ALEJANDRO A. ALVAREZ / Staff Photographer
Vuong Thuy's Multi-Cultural Academy rents its property from a group Thuy founded and serves as executive director.
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One Philadelphia charter-school operator runs a private parking lot on the side. Another rents out apartments and collects the rent at his school. Yet another rents property to herself, signing her lease as both tenant and landlord.
These are some of the findings in a draft of a city controller's report on 13 Philadelphia charter schools obtained by The Inquirer that cites excessive salaries, compliant boards whose members are handpicked by school chiefs, inflated rents, and rampant conflicts of interest.
It "is abundantly clear that taxpayer money is at risk," according to the draft report, which is expected to be released within two weeks.
City Controller Alan Butkovitz declined on Friday to comment on specifics because the completed report has not been made public, but he confirmed that the document The Inquirer obtained was his final draft.
"Charter schools are an experiment in using private business models in the educational field, but this is not private money," Butkovitz said. "Charter schools are spending tax dollars as if it's nobody's business - as if they were private fiefdoms."
The Controller's Office opened its special fraud investigation of city charter schools several months after The Inquirer reported allegations of financial mismanagement and conflicts of interest at Philadelphia Academy Charter School in April 2008. Butkovitz's office has since been sharing information with the U.S. Attorney's Office, which is conducting its own criminal investigation of at least nine area charter schools, according to sources with knowledge of the investigation.
Although charter-school operators and others have claimed previous allegations of financial abuse disclosed by The Inquirer were not the norm, the Butkovitz report says "ethical concerns may, in fact, be more widespread than many acknowledge."
Barbara Farley, a school district spokeswoman, said she could not comment on Butkovitz's report because the district had not received a copy.
Lawrence F. Jones Jr., president of the Pennsylvania Coalition of Charter Schools, stressed that his organization favors charter-school accountability.
"If there are allegations someone has done something wrong, it needs to be investigated in a fair and transparent manner," said Jones, chief executive of the Richard Allen Preparatory School in Southwest Philadelphia. "And if they are found to have done something wrong, it needs to be vigorously punished."
In Philadelphia, there are 67 charter schools with 34,000 students. The school district is spending $356.7 million of its $2.3 billion budget this year on charter schools.
Among the findings in Butkovitz's draft report:
Questionable financial management, incomplete or missing records, and ethical lapses were seen at all 13 charter schools examined.
Average salaries for chief executives of charter schools were higher than those of public high school principals, and average salaries among the 10 highest-paid charter-school chief executives easily topped salaries paid to public school assistant superintendents.
Ten of the charter schools examined lease space from related nonprofit groups, and several are involved in complicated arrangements in which taxpayer funds are used to buy buildings that are controlled by nonprofits that have no accountability to the school district or to taxpayers.
Butkovitz said he remained a supporter of the charter concept and the notion that the schools encourage educational creativity.
"I think the idea of charter schools is fine," he said last week. "They give parents more options, and they're often educationally superior to the public school system."
The problem, he said, is their lack of accountability. "There is tremendous opportunity for abuse."
Charter schools are independent, taxpayer-funded schools that are free from many of the requirements facing traditional public schools. New Jersey's law authorizing charter schools was approved in 1996; Pennsylvania's was adopted a year later.
Butkovitz released a portion of his final report last week after 6ABC reported that the Harambee Institute of Science and Technology Charter School in West Philadelphia was doubling as a nightclub on weekends.
In the part of the report he released, Butkovitz disclosed that Rhonda Sharif, the school's chief financial officer, also served as business manager for two other charter schools and was paid $700,561 over four years by those three schools. She claimed to have worked more than 365 days in each year and collected $101,587 in reimbursement for "unspecified" credit-card expenses in 2008.
Charles J. Grant, Sharif's attorney, said Wednesday that he was confident she would be exonerated once authorities had reviewed the charter-school records being turned over in response to a federal subpoena.
In addition to the Harambee Institute, Butkovitz's report examined operations at Khepera in West Mount Airy; Math, Civics, and Sciences in Spring Garden; Franklin Towne Charter High School in Bridesburg; and the Imani Education Circle in Germantown.
Also, the Multi-Cultural Academy in North Philadelphia; New Foundations in the Northeast; People for People in North Philadelphia; Preparatory in South Philadelphia; and Community Academy of Philadelphia in Kensington. Three schools were removed from the report at the request of federal authorities.
The Butkovitz draft found that during 2007-08, the average salary for charter-school chief executives in the city was $115,171 - about $10,000 more than district high school principals earned that year.
