Curious2

Charter School Expenses

Using the same data set discussed here and here, I calculated the total expenses per pupil at 58 New York City charter schools for the 2007-08 school year.  Here is the workbook with my calculations.

The total expenses for the 58 schools was $236,230,149.  The total enrollment was 17,680.  This comes out to a per pupil calculation of $13,361.  The average school expenses per pupil was $13,520.  The median school was $12,948.  For the 2007-08 school year, the “base funding” per pupil, i.e. the fixed amount per pupil received from the DOE, was $11,023.  So spending on the average student was $2,338 above the base amount. 

These numbers, from what I understand, include all expenses by the charter school, including the value of services rendered by a CMO (Charter Management Organization).  Through a friend, I asked an auditor the following question:

“When does an audit for a school need to reflect the value of free rent and other free services rendered by a CMO? In other words, can the CMO and/or Friends Of organization just give a school lots of free stuff including rent, accounting help, etc. and the school can ignore those benefits in their audit?”

The answer:
“The School has to record fair value of these services when incurred.  The school cannot ignore these services and is required to recognize the value as long as it meets certain criteria. The service requires specialized skill; like accounting, legal, design, architect, carpenter, etc.., and the service would typically need to be purchased if not contributed. You should also recognize services that ‘enhance or create a nonfinancial asset’ like services (skilled or non skilled) to constructing a building.  Donated facilities like rent should also be recognized at fair value not what they would have charged the school.”

In other words, if these audits were completed correctly, these expenses should include an estimated value of the services rendered by the CMO’s for the benefit of the school.  To be clear, since DOE space is given free to traditional public schools, it is not included in expense calculations for schools that are housed in public space. 

As always, I encourage charter school operators and other readers to help me to further improve this analysis.

Here are some additional notes:

1. I subtracted out Kipp To College costs because these amounts are not used for current students.  This is their alumni program.
2. I averaged across KIPP schools for per pupil expenses.  KIPP seems to run some network-wide expenses through KIPP Academy.
3. The data is missing for Bronx Charter School for the Arts because I have a bad copy of the Statement of Activities.
4. I removed  The New York Center for Autism.
5. I included fundraising expenses.

The Logical Next Step in an Illogical System

As I have written in the past (here and here), there is an excess supply of people that want to teach in New York City.  Back in November, on a panel at a Teach For America alumni summit, Vicki Bernstein, the Executive Director of Teacher Recruitment and Quality for the DOE,  confirmed this fact and pointed out the upside of the situation: schools could be more selective in future teacher placements.

For most traditional public schools, that upside disappeared yesterday. 

As GothamSchools reported, Chancellor Klein’s latest memo instructs principals to restrict their teacher hiring to “existing DOE staff, as opposed to people from outside the system.”  This includes informal commitments already made to prospective candidates: “You should reach out to these people and tell them that they will have to wait; those jobs might not actually be there and that you are unable to hire them at this time.  We are making no commitment to candidates, including Teach for America and Teaching Fellows candidates…”

So traditional public schools in NYC can only hire existing teachers, including a large number in the “excess pool”, i.e. teachers that lost their past jobs and have been unable to find a new position.  Teachers in the excess pool, though, still get paid.  This creates the financial problem: “We are imposing these restrictions because we cannot afford to support a growing excess pool, which currently includes 1,400 staff in all titles.” 

In other words, traditional public schools  can’t hire the teachers they would like to, because the DOE continues to pay teachers that no school has wanted to hire. 

Randi Weingarten, president of the teachers’ union, is pleased:

“I give them credit for seeing what a waste of talent and money this is, and for actually switching gears.”  Kafka would have loved Randi Weingarten.

New schools are given more flexibility:  “All new schools must hire at least 50% from current staff (from the closing school or elsewhere in the system), but will be able to hire 50% of their teachers from outside of the system.” 

Charter schools are not subject to the rules at all.  As a result, their competitive advantage has increased.  The exodus of parents away from traditional public schools will continue.