Arizonans for Charter School Accountability

𝐓𝐡𝐞 𝐀𝐜𝐜𝐨𝐮𝐧𝐭𝐚𝐛𝐢𝐥𝐢𝐭𝐲 𝐆𝐚𝐩 – 𝟏,𝟐𝟎𝟎 𝐃𝐢𝐬𝐭𝐫𝐢𝐜𝐭 𝐬𝐭𝐮𝐝𝐞𝐧𝐭𝐬’ 𝟐𝟎𝟐𝟐 𝐀𝐀𝐒𝐀/𝐀𝐂𝐓 𝐭𝐞𝐬𝐭 𝐬𝐜𝐨𝐫𝐞𝐬 𝐧𝐨𝐭 𝐫𝐞𝐩𝐨𝐫𝐭𝐞𝐝 𝐰𝐡𝐢𝐥𝐞 𝟓𝟏,𝟎𝟎𝟎 𝐜𝐡𝐚𝐫𝐭𝐞𝐫 𝐬𝐭𝐮𝐝𝐞𝐧𝐭𝐬’ 𝐚𝐜𝐡𝐢𝐞𝐯𝐞𝐦𝐞𝐧𝐭 𝐭𝐞𝐬𝐭 𝐬𝐜𝐨𝐫𝐞𝐬 𝐚𝐫𝐞 𝐮𝐧𝐤𝐧𝐨𝐰𝐧

The state’s new achievement test results did not include 1,231 district students from very small districts because federal privacy laws prevent reporting subgroups less than 11 students. The 22 district schools have enrollments of less than 79 students – 4 have less than ten students.

111 charter companies with a total enrollment of 51,152, including some of the largest charter companies in Arizona, somehow avoided having their test results published. This included all of the largest online charters - Arizona Virtual Academy K-12 (8,580 students), Primavera Online (5,989 students), EdKey Arizona Distance Learning (5,066 students), and ASU Prep Digital (4,019 students). Thirty-two other charter companies with enrollments over 200 students have no test scores reported.

When ADE Accountability Division was asked for an explanation, their response on October 12, 2022 was: “We are aware of the exclusion of certain schools and records due to the redaction process. We are working to publish new assessment results as soon as possible for the field.”

The results were first published on September 7, 2022 and three months later there are no updates…Why?

𝐍𝐨 𝐀𝐙𝐌𝟐 𝐓𝐞𝐬𝐭 𝐑𝐞𝐬𝐮𝐥𝐭𝐬 𝐟𝐨𝐫 𝐓𝐡𝐨𝐮𝐬𝐚𝐧𝐝𝐬 𝐨𝐟 𝐏𝐫𝐞𝐧𝐝𝐚 𝐌𝐢𝐜𝐫𝐨-𝐒𝐜𝐡𝐨𝐨𝐥 𝐒𝐭𝐮𝐝𝐞𝐧𝐭𝐬 𝐑𝐞𝐜𝐞𝐢𝐯𝐢𝐧𝐠 𝐌𝐢𝐥𝐥𝐢𝐨𝐧𝐬 𝐢𝐧 𝐓𝐚𝐱 𝐅𝐮𝐧𝐝𝐬

Prenda Inc. is a for-profit “micro-school” that uses paid parent “guides” as teachers and has its own curriculum, that was not approved by the Charter Board. Prenda enrolls students at EdKey Sequoia Choice charter school so EdKey can collect $8,000 from the state for each Prenda student, with EdKey kicking back $4,000/pupil to Prenda, totaling nearly $20 million for 2022. EdKey provides no curriculum or instruction to Prenda students – its only responsibility is to administer state testing to Prenda students.

EdKey Sequoa Choice has its own online and in-person K-8 students, along with micro-school students from Prenda, Venture Upward, and Arizona Learning Communities. But the 2021 AZM2 state test results do not tell us how students in each of these programs did in 2021.

When we questioned the Department of Education, Deputy Associate Superintendent of Assessment Andrea Ahumada replied:
“ADE only collects enrollment data for students, we do not collect specific programs students are enrolled in or participate in within a school. Therefore, ADE is not able to disaggregate data in this way. Thank you.”

The AZM2 results show that 62% of Sequoia Choice students were tested and 36% were proficient in English and 20% were proficient in Math. How did the Prenda students do with no teachers using an online program that was not approved by the Charter Board? We have no idea. We notified ADE of this concern when the tests were being administered, but they did not see fit to track the achievement of micro-school students.

We do know that $ millions in state funds were transferred to private micro-schools with no accountability for both the use of public funds and the achievement of students.

𝐓𝐡𝐞 𝐄𝐝𝐊𝐞𝐲 𝐒𝐞𝐪𝐮𝐨𝐢𝐚 𝐂𝐡𝐨𝐢𝐜𝐞 𝐒𝐜𝐡𝐨𝐨𝐥 𝐁𝐨𝐚𝐫𝐝 𝐦𝐞𝐭 𝐟𝐨𝐫 𝟑 𝐦𝐢𝐧𝐮𝐭𝐞𝐬 𝐭𝐨 𝐚𝐩𝐩𝐫𝐨𝐯𝐞 𝐭𝐡𝐞𝐢𝐫 $𝟒𝟗 𝐦𝐢𝐥𝐥𝐢𝐨𝐧 𝐅𝐘𝟐𝟐 𝐛𝐮𝐝𝐠𝐞𝐭 𝐭𝐡𝐚𝐭 𝐤𝐢𝐜𝐤𝐞𝐝 𝐛𝐚𝐜𝐤 𝐨𝐯𝐞𝐫 $𝟐𝟎 𝐦𝐢𝐥𝐥𝐢𝐨𝐧 𝐭𝐨 𝐟𝐨𝐫-𝐩𝐫𝐨𝐟𝐢𝐭 𝐦𝐢𝐜𝐫𝐨-𝐬𝐜𝐡𝐨𝐨𝐥𝐬.

Anyone who has attended a district school board meeting knows just how long they go on to complete the business of the district – approving all expenditures for the month, hiring, firing, policies, contracts, construction, etc.

We have pointed out for years that charter school boards have no relationship to district school boards because, by law, they only set policy. All operational decisions are made in secret at corporate board meetings.

EdKey Sequoia Choice Arizona Distance Learning (ADL) is a great example. ADL has become one of the largest charter companies in the state by “hosting” micro-school students from for-profit Prenda Inc. and other “partners”. ADL enrolls the micro-school students to receive $8000/pupil in state aid and then kicks back $4,000/pupil to Prenda. The Prenda kids don’t use the ADL online program or ADL teachers – they simply rely on ADL to funnel state funds to them. A sweet deal for both.

The ADL budget has increased from $6.7 million in 2020 to over $49 million in 2022 because of the Prenda windfall. The Sequoia Choice school board met five times between July 2020 and July 2021 and never once discussed the partnership with Prenda. In fact, the ADL school board met for a total of just 30 minutes in the five meetings:

* July 9, 2020 - Approved FY 21 Budget (Budget increased from $6.7 million in 2020 to $14.5 million in 2021) and changing name of Verrado Way campus. Meeting time:𝟏𝟎 𝐦𝐢𝐧𝐮𝐭𝐞𝐬

* August 26, 2020 - Approved Covid Benchmarks, Mitigation Plan, wearing face masks. Meeting time: 𝟏𝟎 𝐦𝐢𝐧𝐮𝐭𝐞𝐬

* September 3, 2020 - Approved allowing online students to participate in athletics, Meeting time: 𝟓 𝐦𝐢𝐧𝐮𝐭𝐞𝐬

* June 22, 2021 - Approved Proposed FY22 Budget (Budget increased from $14.5 million in 2021 to $49 million in 2022). Meeting time: 𝟐 𝐦𝐢𝐧𝐮𝐭𝐞𝐬

* July 8, 2021 - Approved FY22 Budget, creating a member campus at Summit Church until new school built. Meeting time: 𝟑 𝐦𝐢𝐧𝐮𝐭𝐞𝐬

There is no attempt to even appear to have transparency in the only public meetings of this charter school. How can these be public schools when the public is completely shut out of all decision making?

Large charter companies like EdKey treat school board meetings like a joke. The Legislature needs to simply require charter school boards to also be responsible for the operational decisions of the school so, in the case of ADL, there is public access to the decisions to expend of nearly $50 million in state funds, much of which is being siphoned off to private micro-school companies.

𝗖𝗵𝗮𝗿𝘁𝗲𝗿 𝗦𝗰𝗵𝗼𝗼𝗹 𝗧𝗲𝗮𝗰𝗵𝗲𝗿𝘀 – 𝗠𝗮𝗸𝗲 𝘆𝗼𝘂𝗿 𝘃𝗼𝗶𝗰𝗲𝘀 𝗵𝗲𝗮𝗿𝗱 𝗶𝗻 𝗵𝗼𝘄 𝗺𝗶𝗹𝗹𝗶𝗼𝗻𝘀 𝗶𝗻 𝗖𝗼𝘃𝗶𝗱 𝗳𝘂𝗻𝗱𝘀 𝗮𝗿𝗲 𝘀𝗽𝗲𝗻𝘁

Arizona schools will directly receive $3.8 BILLION in Covid relief funds in the ESSER I, II, and III programs that must be expended by September 30, 2024. The large districts will receive massive wind-falls - Tucson Unified $267 million, Mesa Unified $245 million, and Phoenix Union $173 million. All district expenditures must be approved in open board meetings and must follow all state procurement laws to assure the funds are properly allocated.

Some large charter chains are also receiving a huge influx of funds:
* Academy of Mathematics and Science Inc. $40,792,083
* Leona Group $34,419,489
* Legacy Traditional $32,313,656
* Imagine $30,363,781
* EdKey $19,957,192
* AZ Community Development,
Heritage Elementary, Liberty Traditional $13,470,354
* Great Hearts. $12,024,095
* PPEP (Arizona Virtual Academy K-12) $11,423,020
* ASU Prep. $7,996,847
* Daisy (Sonoran Science) $7,002,516

But what will happen to the millions of dollars allotted to charter schools? The large charter chains approve expenditures in corporate board meetings, not in the “school board” meetings where state law says only policies have to be approved. Charter schools are exempt from state procurement laws allowing them to divert funds to owners and related party companies without bids or disclosure. Charter teachers and parents have no voice in these matters.

Federal regulations require schools receiving ESSER funds to create an expenditure plan developed with input from all stakeholders - teachers, staff, parents, unions, special education advocates, etc. This may be the one time since charters were established in Arizona in 1994 that teachers and parents can actually have input into how a charter school expends funds.

We urge all charter teachers to make sure your school holds the required public hearings for the expenditure of ESSER funds and that you encourage your colleagues and parents to be involved. Make sure these millions of dollars go to support children’s education and not corporate profits.
(See: azcsa.org for the ESSER allotment for your school and Federal rules about ESSER stakeholder input)

𝗧𝗵𝗲 𝟮𝟬𝟮𝟭 𝗔𝗭𝗠𝟮 𝗧𝗲𝘀𝘁 𝗥𝗲𝘀𝘂𝗹𝘁𝘀 𝗔𝗿𝗲 𝗜𝗻𝘃𝗮𝗹𝗶𝗱 – 𝗡𝗼𝘁 𝗝𝘂𝘀𝘁 𝗕𝗲𝗰𝗮𝘂𝘀𝗲 𝗼𝗳 𝗖𝗼𝘃𝗶𝗱 𝗗𝗶𝘀𝘁𝗮𝗻𝗰𝗲 𝗟𝗲𝗮𝗿𝗻𝗶𝗻𝗴

* Scottsdale Online Learning in the Scottsdale Unified District had 59% of students pass the AZM2 English Language Assessment (ELA) while the state average was only 36% passing. Wow! The problem is only 36% of eligible students at Scottsdale Online took the AZM2 test last spring.
* One of the top schools in the state, magnet University High School in Tucson, had an amazing 85% of student pass the ELA…too bad only 7% of students took the test.
* Arizona Connections Academy, one of the largest charter online companies, had 44% pass the AZM2 English assessment but only 31% of their students took the test.

Standardized testing is based on certain parameters that are required of all schools – everyone got the same test at the same time last year, for example. We also assume that schools test at least 95% of students, as required by Federal law. But Arizona received a waiver from the Department of Education last year to not require 95% of students to be tested. As a result, the AZM2 test was not “standardized”, with some school testing less than 10% of students. Comparing schools and districts or stating state averages is now impossible unless one considers how many students each school tested.

Which kids came to school to take the test in person? Did the good students show up to take the test…or the poor, minority, and at-risk students that might not have technology and transportation?

Overall, 54 schools that beat the 36% state average ELA score tested less than 85% of their students, rather than the 95% that is usually required. 21 schools that look like they are above the state average in English tested less than 60% of their students.

There are some real questions as to why testing numbers were so low. For example, Cesar Chavez High School in Phoenix Union only tested 16% of students while other PUHSD schools - Maryvale, Trevor Brown, and South High Schools tested 75% of students. Tucson Unified Sahuaro High School only tested 6% of students and Pueblo High School only tested 15% of students.

There is no way the 2021 AZM2 test results should be used for school-to-school comparisons. No meaningful standardized data is acquired by testing the kids that just happened to show up. Like baseball records comparing modern and historic achievements, there needs to be an * on all 2021 AZM2 test results that acknowledges that some schools tested very few of their students.

𝐒𝐭𝐢𝐦𝐮𝐥𝐮𝐬 𝐌𝐨𝐧𝐞𝐲 𝐏𝐫𝐨𝐯𝐢𝐝𝐞𝐬 𝐚 𝐌𝐚𝐬𝐬𝐢𝐯𝐞 𝐖𝐢𝐧𝐝𝐟𝐚𝐥𝐥 𝐟𝐨𝐫 𝐂𝐡𝐚𝐫𝐭𝐞𝐫 𝐒𝐜𝐡𝐨𝐨𝐥𝐬 – 𝐖𝐡𝐞𝐫𝐞 𝐰𝐢𝐥𝐥 𝐢𝐭 𝐚𝐥𝐥 𝐠𝐨?
(Full Report and database of ESSER funding for all charters and districts at: azcsa.org)

A charter owner that only spends half of state revenue to run his schools and spends the rest buying luxury homes in North Peoria is getting $2.7 million in stimulus funds. Three large charter chains that spend more on administration and real estate than in the classroom will receive an additional $30 - $40 million each. Is there any reason to believe that this windfall will really go to help educate children?

Stimulus funds to schools were provided in three separate packages known as the Elementary and Secondary School Emergency Relief plan (ESSER) – ESSER I, ESSERII, and ESSER III. The funds were allocated on the poverty level of each district/charter school based on Title I funding levels for the schools. Over $3.9 BILLION was allocated to the state to disperse to Arizona public schools to be used to offset the costs of the pandemic and assure that students catch up in missed learning caused by the shutdown. Schools have until 2024 to expend the funds.

Schools can use the funds for almost anything including buying computers, making repairs, remodeling, and even new construction. There is great concern about the accountability for these funds, especially for largely deregulated charter schools.

Of special concern is the massive windfall that three large charter chains will receive that spend more of their revenue on administration and real estate than in the classroom:
- The Leona Group will receive $34.4 million in ESSER funds, but only spent 25% of their revenue in the classroom in 2020.
- Imagine Schools will get $30.3 million but spent $1000/pupil more on real estate and administration than in the classroom in 2020 than the average charter school.
- The Academy of Math and Science leads all charter schools with $40.7 million in ESSER funds and spent $1000/pupil less in the classroom than on management and facilities in 2020.

Even worse, the three schools operated by Steven Durand (Educational Options, James Sandoval, and AIBT Charter schools) will receive $2.7 million in ESSER funds. Mr. Durand spends less than half of his schools’ revenue every year to run the schools, the rest going to increase the assets of his non-profits (so they can buy luxury homes). In today’s market, $2.7 million may only allow Durand to purchase a single new mansion to add to his collection. (See one of Durands "school sites": https://www.redfin.com/AZ/Peoria/6710-W-Calle-Lejos-85383/home/27091278)

Most charters are receiving huge windfalls as well, with charter schools collecting over $495 million in ESSER funds. There does not appear to be any oversight planned to assure that these funds go to teachers and kids and not into corporate profits or real estate equity.

All schools will be required to submit a plan for how ESSER funds will be expended, but it is unclear if the state will require a detailed accounting of expenditures. It hard to imagine how the understaffed School Finance department at ADE will even read the plans, let alone monitor spending. School districts at least must have all expenditures approved by an elected governing board in public meetings, while charter schools can make all financial decisions in private corporate board meetings with little accountability by the Charter Board, ADE, or the Auditor General.

Where will the charter schools that spend more money on administration and real estate than in the classroom expend their newly found wealth? Arizonans for Charter School Accountability calls on ADE and the Auditor General to require a detailed accounting of all ESSER funds, especially for charter schools that have a history of diverting funds into owner’s pockets.

2019 Public Elementary-Secondary Education Finance Data

𝐀𝐫𝐢𝐳𝐨𝐧𝐚 - 𝐒𝐭𝐢𝐥𝐥 𝐭𝐡𝐞 𝐋𝐨𝐰𝐞𝐬𝐭 𝐏𝐮𝐛𝐥𝐢𝐜 𝐄𝐝𝐮𝐜𝐚𝐭𝐢𝐨𝐧 𝐒𝐩𝐞𝐧𝐝𝐢𝐧𝐠 𝐢𝐧 𝐭𝐡𝐞 𝐔𝐒
The U.S. Census just released the 2019 Annual Survey of School System Finances and, despite the additional money the Legislature allotted for teacher salaries in 2018, Arizona is at the bottom of nearly every category of revenue and spending for public education - still.
Our Governor and Legislature’s response is to cut taxes. If we were only a more progressive state – like Mississippi. The low lights: https://www.census.gov/data/tables/2019/econ/school-finances/secondary-education-finance.html
2019 Per Pupil Rank U.S Average Arizona
Total Revenue 49th $15,656 $10,314
State Revenue 47th $7,309 $4,371
Local Revenue 34th $7,142 $4,618
Instruction 51st $7,963 $4,705
Salaries 50th $4,996 $3,225
Benefits 50th $2,206 $1,022
General Admin . 44th $257 $152
School Admin. 51st $738 $403

2019 Public Elementary-Secondary Education Finance Data View and download 2019 Public Elementary-Secondary Education Finance Data tables.