Take a close look at charter schools: Charter schools are here to stay, but the lack of oversight in financial management is damaging their impact. (The State of Education).

Pick up many of the national survey stories on the U.S. charter school movement and you'll note that a paragraph or two always refer to Minnesota, birthplace of the first charter school law (1991) and charter school (1992).

The stories generally assume an optimistic tone. Charter schools, unshackled from the horrendous restraints of "establishment" educators, are free, free, free to revolutionize public education! True believers of every stripe describe their vision of what taxpayer money, talent, and hope can do. You almost feel the quivering.

The stories rarely cite what goes wrong in a world where scrutiny occurs only when a charter is up for renewal, or when a school implodes from within.

Minnesota now has 69 charter schools. Each operates with the provisions of a charter that sets out goals. For example, a school may focus on technology or the performing arts with the objective of graduating students who excel in those areas. The school functions like a small school district, unencumbered by district personnel policies or union provisions. If a school doesn't meet the charter terms, it is closed.

Charter school proponents believe the action of closing an underperforming school speaks to the effectiveness of charter schools. When traditional public schools fail to perform, they suffer no consequence.

Let me interject here with a personal note. I've written editorials for five years and worked as a journalist for almost 10 years. In spite of certain outdated stereotypes about Minnesotans as soft-spoken bachelors, know this: Charter school proponents shriek at volumes that drown out any 747. Rarely have I seen adults so fired up on the absolute goodness of their creation. While passion is fine, I wrote editorials and columns asking why a school couldn't be innovative and financially responsible at the same time. For a long time, it appeared that the status quo would prevail. Ultimately, however, the state legislature strengthened the charter school law but only after bouts of kicking, screaming, and strong evidence of a need for change. But the charter school story is getting ahead of itself.

Conflicts of interest on charter boards

A year ago, state representative Matt Entenza, a former assistant state attorney general with experience prosecuting white-collar crimes, finished an investigation that examined the accounting operations of 50 Minnesota charter schools. Entenza discovered patterns of conflicts of interest on charter school boards and questionable accounting practices in a majority of the schools. In March 2000, the state education department released information showing frequent cases of financial nepotism in charter school operations where those with close ties to the schools profited through lease arrangements.

The education department -- called the Department of Children, Families, and Learning -- is limited in its influence on charter schools. The department's small staff approves the charters and does some auditing. The state education commissioner can revoke a charter. Charter school sponsors, often a school district, are responsible for the school's operations but in many cases, the sponsors are lax in vigilance until the charter is up for renewal.

Perhaps the greatest headline splash from the charter school movement here sprang from school closings. Since the charter school law went into effect, 13 schools have closed, three never opened, and 10 new schools will open this year.

St. Paul's Success Academy closed abruptly in May 2000 before the end of the school year with a $1.23 million debt; 400 kids were left without a school. The closing captured Entenza's attention, who followed with an investigation that showed inflated rent payments, inflated student counts to bring in more state aid, and even money earmarked to pay for an employee's wedding.

The ill-fated Success Academy was followed by a series of closings elsewhere and criminal investigations into shady lease deals, inexplicably high salaries of administrators or high management fees to private companies, and blatant examples of nepotism on charter school boards. In one case, a school official hired family members for construction work.

As the evidence added up, the state legislature amended and strengthened the charter school law, which now requires a better keeping of charter school records, addresses conflicts of interest on charter school boards, and no longer allows school officials to enrich themselves through building leases. The state legislature also created a state charter school board at the same time it amended the law. The board will offer technical support and training, but it offers few solutions to the problems of financial accountability.

Certainly in some cases, missteps occurred because well-meaning people were in over their heads. Knowledge of innovative curriculum doesn't necessarily translate into a knowledge of accounting practices. The spectacular blowups of several schools came about because oversights common throughout the public school system don't apply to charter schools. These oversights might include public budget-setting sessions, open school board meetings with press coverage, and published test scores and graduation rates.

Note that many Minnesota charter schools pass their financial audits and provide good education, such as the Twin City Academy in St. Paul and the Minnesota New Country School in Henderson. Charter schools are here to stay. But their impact as innovative tools will be dulled with increasing stories about malfeasance. Like all public entities, oversight and checks and balances are imperative. If the schools cannot withstand public scrutiny during a time when all other public schools receive increased scrutiny, let them stop taking public dollars and become private schools.

NCEW member Deborah Locke is an editorial writer with the St. Paul Pioneer Press and a member of the Education Writers Association. Contact her at [e-mail]