State law bans multiple salaries from charter schools

An ongoing federal investigation at Philadelphia Academy Charter School prompted the Rendell administration last week to draft a school-code provision prohibiting charter school administrators from collecting multiple salaries.

The federal probe began in April after The Inquirer reported that Brien N. Gardiner, the school's founder and former top administrator, earned $294,500 - more than most area superintendents - from Philadelphia Academy, another charter he created, and a nonprofit he founded that provides special-education services.

"Anyone who thought the school code would pass without something to address the abuses in the Gardiner case was asleep at the wheel," Donna Cooper, Rendell's secretary of planning and policy, said Thursday.

The provision, offered as an amendment to the state school code, bars charter administrators from collecting multiple salaries from schools or from companies that provide services to charters. It was included in the omnibus education bill that accompanied the state's $28.3 billion budget and passed last week.

"Charter accountability is much lower than for school districts," Cooper said. "The Department of Education appropriately asked the legislature to respond to what was clearly an abuse because of a vacuum in the law. ..."

State education officials and charter representatives said they were unsure how many administrators could be affected by the salary proviso.

The change was written to prevent the multiple salaries that Gardiner and his successor, Kevin M. O'Shea, paid themselves with funds from Philadelphia Academy and related entities. Both men were fired by Philadelphia Academy's board in May.

The Inquirer reported in April that the Philadelphia School District's inspector general was investigating allegations of nepotism, financial mismanagement and conflicts of interest at the popular Northeast charter. The school, which opened in 1999, enrolls 1,200 students from kindergarten through 12th grade.

The salary provision was among several charter-related changes the legislature made to the school code, including prohibiting school districts from imposing caps on charter enrollment. Charter school proponents oppose such caps as impediments to growth.

The language restricting administrators' earnings applies not only to charter school CEOs but also to all employees "who by virtue of their positions exercise management or operational responsibilities."

The paragraph also makes clear that charter school administrators are considered public officials who are subject to the state ethics law and are required to file financial disclosure statements.

The Inquirer reported in the spring that Gardiner, a former district principal, collected a total of $224,500 in salaries in 2005-06 from Philadelphia Academy and Northwood Academy, another charter he opened. He also received $70,000 from a nonprofit he founded to provide special-education services.

O'Shea, a former city police officer with a high school diploma, was paid $206,137 as CEO in 2006-07, state records show. He collected $34,000 the year before from the nonprofit.

State Rep. Michael McGeehan, a Northeast Philadelphia Democrat, applauded the language barring charter administrators from collecting multiple salaries.

McGeehan met with state Education Secretary Gerald L. Zahorchak two weeks ago to discuss amending the state's charter law to "limit compensation and limit the number of positions one individual could hold at a number of charter schools."

McGeehan wrote to Zahorchak in May calling for an inquiry into the $331,000 paid in salaries to D. June Hairston Brown to run two public charter schools in Philadelphia in 2006-07: $187,978 for the Laboratory Charter School in Northern Liberties and West Philadelphia, and $143,723 for Ad Prima in Overbrook. She has opened a third charter in McGeehan's district, Planet Abacus, in Tacony, but is not the CEO.

McGeehan's letter came after The Inquirer reported that the state retirement system was investigating Laboratory and Ad Prima because Brown and three other staffers held full-time jobs at both schools.

"Many people certainly believe that it defies explanation," McGeehan said.

Brown said Thursday that she was unaware of the change in the law but doubted it would affect her position as CEO at two charter schools. Both schools, she said, have valid charters with the school district.

"The charter itself is an operating agreement," she said. "I don't think they could take it away from somebody."

Lawrence F. Jones Jr., president of the Pennsylvania Coalition of Charter Schools, said Rendell's budget and accompanying legislation was "pretty good for charter schools and for education in general."

Jones said he understands the intent of barring charter administrators from holding multiple jobs. But he said charter officials should have been consulted.

Jones said removing the caps "is a good thing for charters across the state when you look at the number of kids who are on waiting lists."

The coalition puts that number at 20,000 students. Statewide, more than 64,000 students are enrolled in 126 charter schools.

The school code amendment says enrollment in the state's charter and cyber charter schools cannot be capped unless the cap is agreed to by the school as part of its charter agreement with a school district.

State Rep. Dwight Evans (D., Phila.), chairman of the House Appropriations Committee, said that to help soften the impact of the provision prohibiting caps, the legislature increased the state reimbursement for the three districts with the highest percentage of students enrolled in charters. Philadelphia, Chester Upland and Duquesne will receive a reimbursement from the state of 41.9 percent of their payments to charter schools. All other districts will receive 30 percent reimbursements.

The new law also gives only Philadelphia the ability to renew charters for only a year, instead of for five years, if the School Reform Commission "determines that there is insufficient data concerning the charter school's academic performance to adequately assess that performance."

Cooper said this change stemmed from the Philadelphia Academy situation, where "parents wanted their children to continue to go to school, but the School Reform Commission didn't have the power to do a conditional renewal."

Last month the SRC voted to give Philadelphia Academy a new, five-year operating charter starting Sept. 1, provided the school meets a list of 20 conditions.

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