Capitolwire: Auditor General says PDE does nothing about questionable charter school lease reimbursements
August 04, 2016
By Christen Smith
HARRISBURG (Aug.3) — Auditor General Eugene DePasquale said Wednesday the state Department of Education wasted $2.5 million reimbursing questionable charter school leases since he took office in 2013.
It’s a problem, he says, PDE doesn’t bother to fix, let alone prevent.
“There comes a point when you just have to raise the issue, broadly speaking, to make sure something gets done on this in Pennsylvania,” DePasquale told reporters during a press conference Wednesday. “The issue isn’t just about the improper lease reimbursements, but what we see as way too many improper lease reimbursements across the state.”
An audit of the Propel Charter School System in Allegheny County found four of its seven buildings received $376,921 in lease reimbursements from the state over the last six years. The only problem is, DePasquale says, the buildings’ “landlords” and Propel’s operators are one in the same, making the schools ineligible for reimbursement from the state.
DePasquale said the Propel schools are just some of the nine schools his office says have inappropriate lease agreements and the department may have paid out close to $10 million or $15 million since the reimbursement provision was enacted in 2002.
“The Department of Education … is literally allowing millions of dollars to be diverted from the classrooms into some bank accounts of some charter schools across Pennsylvania,” DePasquale said. “It is on the department to verify whether their own guidelines are being followed. The problem is, we find zero evidence that the Pennsylvania Department of Education makes any effort to verify ownership of the buildings or look for any conflicts of interest between the school and related parties. They simply write a check for whatever amount the charter school submits.”
Casey Smith, a deputy press secretary for the department, says charters must complete annual requests for reimbursements, which includes attestation from the CEO certifying the school’s eligibility.
“We have already begun reviewing our annual process to apply greater safeguards ensuring that every taxpayer dollar is spent appropriately,” Smith said. “Unfortunately, current law does not grant PDE the authority to seek repayment from the charter schools for inappropriate payments.”
DePasquale disagrees and argues his office “has done the hard work for them.”
“Given that PDE has the authority to approve the lease reimbursements, they also have the authority to claw-back the funds if there is any indication that the charter school actually owns the buildings through related parties,” he said.
Bob Fayfich, executive director of the Pennsylvania Coalition of Public Charter Schools, said DePasquale and PDE simply have different interpretations of the same law.
PCPCS represents Chester Community Charter School in Delaware County, one of the nine schools highlighted in DePasquale’s report. He says the school received $1.2 million in improper lease reimbursements between 2008 and 2011.
“The position of PDE has been that the ownership is irrelevant and that the charter is due lease reimbursement regardless,” Fayfich said. “It’s really a situation where the interpretation is different. It’s something that needs to be worked out between the auditor general and PDE.”