Forbes by Peter Greene, September 19, 2022

Senator Tim Scott and a group of GOP Congressmen are trying to remove some accountability for rules for the federal charter school grants program. The Charter School Program (CSP) has been dispersing federal funds to states so that they can use the money to fund charter schools. Since its first round of grants in 1995, the CSP has handed out over $4 billion. A 2019 study by the Network for Public Education found that roughly $1 billion of that was lost to fraud and waste. Early in 2022, the Biden administration proposed some measures to tighten up the rules for awarding CSP grants. They were in general aimed at getting charters to act more like the community public schools they have often claimed to be, rather than private, profit-driven businesses, particularly by adding new requirements for accountability and transparency. After a period for public comment, the final version of the proposal was adopted.

The new rules close some loopholes, in particular tightening up practices around profit-making. While virtually no states allow for-profit charter schools, many allow a non-profit charter to be run by a for-profit charter management organization, sometimes via contract that gives the CMO near-total operational control as well as virtually all the revenue collected by the charter (known as a “sweeps contract”).

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