Bad Advisers

POSTED: September 8th, 2012

CATEGORIES: Article, Budget, Charter School, Edu Business, Education, Leadership, Superintendent,

TOPICS: , , , , , , ,

DISCUSSED: 3 Comments, (Join the conversation)

I’m now entering my seventh year being associated with Charter Schools as an authorizer and overseer. Each year, I am more and more impressed by the level of commitment displayed by the people who work in these schools and their leaders. Most are truly committed to helping children. Some take on students who everyone has given up on and perform what could almost be described as magic. Others take children who were bullied or felt neglected by their neighborhood school and provide safe havens for learning and growth. However, there is another thing that most of these schools share – a lack of reliable advisers.

Because for all of the passion, commitment to students, and bravery they display each day, they are taking advice from Charter Management Organizations (CMO’s) that not only poor, but wastes public money entrusted to the school to educate children. For example, in California, we are facing the prospect of a mid-year budget cut of over $400 per student should our Governor’s proposition to temporarily increase sales tax not pass. Not only is it not projected to pass, the state has even cut payments to schools by the amount they would be cut as if it were not going to pass. Smart districts and schools have already accounted for this cut and have developed budgets accordingly. Of the 12 schools I work with, all but two have accounted for the cut in their adopted budgets. As for those two, those who are advised by CMO’s, have not. They are continuing to spend as if the taxes will pass. They have no reserves and in one case will need to borrow money next month because of the money the state is holding back. Therefore, if the taxes don’t pass, they will need to cut almost $700 per student for the remainder of the year to make up for what they spent on the hope of passage. At least one – that does a great job with kids, is likely to go broke.

Not only are these folks receiving bad advice, the advice they are receiving is irresponsible, careless and shows disregard for public funds. Charter schools are not businesses. They are not private. They are public entities that receive public funds (tax dollars) to provide a service for the community.

These CMO’s are private; drain tax dollars from the system by charging exorbitant fees and making many, many backroom deals for other services from additional, private vendors who seek only to profit from the public trough. They take full advantage of passionate people who just want to help kids by loaning them money in advance of providing services in advance – before they get funding – in exchange for a multi-year agreement. I could go on, but it’s not right.

At this time, to my knowledge, only Edhive has advised clients to budget for the reduction and build in savings should more cuts evolve. Edhive does not take money from other vendors or upcharge services provide by other vendors that pass through their group. They do not belong to any state or national organizations that take money who take money from CMO’s to promote their agenda’s.

At the end of the day – the passion is there, but the advice is seriously lacking.

by The Ed Buzz
  1. Ed, you have made an important distinction. We certainly do not need for-profit (CMOs) k-12 schools to gain a foothold.

    Thanks for posting this important truth.

    R Lewis Cordell

  2. Doug says:

    This is thoughtful, but there are other advisors out there. For example, there are outsourced financial companies that work on a fixed fee for the school directly. I’ve even worked with schools that are part of EMOs and given them good advice. A school board that hires its own advisor can work successfully with a CMO or EMO.

    • The Ed Buzz says:

      Thanks. I agree there are some that are good. However, in my experience, there are some that give pretty shabby advice and get schools into all kind of trouble. The purpose of the blog was to get people to think about who they are getting advice from and verify their intentions.

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