Report, The State of Charter Schools in Colorado, there is a discussion regarding the method of gathering data for the performance analysis. This references the statistical significance of the information in the report and notes that CDE “has not yet identified a sound statistical method to determine significance when making these comparisons.” Until information is available to identify the test scores of students prior to enrollment in a charter school, it will be difficult to make reasonable comparisons of the impact on student performance between district managed and charter schools. With the myriad reports generated by CDE and others, there appears to be no process to determine if a school is being effective or if it is a situation where the charter schools are benefitting by attracting the higher performing students and the most involved parents.
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ISSUE NUMBER EIGHT ISSUES NOT ADDRESSED AND FURTHER QUESTIONS There are a number of other charter school-‐related issues not addressed in this review to include: •
•
Cash Management – The Jeffco District remits 25 percent of the Per Pupil Revenue (PPR) to the charter schools on a quarterly basis with the first payment commencing on July first of the fiscal year and the final payment occurring on April first. Jeffco receives the state PPR payments on a monthly basis and 60 percent of the property taxes are received in May/June, the final two months of the fiscal year. The June amount includes approximately $9 million of property tax revenues received in July and recorded as a receivable on the June 30th Comprehensive Annual Financial Reports. The charter schools receive their portion of the PPR well in advance of the receipt of these revenues by Jeffco, resulting in an unknown amount of lost interest income and a possible cash flow problem for the district. Charter School Budget Formats – All of the public budget materials provided by the charter schools are in a basic line item format. There is no identification of the costs for various programs such as school administration, special education, preschool, gifted and talented, etc. This area has not been reviewed, and it appears the current budgets and use of account codes are technically consistent with the minimum requirements prescribed in the Financial Policies and Procedures Manual (FPP) prepared by CDE. They do not, however, present a comprehensive picture of the services and activities of each charter school. The FPP provides the following comments regarding the importance of the budget process and document: “The purpose of a budget is to provide a plan of financial operation embodying an estimate of proposed expenditures for a given period and purpose and the proposed means of financing that plan. To achieve this basic purpose, a comprehensive budget system must be integrated with the financial system.” ”Detailed budget planning allows a district to reflect educational values and needs. The structure and format provided by a well designed budget promotes rational decision-‐ making regarding the importance of various school district services.” It should be noted that the FPP uses the word “district,” but the FPP indicates this term is meant to be used for all types of educational entities, to include charter schools.
•
Impact of Preschool and Full Day Kindergarten Fees – The fees charged by charter schools for the preschool and full day kindergarten programs are established by each school. In some cases, these fees exceed the fees established for similar district managed programs. Because preschool and full day kindergarten revenues and expenditures are comingled with the overall charter school General Fund programs, it is unknown if these programs are being used to
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•
•
•
enhance the financial position of the school or have been established to offset the cost of the programs. Accounting for Resources Generated by Charter School Foundations – Most charter schools have a separate foundation responsible for major fund raising activities. It is unknown if the resources generated by these organizations are provided to the charter schools as donations, thus, being reported as revenues on the financial records of the school, or if the foundations purchase goods or services directly. If the revenues are managed directly by the foundations, the overall revenues available to the charter school will be understated. Costs incurred by Jeffco Associated with Charter Schools – As noted in the Introduction, this review used only materials currently accessible to the public. To fully understand the charter school-‐related costs to the District will require an in-‐depth review of all of the costs, to include some items identified in this review as well as determining all of the direct and indirect costs incurred by Jeffco associated with the charter schools authorized by the Board of Education. Board of Education Policy for the Charter Application Review Committee (CARC) -‐ There appears to be no Board of Education Policy addressing the role or activities of the Charter Application Review Committee (CARC). The activities of this committee have not been part of this review, but the fact that the committee exists and is fulfilling an active role, would seem to indicate a need for a Board policy identifying the committee’s role as well as providing direction regarding the process used to review charter applications and make recommendations to the Board of Education. This committee exists; however, it is not identified on the district web page that lists and discusses the various citizen committees.
There are also a number of questions pertaining to the Jeffco charter schools as follows: •
• • • • •
The District has established a separate Charter School Office with two staff members. These positions appear to be included in the budget for the Chief Academic Office. What is the total budget for the Charter School Office? What are the numbers of nonresident students in each charter school and what are the home districts for these students? Why was the number of nonresident charter school students removed as a separate category on the 2014-‐2015 Choice Enrollment Rates Report? How many students, if any, now enrolled in charter schools were previously enrolled in private schools? If this has occurred, where are these students currently enrolled? How many students from each charter school leave the school after the October 1 count has been completed? What happens to students who leave charter schools? Do they return to their neighborhood school in Jeffco? If so, what schools did they leave and what schools received these students?
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There are also a number of issues involving support services for charter schools provided by the State of Colorado; the following is a list of some of charter school support activities established by CDE: • •
•
• • •
•
A section has been established in the Innovation, Choice and Engagement Division which supports charter schools; the staffing level and related costs for this section are unknown; CDE has prepared two publications/studies pertaining to charter schools: o The Charter School Handbook: A Guide for Starting and Operating a Charter School; and o Charter School Leadership in Colorado. CDE Materials available to support charter schools include the following: o Charter School Support Initiative (CSSI) o Capital Construction o Charter Schools and Special Education o Revised Administrative Policy on Charter Schools o Charter Schools Guidebook o Charter School Training Modules; and o Policy Guidance Charter Schools and CORA and Open Meetings Law. There is a Colorado Charter Schools Program (CCSP) grants program; The Colorado Educational and Cultural Facilities Authority has been authorized to issue bonds for charter schools; Two programs, the Moral Obligation and the Intercept Programs involve the issuance of bonds for charter school where the State Treasurer is obligated to make bond payments in case of default by a charter school; and A number of privately funded charter school organizations such as the Colorado League of Charter Schools, have been established.
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ATTACHMENT A Materials Pertaining to Doral Inc. and Academica Organizations Involved with Doral Academy of Colorado Charter School Application •
• •
November 2006 Investigation Pertaining to Academica and Various Charter Schools Associated with Doral Inc. December 13, 2011 Article from the Miami Herald December 2013 Audit of Questioned Financial Transactions of Doral Academy Charter High School
•
Other Issues Raised by The Office of Management and Compliance Audits o July 2014 Re: Transfers/Advances of $7.4 million by Four Mater Academy Schools tyo Mater Academy Inc. o September 2014 – Follow-‐up on ABAC meeting of May 13, 2014, Agenda Item 9.A
•
League of Women Voters Education Issues Publications o January 30, 2015 – Better to light one candle than to curse the darkness o April 12, 2015 – Charter Schools: Climate of Corruption? o July 22, 2015 – For Profit Charters: Whose Interest is Being Served?
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Investigation of Allegations of Impropriety – Mater Academy Charter School(s) and Academica Corporation Excerpts from November, 2006 Investigation of Allegations of Impropriety – Mater Academy Charter School(s) and Academica Corporation prepared by the Miami-‐Dade Public Schools Office of Management and Compliance Audits (OMCA). This report contains over 90 pages of materials and can be located on the internet at www.dadeschools.net , going to “Academica Audits” on the internet and clicking on Investigation of Allegations of Impropriety. Paragraph two of the introductory letter states: “This investigation resulted from an allegation that senior Mater Academy personnel and the schools’ management company engaged in illegal acts and unethical business practices. Our investigation disclosed no indications of fraud or abuse by staff of the schools; however, we did find questionable practices, which suggest that the Board and senior management represented by Academica did not adequately fulfill their fiduciary duties to the charter schools they represent. During our investigation, we found undisclosed related party transaction for the capital outlay program of the school(s). This resulted from weak corporate governance. Past and present officers and board members placed in major decision making roles were employed by and/or served on the boards of other Academica controlled schools and had direct ownership in the management company and other undisclosed interests in the for profit companies established to provide financing and lease the facility back to the school(s).” Paragraph three of the letter goes on to note: “Specifically, a number of members of senior management and/or their immediate family served simultaneously as officers and directors for companies doing business with Mater Academy. While serving in these multiple capacities, certain individuals failed to adequately advise the board of Mater Academy, Inc. regarding the school’s right to purchase the property they occupied. Instead, these individuals initiated the purchase of the facility by School Development HG II LLC, a for-‐profit corporation owned by an offshore corporation they established for that purpose. While denying any direct or indirect benefit, they have refused to disclose the individuals profiting from these questionable transactions. We estimate the school is paying $1.3 million per year in excessive facility costs, which it might otherwise have a permanent interest in.” The Findings of the report are extensive and the following information provides a glimpse of the types of issues identified in the audit. Questionable related party transactions involving numerous entities as follows: •
For Profit entities owned by Board members of Mater Academy , Inc., a Not-‐for-‐Profit organization;
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Academica Corporation – A for-‐Profit Charter School Management Company which has a contract with Mater Academy Inc. to manage all of its schools for a fee of $450 per student per year totaling $1.5 million for school year 2015; School Development HG II, LLC, a for-‐Profit entity which leased a facility to Mater Academy, Inc; Wolfson Hutton Company a for-‐Profit Panamanian Company which owns School Development HG II, LLC, a for-‐Profit entity formed in 2003; Academica Charter Schools Finance LLC, a for-‐Profit entity which provided mortgage financing to School Development HC II for the purchase of school property; and Other organizations involved as lessors for Mater, Doral, Somerset and Pinecrest Precatory Academy facilities; schools which all have management contracts with Academica Corporation: o School Development East, LLC o Palmetto Park Inc. o Pinecrest School Development LLC o School development LLC o Valenci School Development, LLC o Doral Academy High School
At the time of the investigation the following interrelationships among the Academica managed schools included: • • • • •
The principal of Mater Academy High School and a Vice President of Mater Academy, Inc, is the chair of Pinehurst Academy Inc.; A teacher at Mater Academy, is on the Boards of Somerset and Doral Academies; The Principal of Mater Academy Charter Middle School is on the Governing Board of Doral Academy, Inc.; An Assistant Principal of the Mater Academy High School was on the Governing Board of the International Studies Charter High School; and The mother of the Vice President/Secretary of Academica Corporation and Mother-‐in-‐Law of the President of Academicia Corporation was a Governing Board Member of both Pinecrest and Doral Academy Charter Schools.
“One of the Board members for two of the Academica managed charter schools indicated she was asked to serve on the Board by the president of Academica and when asked about various financial arrangements that she was asked to approve as a Board member of Mater Academy Inc., “she indicated that she is an educator, not a businessperson. She relied on other Board members with expertise to question decisions involving business.” A parent Board member told the auditors “that she was asked to be on the Board by Mater Academy high School’s Principal, to satisfy her mandatory volunteer hours required for parents of students enrolled in the school. Although she had been on the Board since September 2003, she indicated to us that she was unfamiliar with any of the financial transactions of Mater Academy and she usually did not know what she was voting to approve.” The report goes on to reference numerous issues involving financial disclosures and the possible abuse of Tax Exemption Benefit. 72
Miami Herald Article Dated December 13, 2011 Academica: Florida’s richest charter school management firm “PARADISE ISLAND, Bahamas: On a sun-‐drenched weekend in September, a group of South Florida charter school principals jetted off to a leadership retreat at The Cove, an exclusive enclave of the Atlantis resort. A Friday morning meeting gave way to champagne flutes, a dip in the pool and a trip down a waterslide. The evening ended at the casino.” “Leading the toast by the pool: Fernando Zulueta, the CEO of Academica Corp., which manages the principals’ schools.” This article goes on to discuss the fact that some of the schools managed by Academica have been deemed as very successful per U.S. News & World Report. It also goes on to discuss a number of financial aspects of Academica-‐related schools and activities to include: • • •
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One of its chains of nonprofit schools has assets of more than $36 million; The company receives more than $9 million a year in management fees just from its South Florida charter schools; Through more than two dozen companies, the Zuluetas control more than $115 million in South Florida real estate – all exempt from property taxes as public schools – and act as landlords for many of Academica’s signature schools; The companies collected about $19 million in lease payments from charter schools – with nine schools paying rents exceeding 20 percent of their revenue; Academica has fostered a close-‐knit culture among its schools, recruiting principals and teachers who rarely leave the ranks and are often promoted from one Academica school to another – though the staffers technically work for their respective schools, not the management company; and Several principals also serve as board members at other Academica schools, where they oversee Academica’s management contracts and the real estate leases – including the leases with the Zulueta companies.
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Audit of Questioned Financial Transactions of Doral Academy Charter High School This report, completed in December 2013 was also prepared by the Miami-‐Dade Public Schools Office of Management and Compliance Audits (OMCA). The introductory letter states “the audit needed to be performed based on our identification of two financial transactions we questioned during our annual review of the high school’s June 30, 2012, financial statements.” This 69 page report can be accessed by going to www.dadeschools.net, and then accessing the Doral Academy Charter High School audit The two transactions being reviewed included: 1. “A $400,000 outlay of funds to Doral College, Inc. (a private institution of higher learning “independent of Doral Academy Charter High School) and not subject to Florida Public Records law. The monies were expensed as a “recoverable grant” on June 30, 2012.” 2. “$4.5 million in capital expenditures for additions and improvements to the school’s leased facilities, which are owned by the same individuals who own Academica, the school’s management company.” Regarding Item 1, the audit states: “We determined that the $400,000 grant to Doral College, Inc. occurring on June 30, 2012, represented a material and unique expense to the High School, and comprised substantially all of the College’s FY 2011-‐2012 revenues. Despite this, Governing Board meeting minutes and other communication presented and/or obtained demonstrate the “recoverable grant” was not approved or even considered by the High School’s Governing Board, in a publicly noticed meeting, as of the time of its execution on June 30, 2012. In fact, such consideration and approval by the Governing Board did not take place until November 5, 2012, four months after the fact, and after our office questioned the transaction in written inquiries. In this regard, the $400,000 ‘recoverable grant’ transaction occurred without Governing Board approval and lacked transparency. Also, we were not provided any documentation as to what contractual assurances the school had that it would receive any benefit from its payment of publicly derived funds to the independent Doral College, Inc.” The auditor comments regarding Item 2 were as follows: Regarding the second questioned transaction, “we found that Section 3.5 of the Lease Agreement allows the Landlord to terminate the lease early, subjecting the High School to losing to the Landlord any capital investments for additions and improvements to its leased facilities. This exposure to loss applies to construction contracts (totaling approximately $4.5 million) which were approved by the High School’s Governing Board in March 2009 and December 2010. Although a letter was delivered to the School dated July 3, 2012, which presumably attempts to correct the Tenant’s exposure to loss, that letter appears to contain significant flaws and may not be legally enforceable.”
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This report also identifies a number of issues pertaining to the independence of the Governing Board, to include: •
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The individual who served as Chair of the Governing Board through 2009 has since been employed by Academica as the Director of Operations. “As Chair of the Doral Academy Charter School, he supported and executed at least two substantial transactions.” The auditors had made numerous attempts to contact this individual, but received no response. The Vice Chair and Treasurer of the Governing Board of Doral Academy is a practicing attorney who also serves as Chair of the Board of Trustees of Doral College, Inc, a private institution of higher learning operated by Doral College Inc., a non-‐profit 501(c )(3) organization. The College is “independent of Doral Academy High School.” Two members of the Governing Board also served for years in management capacities at multiple Academica managed charter schools. At the time of the report, they were both principals of charter schools managed by Academica. The principal of Doral Academy Charter High School and two other charter schools managed by Academica serves as the Chief Operating Officer of Doral College and is a consultant for Somerset Academy, Inc., both organizations managed by Academica. The auditors requested to meet with and interview the Schools’ Governing Board members. Through their attorney, they declined requests to meet for in-‐person interviews.
This report goes on to reference a number of issues involving the various Doral Inc. Charter Schools and the Academica management.
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Other Issues Raised by the Office of Management and Compliance Audits July 1, 2014 Re: Transfers/Advances of $7.4 Million by Four Mater Academy Schools to Mater Academy Inc. A letter was sent to the Gunster Law Firm regarding a request for audited financial statements and disbursement registers of Mater Academy Inc. Issues raised pertaining to this request include: • • •
“The agreed upon procedures performed by the Mater Academy, Inc.’s CPA firm were minimal and there was deeply qualifying language throughout the memorandum.” “An Exhibit of the agreed upon procedures memorandum only goes through June 30, 2013, even though the analysis was performed in May 2014.” “The lack of access to the Mater Academy Inc. (corporate) audited financial statements and disbursement registers the Office of Management and Compliance Audits is unable to confirm that the $7.4 million transferred by the schools to Mater Academy Inc. is the same as those expended by the corporation.”
September 8, 2014 – Subject: Follow-‐up on ABAC meeting of May 13, 2014, Agenda Item 9.A– • •
Transfers of $7.4 million by Mater Academy School are not transparent – Mater Academy, Inc. is not providing required financial documents. The OMCA identified $7.4 million in transfers from four Mater Academy Charter Schools which were characterized as long-‐term non-‐interest advances to Mater Academy, Inc. (Corporate Account) on June 30, 2013.
May 5, 2015 – Subject: Fiscal Year 2016-‐2014 Audited Financial Statements for 25 of 126 Charter Schools at Year End. Concerns were identified with three charter schools that transferred funds to the Mater Corporate Account. Charter School Amount of transfer to Corporate Account Mater Academy $1,512,000 Mater Academy Middle School 540,000 Mater Performing Arts and Entertainment Academy 935,000 Total $2,897,000 Although information had been provided regarding these funds, OMCA still indicates that: “As previously communicated, we are not clear as to the propriety or legality of a charter school transferring FEFP funding to a “corporate account” and/or another charter school governed by the same legal entity when no goods, services or deliverables are provided in exchange by the receiving school (or entity). 76
League of Women Voters Education Issues Publications January 30, 2015 -‐ Better to light one candle than to curse the darkness “There is a lot of money to be made and lost with charter schools, and it is public tax dollars. As usual, independent schools tend to lose it and charter management chains come out on top.” “The Center for Education Reform reported that the number one reason that approximately 20% of all charter schools close is due to financial deficiencies. Most of these are small, independently run charters. Large charter chains, even for profit ones, thrive. A major difference is their access to funding for facilities, and in some cases, the ability to locate where there is a stable source of revenue – higher achieving students.” “Lease Backs – Charter school management companies, which may be for profit, create subsidiary real estate companies to build or lease facilities for a fee. These are called Lease-‐backs. There is no restriction on the amount of the payments, and companies also serve as intermediaries for leasing facilities they do not own. While charters in Florida submit annual audits, there is little transparency or oversight of these payments. The audit reports the payment, but the management companies are private and not required to provide detailed information to clarify actual costs.” April 12, 2015 -‐ Charter Schools: Climate of Corruption? In 2012, Florida received an “F” on Ethics Enforcement agencies from the Center for Public Integrity. On the overall corruption index, Florida received a C-‐.” One of the worst stories involves a $400,000 loan from Doral Academy to Doral College, a non-‐ accredited college started on the grounds of Doral Academy Charter School. The idea is to enroll high school students in duel enrollment courses at the college, taught by the charter high school teachers. Evidently, only students from these Academica run charters can enroll. Academica is under federal investigation. The students earn credit that cannot be transferred to any accredited school. The college earns money. Who is involved?” This report goes on to identify a number of members of the Florida Legislature that may have a conflict of interest because of their association with Academicia. July 22, 2015 For-‐Profit Charters: Whose Interest is Being Served? “Lots of money easily available can lead to abuse, and it did-‐over and over again in Miami. It is so much money that it may be time to follow New York’s lead and ban for-‐profit education management companies. In this post we look at Academica, Florida’s largest for-‐profit education management firm.” “Make Money Building Charter Schools explains how some charter schools are financed through the charter loan company, Building Hope. It is clearly written in a step by step manner using Academica’s Doral Academy as an example; this school has strong ties with Florida legislators.”
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“Building Hope has access to millions of dollars of public money through Sallie-‐Mae, the Community Development Financial Institutions Fund, and the U.S. Department of Education. The private Clavert and Walton Family foundations also support Building Hope. In 2011, the company loaned Doral Academy $5.2 million at 7% interest the first four years and 12% interest the remaining two years. It’s an interesting way to make money—get public dollars from the federal government and make high interest loans to non profit schools, which turns the money to private real estate companies such as School Development, LLC controlled by the for-‐profit Academica management company. Doral Academy then pays back Building Hope with the per student allocation provided by the Florida tax payers.” This report goes on to list the various issues raised by the Miami-‐Dade Office of Management and Compliance Audits.
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