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    RELEASE: New Report Reveals New York State’s Charter Schools Pose $54 Million Fraud Risk to Taxpayers

    FOR IMMEDIATE RELEASE

    Contacts
    Alison R. Park, (917) 805-0830, apark@populardemocracy.org
    Wendy Liberatore, (518) 432-5315, ext. 102 or (518) 491-0454, wendy@aqeny.org

    NEW YORK CITY and WASHINGTON, DC (Dec. 1, 2014) — Today, the Center for Popular Democracy and Alliance for Quality Education released a report titled Risking Public Money: New York Charter School Fraud that reveals vulnerabilities in the state’s charter oversight system that could potentially cost New York state taxpayers as much as $54 million in charter fraud this year alone.

    “Our governor and other school privatization advocates have pushed relentlessly to expand the charter industry at the expense of public school communities in New York State,” said Billy Easton, Executive Director of the Alliance for Quality Education. “But the proliferation of charters hasn’t been matched by the oversight needed to ensure that public money intended for students doesn’t instead get lost to fraud, waste and abuse.”

    The report finds that state agencies have audited just a quarter of New York’s more than 250 charter schools since 2005, largely relying on them to police themselves instead. Yet in a startling 95 percent of the charters examined, auditors found mismanagement and internal control deficiencies that have occasioned $28.2 million in known fraud, waste, or mismanagement. Recognizing that the industry cannot be trusted to monitor itself for problems, the report’s authors have offered common sense interventions to remedy the problem, and have called for a moratorium on charter expansion until meaningful public oversight has been put in place.

    “We can’t afford to have a system that fails to cull the fraudulent charter operators from the honest ones.”  said Kyle Serrette, Education Director at the Center for Popular Democracy. “Given that New York spends over $1.5 billion on charter schools and more than 90,000 children are enrolled, a lot is at stake. We can’t afford to wait for tens or hundreds of millions m
    ore dollars to be lost before policymakers address this glaring issue.”

    Here are only a few statewide examples among the dozens in the report:

    IN NEW YORK CITY:
    Harriett Tubman Charter School issued credit cards to its executive director and its director of operation. They charge more than $75,000 in less than two years. The charges were never approved or explained.

    IN LONG ISLAND: Roosevelt Children’s Academy Charter School paid four vendor a total of $521,197 for significant public work and purchase contracts without fair competition.

    IN ALBA
    NY: Albany Commuity Charter School lost between $207,000 to $2.3 million by purchasing a site for its elementary school rather than leasing it.

    IN ROCHESTER: Eugenio Maria de Hostos Charter School failed to enter into a competitive bidding process for several instructional contracts. Instead the school awarded contracts to board members, relatives and other related parties.

    IN BUFFALO: Oracle Charter High School entered a 15-year building lease with Oracle Building Corporation, agreeing to pay them more than $5 million at a 20 percent interest rate.

    To read the full report, click here.                                       

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