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Lax laws lead to a slew of shady finance dealings for Texas charter schools

In this recent article from the Houston Chronicle, an analysis by Hearst Newspapers is cited for having found cases in which charter schools collected valuable real estate at great cost to taxpayers but with a tenuous connection to student learning. In others, administrators own the school facilities and have collected millions from charging rent to the same schools they run.


In Houston, Fernando Donatti, the superintendent and founder of Diversity, Roots and Wings Academy, or DRAW, owns or controls four facilities used by the school, allowing him to bill millions to schools he oversees. DRAW’s most recent financial report shows signed lease agreements to pay Donatti and his companies more than $6.5 million through 2031.


A Houston-based charter school, Accelerated Learning Academy, is still seeking a tax exemption on one of the two condominiums it bought just over a decade ago in upscale neighborhoods in Houston and Dallas. The school claims it has used the condos for storage, despite a nearby 9,600-square-foot facility.


The largest charter network in Texas was a catalyst for the increased public scrutiny of charter school spending. IDEA Public Schools faces state investigation for its spending habits, including purchases of luxury boxes at San Antonio Spurs games, lavish travel expenditures for executives, the acquisition of a boutique hotel in Cameron County for more than $1 million, plans to buy a $15 million private jet and other allegations of irresponsible or improper use of funds. The allegations date back to 2015 and led to the departure of top executives — including CEO and founder Tom Torkelson, who received a $900,000 severance payment.


Another example is the A.W. Brown Leadership Academy, which has two campuses in the Dallas area that serve about 1,000 students. Property records show it owns eight properties, several worth millions that have sat unused — even as taxpayer money has gone to repay the loans used to buy them.


A Battle for Dollars

The battles between school districts and charter networks have become increasingly pitched, as they are locked in a zero-sum battle for public dollars.


Approximately 45,000 students in Houston transferred from the ISD to charter schools last year, resulting in a loss to the district of a minimum of $276 million. That figure includes only the basic allotment received by the districts, excluding special education funding or other allotments.


In San Antonio's two largest school districts, Northside ISD and North East ISD, more than 12,000 Northside students transferred to charter schools in the 2021-2022 school year, as did just under 8,000 from North East ISD. That means Northside lost at least $75 million, while North East lost $50 million, using the same basic allotment figures.


Georgina Perez, who served on the State Board of Education from 2017 until this year, noted arrangements such as these would never be permitted at traditional school districts.


“If it can't be done in (school districts), they probably had a good reason to disallow it,” she said. “So why can it be done with privately managed charter franchises?”


Continue reading the article here.



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