Here
is the latest federal government report on fraud, waste, and abuse in the
charter sector.
It was released in May 2014 by the Center for Popular
Democracy and Integrity in Education. The most common type of fraud
identified was embezzlement.
Here
is the summary of their findings:
With
the increase in funding that schools are receiving through the Recovery Act, we
issued a report that highlighted past OIG investigations involving fraud at
charter schools.
Charter
schools generally operate as independent entities that are subject to oversight
by an LEA [“local educational authority”] or authorized chartering agency.
Our
investigations have found, however, that LEAs or chartering agencies often fail
to provide adequate oversight needed to ensure that Federal funds are properly
used and accounted for.
The
type of fraud we identified generally involves embezzlement. The schemes that
are used to accomplish this are varied.
For
example, we have found cases where charter school executives falsely increased
their schools’ child count, thus increasing the funding levels from which to
embezzle.
We
also identified an alleged grade changing scheme that allowed failing students
to pass in order to ensure that the school met Adequate Yearly Progress, which
allowed the school to continue operating, thus continuing a funding scheme from
which to embezzle.
We
have also unraveled schemes where owners or employees of the charter schools
created companies to which they diverted school funds and misused school credit
cards for personal expenditures.
Our
report provided examples of investigative cases involving charter schools.
The
Department generally agreed with our observations and expressed interest in
working with OIG in determining how to enhance, when appropriate, its policies
and monitoring processes involving charter schools.