30 Mar Spending Varies Widely at Charter Schools in New Orleans (LA)

March 30, 2011

By: Andrew Vanacore
Source: New Orleans Times-Picayune

Financial health and per-pupil spending appear to vary widely at the independently run charter schools that have come to predominate in New Orleans, according to new data compiled by Tulane University.

Charter schools in the city spent as much as $16,537 per student during the 2008-2009 school year and as little as $8,481, according to Tulane’s Scott S. Cowen Institute for Public Education. They ran per-student deficits as high as $1,953 and had surpluses of as much as $3,205.

The figures cannot be taken as a comprehensive picture of school finances. They’re out of date, for one thing, because the state didn’t make data from charter schools public in some cases until 14 months after the end of the school year. That’s a lag the study’s authors would like to see reduced.

And the numbers capture the city’s myriad charter organizations at various stages of development; while the numbers show some schools do have strong fundraising operations to augment state financing, others had startup money that won’t be available every year.

Still, the latest snapshot offers a window into school finances at an important moment for the city’s education system.

New Orleans is five years into a dramatic overhaul of the way schools are run, with thousands of students’ futures at stake. After Hurricane Katrina, the state’s Recovery School District took over most schools in the city, eventually turning most over to charter groups that are mostly given free rein over budgets, curriculum and hiring but must still pass periodic evaluations. The Orleans Parish School Board, wh ich kept a handful of high-performing schools, has chartered most of those as well.

The upshot is that more than 40 different school operators are keeping their own books, rather than one single school district. Tracking how all of them manage millions in taxpayer dollars will be a critical job — and a tricky one — as parents, administrators and activists debate the school system’s future.

Last year, the business manager of one charter, Langston Hughes Academy, received a five-year prison sentence for siphoning off $660,000 to finance a gambling habit. The Priestley School of Architecture and Construction relinquished its charter a few months ago after running into insurmountable financial problems and is now being run by the School Board.

Insurance curveball

The new figures arrive as the city’s charters face a potential financial curveball — the possibility that the $12 million tab for property insurance, until now covered by the state, might be split among individual schools next year.
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Tulane’s study shows almost half of the city’s charters were just about breaking even or running a deficit as recently as the 2008-2009 school year, so any added costs could impose a difficult burden.

What nobody wants is a return to pre-Katrina days, when corruption and mismanagement led to persistent red ink.

The new figures released by Tulane this week show New Orleans charter schools took in total revenue of $233.2 million, an average of $11,416 per student, for the 2008-2009 school year. That was roughly even with the year before.

The city’s charters spent $228.7 million, or $11,195 per student, up almost $1,000 from per student spending of $10,224.

Each school received a minimum of about $8,400 from state tax dollars. The rest came from various federal programs, some of them set up to help with storm recovery, as well as foundation grants, private contributions and student fees.

Because of disaster-related federal funds, per-pupil spending in New Orleans since Katrina has been much higher than the state average, but the gap is narrowing as that money runs out.

Tulane’s data show that some charter schools were struggling financially in their initial years, even with the extra federal money.

Despite a record of high academic performance, Ben Franklin High School was running a deficit of more than $1,100 per student. In November 2009, the School Board threatened to revoke the school’s charter if its fiscal performance didn’t improve.

Timothy Rusnak, who was hired as Ben Franklin’s CEO in 2008 to help turn things around, says the school was putting off tough decisions that confronted the administration in Katrina’s wake. The school was hanging on to much of its teaching staff, Rusnak said, but the student population wasn’t back up to pre-storm levels, creating a shortfall because the state doles out education financing on a per-student basis.

To bring the budget back into the black, Rusnak imposed layoffs and other spending cuts. The school started charging fees for extracurricular activities like sports. Meanwhile, enrollment has climbed 27 percent during the past two years. All of that has helped the school return to the break-even point, Rusnak says.

Other factors weigh in<br /&gt ;

The numbers Cowen released don’t always provide a complete picture of an individual school’s financial performance.

New Orleans College Prep, for instance, ranks at the top of the list as far as per-student revenue and spending, as well as outside contributions. According to the study, it took in $18,646 per student — $5,323 of it from outside contributors — and spent $16,537.

But Ben Kleban, the school’s director and founder, disputes those figures, saying the state undercounted College Prep’s student body by 18. That means revenue per student would have come in at $16,695 and spending at $14,806.

That would still rank the school at the top among charters for both revenue and spending, but Kleban points out that much of the extra cash came from large one-time startup grants from organizations like the Walton Family Foundation and New Schools for New Orleans. He said revenue per pupil in the 2009-2010 school year fell to $12,503 per student, with spending at $11,068.

"To say that we have some secret sauce for fundraising just wouldn’t be accurate," Kleban said.

On the other hand, some schools do have robust fundraising operations that help consistently boost what they can spend on their students.

The New Orleans Charter Science & Math High School has a separate nonprofit organization for writing up grant applications and soliciting donations. For the 2008-2009 school year, outside contributions of $1,220 per student lifted total revenue to $12,752 per student.

The Tulane report provides no policy prescriptions for school financing, but it does note the potential pitfall RSD charters would face if they had to pic k up their own property insurance bills.

To date, the RSD has picked up the tab using state money. But some Louisiana lawmakers argue that’s an unfair perk enjoyed by New Orleans schools, and they’ve talked publicly about doing away with it. Tulane estimates that would cost RSD charters $450 per student.

And although the Orleans School Board also covers property insurance costs for its 12 charter schools, that is subject to change given that charters come up for renewal every few years.

"That could hurt us," said Rusnak, of Ben Franklin High, a charter under the School Board. "That could hurt everyone. We’re very nervous about that frankly."

The Tulane study also includes recommendations urging the state to make financial data about city schools available in a more timely way. Statistics for charter schools for the 2009-2010 school year weren’t available for the report.

In a statement, Louisiana Department of Education spokeswoman Rene Greer said the agency is "committed to ensuring the public has access to timely and accurate financial reports on all school districts and schools."

But she said school districts and charter schools do sometimes ask for extensions in reporting financial data, which can cause delays.

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