Much has been written about for profit charter management companies. Many, of which I am one, have written about the potential for large profits, not only at the expense of the taxpayer, but also at the expense of the charter school itself.
Often charter management companies don't charge for specific services, but charge a general percentage of revenue. Charters often have no idea what the services they receive actually cost.
In a different twist, a Pennsylvania charter school is fighting to protect records of expenses paid to its management company and the management company's owner. Why is it that a school's expenses are subject to public records searches, but a management company that charges 10% to 14% doesn't have to simply because it is a for profit company. Well, the courts in Pennsylvania have now held that because a management company serves a function that ordinarily would be filled by public employees, it must give up its records. In the same way that for profit management companies have profited from public funds, they now have had the table turned on them. If this decision holds up, then for profit management companies may begin to be held to the same standards as non-profits and governmental entities.
Given the inherent issues with a for-profit company managing a non-profit company as well as a governmental entity, perhaps this level of scrutiny is appropriate. This puts management companies on an even par with internal management.
1 comment:
The concept of government contracts with for-profit organizations is by no means new. Similarly, the question of profit taking at the public expense is age old. Fortunately, the charter arena offers one of the few venues where we as private citizens can directly assess the value of a government contract with a for-profit organization and revoke it should we deem it disadvantageous. How is this possible? Competition. This fundamental difference between charter schools and traditional public schools is often neglected in the debate over regulation. As parents, we choose a charter school because we believe it to provide a better educational alternative to the local state run public school. This simple fact limits both the negative impact that for-profit organizations can have on the operation of a school as well as the requirement for regulation. Ultimately, it matters little how corporations allocate the funds they obtain from contracting with schools. When the dust settles, bad schools operated by inefficient management companies will close and good schools operated by efficient management corporations will thrive.
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