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monitoring tool. More than half of the charter schools lacked written procurement
procedures, and only two required advertised competitive bids, a practice described as
inconsistent with the intent of the charter school movement to promote competition. The
Massachusetts report raised several issues regarding management contractors. Some
contracts had unclear management fees, and other privately managed schools paid
contractors more than called for in the contract. Four of 11 management contracts
contained no performance provisions regarding student academic achievement. Five
contracts restricted public use of educational curricula. The report found that loan
agreements between charter schools and their management contractors could render the
schools excessively dependent on their management contractors while reducing schools’
contracting leverage. The inspector general noted that both charter schools and the state
board of education were undertaking corrective actions to address many of the report’s
A field study of the impact of charter schools on school districts by Eric Rofes (1998) used
an interview methodology to examine perceptions of the financial impact of charter
schools in 25 districts. Rofes found that 14 of the districts did not feel a noticeable
financial loss as the result of charter schools. Eleven districts reported financial impacts,
and five of these said the impact was substantial. The impact of displaced funds may be
ameliorated by a rising tide of students; districts with enrollment growth appear to be less
likely to feel they were affected. Rofes also found that small districts were more likely to
feel affected than larger ones. Another important finding from the interviews was that
many school leaders had insufficient understanding of the school finance system to
determine the impact charter schools had on their budgets. In Minnesota, the Center for
Applied Research and Educational Improvement (CAREI, 1996) also found that large
districts felt a minimal impact as a result of charter schools.
In a study of impediments facing Illinois charter schools, Beckwith, Bradley and Price
(1998) found that 72 percent of the applications denied by local school boards were at least
partially based on financial grounds. This includes 9 of the 11 proposals appealed to the
state board of education. Facilities were less of a problem, being a factor in only 40 percent
of the denials, ranking behind education program and governance issues. Problems
centered on budgets submitted with the application, not school district financial issues. The
study also indicated that charter schools are dependent on private sector contributions. For
charter schools operating in 1997-98, grants, fees, fundraising and donations accounted for
19 percent to 60 percent of operating budgets.
In a similar study of early implementation in Massachusetts, Millot and Lake (1997) found
that next to facilities, finances were the biggest obstacle reported by charter schools.
University- and business-run charter schools had resources to deal with the up-front costs
of opening a charter school, but charter schools operated by community service
organizations and grassroots groups had to seek outside sources. The authors attributed the
failure of the legislature to provide start-up funding to several different views on 17 Venturesome Capital: How States Pay for Charter Schools chartering: (1) some advocates inte...
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This note was uploaded on 02/11/2013 for the course ECON 101 taught by Professor Smith during the Spring '09 term at Harvard.
- Spring '09