Thursday, May 7, 2015

Charter School Fraud in Arizona: Just a way of doing business

Arizona is a national leader in charter school activity for the simple reason that its Republican-led legislature has successfully blocked almost all attempts to introduce some fiscal accountability into the system. Consequently, such accountability has had to grow up outside state government as citizen initiated efforts. One of the foremost of these is Arizonans for Charter School Accountability, the creation of Jim Hall, a retired public school administrator.

Jim appeared May 6th on the 10 o'clock news for the Phoenix CBS affiliate. Here's a link to that video: While many public schools struggle, some charters profit.

What is sadly amusing about the televised piece is that the charter school featured at the beginning and portrayed favorably is the very same charter school featured in this blog in February. The Challenge Charter School in Glendale, AZ, has only 600 students, loses the vast majority of them by middle school, and pays the owner, his wife, and his daughter $430,000 a year in salary and benefits! If this is as good as it gets in Arizona, things are indeed in dire straits.

Here's a sample of the kind of reporting that Jim Hall is archiving on his organization's Facebook page:

[Slightly paraphrased for clarity] Leona Group's Sun Valley High School is located in Mesa, Arizona. Nine modular buildings were built in 1995 on 3.7 acres. They sold the school to themselves (a non- profit they created) in 2006 for $7,000,000 and now spend a $1 million a year paying the mortgage and maintaining the campus. They spend $1.2 million on all instruction and support for students. Administration costs come in at $1.2 million. 37% of their budget goes to kids. How can they get away with making all this money? It's an alternative school with low academic expectations, little parent involvement, a four-day week, and 144-day school year.

Compare this with your local public high school. Look at the campus compared to modular buildings. Consider the 180-day school year and all of the programs, sports, clubs, drama, band, and calculus classes they offer. They get the same amount of state funds that Leona gets.

Leona Group, which operates a dozen or so charter schools in Arizona and 60 schools nationwide, operates in the manner of the charter school economy: form a non-profit foundation to get a charter, then purchase teachers, curriculum, and management services from your own profit-making company. And if the state allows, start buying real estate and renting it to yourself.

Gene V Glass
Arizona State University
National Education Policy Center
University of Colorado Boulder

The opinions expressed here are those of the authors and do not represent the official position of the National Education Policy Center, Arizona State University, nor the University of Colorado Boulder.


  1. This comment has been removed by a blog administrator.

  2. Hi Gene, Great article! I was wondering if you have a recommendation on what to do if you believe that a charter school your son/daughter is attending is doing the Non-Profit funnels cash and real estate to the same non-profit owner's private company?

    I read another article here: That says the US Department of Education Office of Inspector General (OIG) is launching nationwide investigations of charter schools. Should people write the US Dept of Edu OIG? Or the State of Arizona Dept of Edu? Thanks!