Audit calls for charter school funding, growth controls

State leaders released a legislative audit on charter schools today that calls for better funding equity between charter schools and traditional schools as well as ongoing controls over charter school to help conserve financial resources.

Last April, after a legislative request, state auditors launched the audit to examine the financial viability of charter schools, funding equity with traditional school districts and compliance with state laws.

Rep. Jim Dunnigan, R-Taylorsville, who requested the study, said with the explosion of interest in charters it behooves lawmakers to make sure that the money is being spent appropriately.

Charter schools are free public schools that are often started by a group of parents looking for alternative ways to educate their children.

Wayne Kidd audit supervisor said that as a whole the schools are financially viable; however, auditors recommend lawmakers look at increasing the funding charters get in lieu of property tax revenue.

Unlike school districts, charter schools can't bond or create revenue. They must rely on state and federal funding to run their schools while school districts get additional money from local property taxes. So the state kicks in replacement funding for charters in lieu of local property tax revenue.

But according to the audit, despite the legislative intent to have equal per-student revenue, "the current local replacement formula does not achieve that goal."

The audit recommends the legislature consider different options including adjusting the local replacement formula with full state funding, establish a property tax sharing system with school district funding or a hybrid plan where the state and school districts share in the cost of those funds.

The study also showed that other revenues for charter schools in the state have been declining in areas like federal start-up funding and facilities grants because of rapid growth. Auditors recommend controlled growth of charter schools to help conserve those funds.

Last spring lawmakers limited approvals to five new charter schools each year. But in recent years around a dozen schools have been approved each year.

Some lawmakers said the cap would only be for the 2007-08 school year but many charter leaders say something needs to be done to control growth. Currently their are 53 charter schools.

The report also indicated that charter schools aren't following the State Board of Education's accountability rules. Charters are required to submit annual progress reports for review committees to examine where they stand.

According to the audit, those reports aren't being submitted and those committees have never been formed.

The audit recommends the state board enforce the rules and establish review committees to ensure accountability.

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