SECTION 5

Accountability to Others

Archived Informaiton

Because of their unique level of freedom to partner with nonprofit
organizations and to hire outside vendors, and because they are
generally left to their own devices to find and finance their own
buildings and administer their own funds, charter schools establish
voluntary relationships with a set of actors not normally a part of the
public school accountability equation. Charter schools depend on these
new actors to varying degrees. Charter schools that have close ties to a
sponsoring school district, for instance, tend to rely less on
independent actors, as the district provides the majority of their
services.

And due to their unique level of autonomy and their controversial
political status, charter schools also often have many involuntary, or
(to return to our terminology from section 1 of this report) one-way,
accountability relationships with political interest groups and with
government agencies other than their authorizers. These relationships
can impose burdens not anticipated either by the legislators who
sponsored state charter laws or by groups that now operate charter
schools.

In our case studies of charter schools, we approached the question of
accountability to these independent actors hoping to learn about how
these new relationships have affected the school's priorities and
performance, and in particular whether they distracted from, or
reinforced the school's focus on instructional quality and student
performance.

We have found that:

-   Charter schools are more dependent on outside entities than are
    traditional schools. While traditional schools are increasingly
    building relationships with outside organizations, charter schools
    generally have no option but to build new relationships outside a
    district or state central office.

-   While there are clearly both advantages and risks to this reliance
    on outside entities, such voluntary and reciprocal relationships can
    strengthen the school's academic performance and its internal
    accountability if the school has strong leadership. Involuntary and
    one-way relationships with outside entities, however, can seriously
    threaten a school's ability to develop internal accountability.

-   Involuntary and one-way relationships with outside entities,
    especially government enforcement agencies whose role vis a vis
    charter schools has never been clearly defined, can seriously
    threaten a school's ability to focus on teaching and learning.
    Pressures from regulatory agencies can eclipse a charter school's
    relationships with parents, teachers, and even its authorizing
    agency.

We will discuss in more detail each type of association and its
implications for charter school accountability.

####### Voluntary Associations: Accountability to Funders, Service Providers, and Evaluators

Unlike traditional public schools, which depend on their local school
district central offices for virtually everything---funding, staff,
facilities, teacher training, equipment, supplies, building repairs,
janitorial service---charter schools must obtain many essential goods
and services for themselves. Education management companies (such as the
Edison Schools) and outside funders normally work directly with school
districts, thus buffering individual schools from direct accountability.
Such external funders and providers, however, contract directly with
charter schools. These voluntary relationships create mutual benefit and
dependency between charter schools and many other entities that
heretofore played little or no role in public education.[^1] These
relationships vary in their intensity and in their impact on the
school's financial or academic operations. But in their strongest forms,
they can have a powerful effect on a school's priorities and actions.

Many such providers have real influence on charter schools. They include
donors, lenders, contractors, charter school associations, and
evaluators. Many of them can play positive roles in promoting schools'
internal accountability. For example, lenders, including groups set up
to advance money to charter schools and other social service
organizations, often demand clarification of charter schools' governance
structures and require higher accounting standards than charter schools
might otherwise follow. Other providers may have philanthropic motives
and care less about administrative standards than about good educational
performance. However, such providers, including private individuals who
may donate legal or management services, can become discouraged if a
charter school appears conflict-ridden, chaotic, or ineffective.

Some of these relationships can influence the school's internal
operations and therefore indirectly promote strong internal
accountability as discussed in section 2 of this report. Others can more
directly offer stronger checks and balances to assure that the school is
financially, organizationally, and educationally viable.

##### Charter Schools' Key Voluntary Relationships

Charter schools' key internal and external voluntary relationships
include donors, lenders, contractors, associations, and evaluators.

# Donors

**Partner organizations:** Community nonprofit organizations such as
youth centers, YMCAs, and museums can establish or help charter schools
as one of their programs. Many of these organizations are nonprofit
human service providers that have been around for a while, have a good
reputation for their social service work, and see a connection between
running a school and providing some kind of social service. Indeed,
their reputations make them attractive candidates for running charter
schools.

Some such organizations may assist the school rather than taking legal
responsibility for it. But their association with the charter proposal
is often a selling point for the authorizer, as well as for parents. The
agendas of these organizations certainly influence what schools become.
Their organizations' administrative and financial strengths also help
schools do things that freestanding new charters have a hard time doing,
such as obtaining grants and bank loans.

**Organizations that provide space and facilities:** Organizations can
provide space and facilities for charter schools. These can be simple
landlord-tenant relationships or sometimes the landlord can be a *de
facto* sponsor, providing space at reduced cost or free. One school we
visited is developing a facilities partnership with a state university.
The university will provide land to the school and the school will build
and own its own building. The university now has a stake in the school's
reputation and its financial viability.

**Groups that donate goods and services:** Local businesses and church
groups are among those that often donate supplies and services to
charter schools. These may be temporary relationships, and the total
resources donated may not be large, but the sense of obligation may be
significant. Charter schools tend to rely more on volunteer goods and
services than traditional public schools. These relationships could be
very important if the donations are continuing or are subject to
termination (i.e., if the school is in donated space and might be kicked
out, or if a clinic provides a nurse but might withdraw her).

**Sources of private or government grants:** Grant funding is a
significant source of income for many charter schools. In Massachusetts,
for instance, charter schools depend on private grants or donations for
as much as 37 percent of their operating budgets,[^2] whereas public

schools often receive no grant funds. These private sources use some
judgment in deciding whether to fund a school initially and whether to
continue that funding. Charter schools we interviewed viewed private
funding sources as involving less paperwork but just as much, if not
more, accountability for promised results.

Grants, especially from government agencies, also sometimes impose
judgment on schools and are competitive. However, some schools, charter
or others, purposefully stay away from government grants (such as Title
I) for which they would be entitled, because they eschew more government
involvement than they already have and want to avoid any more hassles
with paperwork. Their goal is to stay as autonomous as possible.

# Lenders

**Sources of long-term financing (i.e., banks, bonding authorities):**
More and more charter schools are borrowing funds for capital expenses
and other high costs. Banks and other sources of such funding are
becoming increasingly open to the idea of lending to charter schools.
While these organizations are not primarily concerned with the school's
academic progress, those who lend money to a school want to see evidence
that the school's leadership, governance structures, and relations with
its sponsor are stable. A charter school in Colorado, for example,
recently received a BBB rating for bonding due to its stability.[^3]

# Contractors

**School design organizations that manage the instructional program:** A
growing number of charter schools contract with vendors (e.g., SABIS
International; the Edison Schools, Inc.; Beacon Education Management,
Inc.; National Heritage Academies).[^4] As managers of the school's
instructional program, they influence or directly control hiring,
instructional plans, budgets, self-assessment, and relationships with
parents. Because some charters specify a relationship with a particular
contractor, the school's board can find it difficult (though obviously
not impossible) to abandon such an arrangement. In turn, these companies
have obligations to their administration and investors, creating several
levels of interdependency that may or may not conflict.

**Providers of legal advice and insurance:** Providers of legal advice
and assistance influence what schools can do and what risks they must
eliminate. These actors do not hold any direct power over the school,
but they are important in that they can help the school understand and
comply with its legal duties. Traditional public schools are not
typically distinct legal entities, thus legal and insurance issues are
normally managed at the district level.

**Service providers:** Schools and their sponsors are increasingly
hiring outside contractors to provide services that districts typically
provide. These services range from accounting services to inspectors who
assess the school's educational progress. These third party arrangements
can introduce a new level of objectivity into the typical
school-district relationship and therefore changes the nature of how
school accountability functions. Some schools use private organizations
for financial management, but since they focus strictly on accounting,
few have tried to influence the instructional practices of their client
schools.

# Associations

**Charter school associations and technical assistance organizations:**
In most states, charter schools can turn to charter school associations
or technical assistance organizations for advice and support. These are
voluntary associations, but since they help schools learn from one
another's experiences with authorizers and unions they create mutual
dependencies. Often, charter schools see their reputations bound to
other charter schools in the state or community, leading to a desire to
help other schools succeed.[^5] As a result, some associations are
creating self-assessment and accountability models that will influence
schools' relationships with their authorizers. These organizations also
frequently influence state laws and rule making, so schools both depend
on them and need to influence them.

# Evaluators

**Accreditation agencies:** Many states require or encourage schools to
receive accreditation from an established group such as the North
Central Association of Colleges and Schools. Schools often seek
accreditation on their own because it allows their students to transfer
credit more easily between schools and is more easily understood by
colleges and universities. These accreditation bodies vary in the ways
they judge schools. Some are much more "input" oriented than others, in
that they look to see whether schools are offering required courses
rather than trying to assess how well a school is teaching its courses.
These agencies or the individuals who visit the schools, often have
particular ideas about "good" instruction, which may not mesh with the
school's philosophy. In some cases, these organizations provide a valued
outside perspective on the school's educational program. Thus,
accreditation agencies can play an important role in helping or
hindering schools' internal accountability as well as serve as an
intermediary source of judgment for authorizing agencies.

**Researchers:** Most charter schools host researchers on a regular
basis. The principals, teachers, students, parents, governing board
members, and others at these schools are interviewed by analysts working
on state, federal, and independent projects; graduate and even high
school students; and researchers from other countries. One school we
visited hosted more than 100 visitors in 1999 alone. Not all of these
researchers intend to pass any judgment on the school. Many are simply
there to get ideas or amass information. But some visits are very high
stakes evaluations. A negative portrayal in a public report threatens a
school's future enrollment and may affect a school's relationship with
its sponsor. Some schools use researchers to validate their efforts,
build support elsewhere, countervail critics, and buttress themselves
against members of the authorization agency who do not like them.

**School design networks:** When a school management organization runs
several schools in an area, there is the possibility of close ties
between school directors, who can provide each other with resources and
ideas. More informal networks are made up of voluntary school designs,
such as New American Schools designs or the Coalition of Essential
Schools. These networks can have a positive effect on accountability
when the network of peers sets expectations for a school to go beyond
the requirements of its sponsor in developing and using good indicators
of success. With increasing pressure for school design networks to prove
their success, this trend should be a positive force for encouraging
schools' internal accountability. These networks can be a more subtle
force for performance accountability than can authorizers. They can
offer assistance and encouragement for self-assessment and school
improvement without making the threat of charter cancellation that is
always implicit in a school's relationship with its authorizer.

##### How Do These Accountability Relationships Affect Schools?

Such outside organizations can play a significant role in the lives of
charter schools, particularly in new schools and schools authorized by
entities other than local school boards. (Conversion schools and schools
authorized by school boards usually have close legal ties to districts
and are not discreet legal entities.) We tried to assess the effects of
these relationships: How have they influenced instruction, resource
allocation, or student selection in ways that might have a positive or
negative effect on school quality or equity?

Accountability to outside organizations is one of the more controversial
elements of the new accountability arrangements under which charter
schools operate. The public and politicians often fear that by opening
schools up to diverse interests, especially those with profit motives,
schools will be less focused on the public interest of improved student
learning and high quality instruction. Wells and Scott[^6] (1999) argue
that there is inherent inequity built into charter schooling because
governing bodies vary in their ability to monitor the performance of
contractors. They argue that this puts under resourced schools at a
disadvantage because they are the schools least likely to have the time
and resources needed to oversee such contractors. The executive vice
president of the American Federation of Teachers has raised concerns
about school choice models that transfer authority away from the
government and locally elected school boards and give that authority to
groups that are not accountable to the people.[^7]

As we learned from our case studies there are both positive and negative
sides to charter schools' dependency on outside organizations. Whether
the effect is primarily positive or negative is largely determined by
the strength of the school's governing board---how seriously it takes
its role, how sophisticated its members are, how the management
company's contract is structured, and so on.

We saw no evidence to suggest that on the whole, encouraging schools to
form outside relationships necessarily detracts from the quality of
instruction provided or the ability of faculty and staff to concentrate
their attention on teaching and learning. In fact, we saw several
instances of outside organizations having a beneficial effect on
school's performance and internal accountability.

While we have seen variation in schools' capacity to manage contractors,
we did not see that the ability to manage contracts had any relationship
to the types of population served by the school or the school's per
pupil operating revenues. Variation in capacity is a real issue, but as
other studies have found, we have seen that capacity of the school
leadership and governing board are closely related to prior experience
running schools and having access to community resources.[^8] Approving
agencies can lessen the likelihood of this being a problem by creating
rigorous approval processes and intervening in schools that are failing
as a result of poor management. Technical assistance organizations and
charter school associations can also play critical roles here by helping
schools understand the tradeoffs involved in contracting for services
and by providing training and guidebooks on this topic for new schools.

**Potential positive effects of voluntary associations.** This
unprecedented level of dependency on outside actors can have a
beneficial effect on schools' efforts to develop strong internal
accountability. Donors and sources of assistance can help a school
increase its capacity to provide good instruction; they can also become
sources of constructive pressure for continuous improvement. Depending
on the circumstances of an individual school, schools' accountability to
donors and sources of assistance can:

-   Strengthen forces for performance and organizational viability more
    than a school's relationships with its authorizer.

-   Provide critical expertise and access to resources.

-   Provide political connections that buffer the school from attacks
    that would otherwise dominate staff time and attention and weaken
    their focus on instruction.

-   Increase schools' access to facilities, and develop innovative ways
    of housing charter schools.

**Strengthening forces for performance and organizational viability**.
As we discussed in previous sections, authorizing agencies often play an
insignificant role in prodding schools to work toward academic
improvement. Much more powerful influences are those closest to the
school's governing board.

One school we visited is funded in part by two well-known organizations
(one for-profit, one nonprofit) and the representatives of those
organizations sit on the school's governing board. Because these
organizations' reputations are intimately tied to the school, school
leaders feel constant, strong pressure to maintain the school's image as
an excellent place for children to learn. Partners care about their own
reputations and feel the school's performance reflects on them. In
contrast, the school's authorizing agency seems much less concerned with
the school's performance, and parents at the school are interested
mainly in their own child's performance, not that of the school as a
whole.

For-profit management companies are especially scrutinized by
researchers and have an extra incentive to demonstrate their success and
remain marketable. It was beyond the scope of our study to assess the
effectiveness of education management companies (EMOs), but in our
sample, the schools we visited that were managed by EMOs had some of the
clearer accountability agreements and tended to be more willing than
most charter schools to be judged on standardized test scores. In the
box below, we explore some of the accountability issues related to
for-profit management of charter schools.

One Arizona charter school's leader explained that the school's
accountability is validated via a regional certification group. Their
charter authorizer is little more than an annoyance and certainly does
not appear to be adequately monitoring the school's progress, or
prodding the faculty to improve their practice. When asked if he could
do as good a job, or better, if you were left alone, the director
responded, "I believe so, we have an internal motivation to validate
what we do against external standards."

####### A Closer Look at Education Management Organizations

Educational management organizations (EMOs), sometimes called management
companies or service providers, are becoming increasingly common. EMOs
range from those that provide specific, prescribed services such as
payroll and financing (*narrow* providers) to those that are responsible
for virtually every aspect of a charter school's operations (*broad*
providers). Depending on the depth of their involvement, EMOs charge
fees as small as a few percent of a school's operating budget to fees
that encompass the school's entire budget. For the most part, *narrow*
providers seem likely to increase a school's capacity to manage and
account for funds, but do not usually affect the school's organizational
viability or educational effectiveness outside of their narrow domain.

Broad EMOs, on the other hand, can have a more significant impact on a
school's overall operations and academic responsibilities. Two examples
illustrate the benefits, and potential risks, of broad EMOs. We visited
an Arizona school that is one of several schools operated by the Leona
Group, a large EMO operating primarily in Michigan and Arizona. The
network of schools created by this EMO offers a unique benefit for
information sharing and support. School leaders of all the Leona schools
meet regularly, and are able to gain assistance in their work from one
another as well as Leona staff. Leona staff and school leaders also
visit each school from time to time to offer feedback and evaluation.

Some decisions regarding the school are made within the school itself
(e.g., hiring and some curriculum decisions), while others are made at
the Leona corporate office (including budgeting, hiring of the school
leader, and some curriculum decisions). All the Leona schools are based
on a single charter, with one governing board. From the perspective of
Leona's authorizer, Leona is a well-respected organization seen as
running solid schools. The school we visited had significant problems
during its first year. By all accounts, the school was in complete
disarray academically and organizationally. Leona staff replaced the
principal when the school moved to a new location and began to expand.
Since this change, the school has essentially been reinvented and has
gone through some of the same struggles as other new charter schools,
including last minute hiring. Throughout these struggles, the Arizona
Charter School Board has left it to Leona to intervene. Although the
school files compliance and academic reports directly to the state, the
school's authorizer monitors the school less closely than others due to
the staff's trust in Leona.

In Michigan, we visited a school that is operated by the National
Heritage Academies (NHA), an EMO with a back-to-basics and moral
education focus. In the 1998--99 school year, NHA operated 13 charter
schools in Michigan. As with Leona, NHA school leaders meet regularly
and discuss problems and policy issues facing their schools. Each NHA
school has its own charter contract, its own governing board, and
controls many of the day-to-day decisions, including hiring. NHA owns
each school's building and materials, and all staff members are
employees of NHA rather than of the governing board. Broader issues such
as the general curricular tools and the budget are made by NHA, which
also sets policy for all its schools in a variety of areas. In this
situation, it is not surprising that there has been some tension between
the school's governing board and NHA over who makes what decisions.

These two examples illustrate several issues surrounding broad EMOs. The
close connection between these two schools and their management
organizations means that there is a strong sense of accountability by
the school personnel especially the school leaders to the larger
organization. Both Leona and NHA have a much richer understanding of
what is happening in a school than does the school's authorizing agency.
The sense of accountability among the school leaders is particularly
strong. They meet regularly, jointly work out issues regarding policies,
and generally see their schools as part of a larger whole. Individual
schools feel that their successes or failures will reflect back on the
other schools and the EMO headquarters.

However, there are some potential tradeoffs to these relationships.
First, schools may be less likely to develop a strong sense of internal
accountability when they do not control their own budget and curriculum.
Second, authorizers who have a positive opinion of an EMO may be less
likely to look critically at each school affiliated with that EMO during
both the application and oversight processes. We have little evidence to
prove or disprove either possibility, however they are worth mentioning
as areas for future study and caution.

**Providing critical expertise and access to resources.** At least two
independent organizations are playing prominent roles in assessing the
quality of charter schools. The Colorado League of Charter Schools, the
Colorado state charter school association, is currently piloting a new
self-assessment and accreditation tool for Colorado charter schools. For
participating schools, the League will send out a peer review team to
develop "unique measures" of a school's success and create a 3--5 year
review process. The intent is to serve a "critical friends" role for
schools and also to provide good information to boards of education. The
League's effort is in part to protect against perceived laxity on the
part of local school boards to require high standards, especially for
the renewal of school charters.

The Illinois Facilities Fund (IFF), a nonprofit loan funded by the
Chicago Public School District, provides long-term loans to Chicago
charter schools. In partnership with the Chicago School District's
charter schools office, the IFF assesses governance viability of charter
school applicants and then provides assistance and continuing counseling
to the schools.

Organizations that publicly support a charter school by lending money or
partnering in other ways described above care a lot about how the school
is perceived by the community, whether that perception is shaped through
newspaper articles or simply via word-of-mouth. These organizations have
an interest, then, in at least appearing to give back to the community.
They are often on the watch for cries of elitism, for instance, and so
tend to go out of their way to serve diverse populations and to keep the
funding level of the school to a level that could be matched by other
public schools. High profile or controversial schools are more likely to
be subjects of studies and visits by people who are looking for models
for new schools or parents who are shopping for schools. These visitors
add an extra element to accountability. Despite this constant stream of
visitors, our researchers' requests for interviews were never turned
down at schools with links to for-profit or nonprofit organizations.

Charter schools are often started by groups of parents who have little
background in education or by teachers who have little in the way of
business expertise. Unless these schools partner with nonprofit
community groups or hire outside expertise, they often face difficult
barriers to success in creating effective schools. Schools we visited
benefit greatly from expertise provided by their partner organizations.
These organizations provide help by sending staff members to the school
as guest lecturers, lending the school a business advisor, and providing
space for the school. Older nonprofit organizations often have
experience building effective boards and creating lines of
accountability within an organization. That experience, partnered with a
promising educational approach can create a very effective school.

Moreover, a for-profit management company's substantial financial
backing may offer schools access to loans for school startup and the
ability to offer new or substantially renovated schools to students and
parents, luxuries not available to most new groups. Though it is no
guarantee of success, having access to these resources means a new
school is more likely---and better able---to quickly focus on student
learning.

**Using political connections to buffer the school.** As earlier
sections have suggested, the local and state politics associated with
being a charter school can be intense. Local and state agency personnel
may try to require compliance with laws from which the school should be
exempt, and an angry sponsoring school district may encourage fire
marshals or building inspectors to give a new charter school a
particularly difficult time with approval of its facility.

Outside organizations often have strong community ties that help a
school stay focused on teaching and learning rather than spending time
on appeasing a variety of external relations. A charter school with
political connections through outside organizations is much better
positioned to fight off spurious, politically motivated demands. In the
traditional public school system, such political connections would
likely be limited to schools in advantaged neighborhoods with
high-powered parents. Charter schools' ability to work with outside
organizations can lend that advantage to schools with less access to
such power sources.

Increasing access to facilities. Charter schools most often must pay for
their facilities costs out of the operating budgets. Facilities-related
costs are often cited as the primary barrier to charter school startup.
The negative consequence is somewhat obvious: rent costs money that
schools then cannot spend on instruction. Rental costs keep some schools
with promising educational ideas, but no access to appropriate
facilities, from opening.

Partnerships with existing organizations often allow new schools with no
ability to float long-term bonds or to pay for up-front renovations
access to partner-owned facilities and capital for renovations. These
partnerships also help educators to use imagination about what
facilities can be used as schools. The few states that are now providing
charter schools with capital moneys are seeing similarly positive
results. In Arizona, the Goldwater Institute hosted a conference to
bring together land developers and architects with charter school
founders. Several innovative new partnerships have since developed.

**Potential downsides of voluntary associations.** Despite the very real
advantage that chartering opens up to public school children by allowing
and encouraging new schools to link with actors that operate outside the
traditional public school establishment, this experiment---like
any---comes with risks. In some circumstances, a heavy dependence on
outside actors can:

-   confuse lines of accountability and decisionmaking,

-   detract from the school's core mission, and

-   attract unwanted attention.

**Confusing lines of accountability and decisionmaking.** School
governance is fragile. Its strength depends on the cohesiveness and
focus of school leadership. When a school contracts with a management
company, partners with a university, or takes a loan, each of these
actions increases the sheer number of people who are providing input as
to how the school ought to function.

More people involved in a school's operations also increases the
potential for obscured responsibility and for disagreement. A school's
approving agency, for instance, may be unclear whom to call if there is
a problem. Parents may be unsure whom to contact if they have a
complaint. A governing board may have trouble giving up control and may
begin to interfere with a contractor's responsibilities or---equally
problematic---may put too much trust in a contractor and not hold the
organization responsible for its promises. The more complex the
governance, the more difficult it becomes to establish clear lines of
authority and accountability.

Contractors do not always use the same measures to judge school success
as the governing board, teachers, parents, or the authorizing agency.
Accreditation agents may or may not judge the school in ways that are
consistent with the performance goals outlined in the school's charter.
Financial lenders may be more concerned with financial stability than
school improvement. Media attention as a result of a high-profile
partner relationship may highlight controversy rather than communicate
the strong points of a school.

Alliances with outside organizations can also complicate accountability.
Some school governing boards hire professional management companies,
including for-profit organizations like the Edison Schools and SABIS, to
run the school on a day-to-day basis. Such contracts are often
necessary, particularly for governing boards that want to sponsor a
school but do not think they have the expertise to create a good one on
their own. Management companies also create clarity about school goals
and methods, short-circuiting potentially long and laborious processes
of school self-definition. But they add a powerful new player that
affects all the internal relationships---among the governing board,
school administrators, teachers, and parents---and often between the
governing board and the government agency that issued the charter.

Management companies have their own interests---reputations to preserve,
capacities to build, financial goals to meet---and ideas about what
constitutes good teaching. Teachers hired by management companies often
must meet well-established criteria and work on schedules dictated by
the management company's philosophy, not determined within the school.

One education management company we interviewed appears to have
struggled with how to define its relationship with its charter school
boards. After several disputes over personnel matters and other issues
the company saw as micromanagement from the board, the company is
seeking what it terms "partnership" relationships rather than being seen
as a contractor. To this end, the company recently purchased land for
one of its schools as an indication of its investment. This
"partnership" relationship, however, does not change the fact that the
school's non-profit governing board is legally responsible for the
performance of the school.

In addition, some school governing boards and management companies have
engaged in conflicts over who was in charge, especially when governing
boards demanded to be able to pick and choose among instructional
practices that management companies considered interdependent parts of
broader strategies. These conflicts, which in a small number of cases
have led to firing of the management company, inevitably trickle down to
the teaching staff and students. However, charter schools' need to
maintain parent confidence and forces the warring parties to reach some
sort of resolution within a few months.

When a school subcontracts for services, especially for management of
the educational program, it is critical that the contract itself be
crystal clear about who is responsible for what. Charter schools around
the country are learning that lesson.

A guide published by the Charter Friends National Network is designed to
help charter school governing boards avoid these difficulties by
developing clear contracts.[^9] As they suggest, governing boards must
not enter into relationships with outside organizations lightly. Charter
school boards must understand their fiduciary duties and take them
seriously.

**Detracting from the school's core mission.** If a charter school is
overseen by a nonprofit board but has contracted with for-profit
organizations, there is always potential for conflict of the
non-profit's "mission" drive and the for-profit's "profit" drive. Even
two nonprofit organization might experience mission conflict. A small,
parent-led school may partner, for instance, with an environmental
community organization that can lend expertise and resources, but then
may feel pressure to spend more time on environmental excursions, for
instance, than on reading.

In one case, a state charter school office called a social service
nonprofit that had been providing jobs and GED preparation to suggest it
apply for a charter. This organization had a longstanding relationship
with the district because they educated harder to serve students and
provided volunteer tutors to elementary schools for many years. The
district was the authorizer and readily agreed to grant the charter.
Though this organization has made the shift to managing a school
relatively easily, it is experiencing difficulty learning how to run the
elementary side of a K--12 school.

In both of these situations, strong school leadership must make sure
that the school's instructional priorities needed to meet performance
goals and other accountability requirements are met and to make sure the
school is able to stay focused on its core mission.

**Attracting unwanted attention.** The flip side of having strong
political connections is often that a very high profile school attracts
a lot of attention. While this can be an advantage (as described above)
it can also create distractions for a school if not managed well.
Schools with well-known partners are more likely to be written about in
the newspapers and are more likely to attract researchers. Researchers
and other visitors can quickly turn a serene school into a tourist
attraction. The high profile schools we visited have become skilled at
scheduling visitors so they do not interfere with the functioning of the
school, but they remain aware of the "mixed blessing" of working with
outside organizations.

**Managing the downsides.** The downsides are identifiable but solvable.
Whether these relationships are positive or negative depends on whether
the school has a clear sense of its mission and the leadership to use
resources provided from the outside without losing its way, traits we
believe all schools ought to have. On the whole, these relationships are
less likely to fracture a school than are government categorical
programs that come with many compliance and reporting strings attached.

These relationships, along with schools' new internal relationships
between board and staff, represent important additions to public
education. They potentially bring broader community financial and
intellectual resources to bear on public education. They may encourage
schools to be more responsive to parents and the general public. Most
important, they make schools accountable to people and organizations
that have a real stake in their success or failure.

####### Involuntary Relationships: Accountability to Other Government Agencies and Political Interest Groups

In theory, charter school accountability to government is supposed to be
confined to a school's relationship with its authorizer and for the
content of its charter contract.[^10] But in practice, this is almost
never the case. In our review of state laws and regulations, our surveys
and our case studies, it is clear that charter school accountability to
government is much more complex. We have found that:

-   Charter schools must answer to unexpected, and often unwelcome,
    government and political actors.

-   Pressures from multiple sources threaten to eclipse a charter
    school's relationships with parents, teachers, and even its
    authorizing agency.

-   Those who have a stake in the success or failure of the charter
    school movement play a key role in regulating these relationships.

**Unexpected actors are common.** Other government agencies, besides the
authorizing agency also oversee charter schools, whether the authorizer
wants them to or not. Almost half of the chartering agencies in our
survey reported that they were aware of other agencies (local, state, or
federal) that had conducted compliance reviews or audits of the schools
they had chartered. However, this was far more likely among
college/university-based chartering agencies (86 percent) than among
local districts (37 percent). This is probably because the primary
outside agency cited by the colleges and university chartering agencies
were other university-related agencies. Only a few chartering agencies
reported compliance reviews by either federal or state agencies.

Although these reviews and audits are sometimes politically motivated,
many government agencies intervene in the operation of charter schools
without any conscious intent to do harm. Many are simply working "by the
book," and since charter schools usually lack protectors within the
bureaucracy, they are subject to harsher scrutiny than most public
schools must endure.

Schools faced with mixed signals (and demands not contemplated in their
charters) can be confused about whom they must listen to and what they
must do. Charter schools that want to escape strict performance
accountability can exploit such conflicting demands, hoping at
reauthorization time to use a compliance defense. A school might say to
its authorizer, for instance, "We did what we were told (which was
different from what we had intended to do) and we are therefore not
responsible for the results." Other schools have learned that if they
have strong local constituencies and the expectations are unclear, their
renewal is virtually assured.

However, charter schools that use this tactic risk their ability to put
performance first. There is no way schools can meet all of these
demands, so they must resort to focusing on those that satisfy immediate
political needs. This compromise does not support a cohesive school
organization.

In the course of this study, we talked with an aide to a mayor of a
small city. Her job was to coordinate the work of city agencies so that
public schools undergoing renovations could open on time. The aide
convened meetings of city inspectors---health, fire, and
buildings---some months in advance of a school's reopening to stress the
mayor's interest in making sure all inspections were done and signed off
on time. As the aide explained, without the mayor's initiative,
something was bound to go wrong---inspections done late, rules
interpreted too literally, lenient options overlooked. With the mayor's
expression of interest city, inspectors could be counted on to use their
discretion in ways consistent with school opening.

In the absence of such powerful good offices, charter schools can be
disrupted in ways that regular public schools seldom experience, whether
or not the public agencies involved bear them any ill will.

**Compromising pressures from these actors.** In many cases, schools and
authorizing agencies are subject to demands from state and federal
agencies, teachers' unions and other interest groups fearing that
charter school practices might set precedents that weaken their
positions elsewhere.

Charter schools in Michigan, for example, have faced a very complex web
of government accountability. Those critical of charter schools have
allegedly called in government agencies as diverse as the fire marshal
and the fair employment practices commission to inspect schools. On
request of members elected to the state board of education and the state
legislature, the state auditor conducted a review of Central Michigan
University, the state agency that has authorized the majority of charter
schools. In the first few years after the law passed under a Republican
administration, teachers unions also pressured school districts to
refuse to hire any teachers from Central Michigan University's school of
education. A provision was added to the state law forbidding them to do
this. There are two sides to all these stories, but the end result is
the same: charter schools in Michigan, and other states, must operate in
the midst of battles between diverse government actors, often in an
intensely partisan climate.

The results of this highly charged environment are two fold: it creates
confusion over who is responsible for oversight, and it creates
transaction costs that can cripple schools. While charter school
sponsors are supposedly responsible only for monitoring the terms of
charter school contracts, the contracts reference the entire state law
and regulatory code. Multiple government agencies also have
responsibility to investigate complaints, and thus, they are also very
involved in monitoring. The result, according to many charter school
leaders we interviewed, is a high level of duplication of oversight.

The two-person charter school office in Massachusetts is often the focal
point of competing political forces. Sole authorization and revocation
powers rest with the Massachusetts Board of Education. This nine-person
board was elected by Governor William Weld and his successor, Paul
Cellucci. The Board sets policy for the Department of Education and more
specifically the charter school office, a unit within the Department.
Charter schools were a centerpiece of the Weld and Cellucci
administrations' education initiatives.

A countermove by the opposition party has been to tighten oversight of
all charter school operations. In 1997, the Massachusetts state
legislature created oversight commissions to examine a) the charter
school office for ethics violations, b) how the average cost per student
was being allocated, c) whether the charter schools were actually
"innovative," d) what was happening in the schools (site visits on top
of the site visits the charter school office was already conducting),
and e) fiscal audits of individual schools and the charter school office
itself. After 2 years of looking, State Auditor DeNucci, a member of the
opposition party, reported that the South Shore Charter School had bad
bookkeeping practices in its first 2 years of operation. The report does
not provide evidence that the funds were misspent and also indicates
that the problem was corrected in the school's third and fourth year,
but it still made the front page of the Metro section in the *Boston
Globe*.

Schools and authorizing agencies ignore political wrangling and
interveners from diverse agencies or government at their peril. Some can
tie up a school or authorizing agency in compliance reviews or
litigation. Heavy new transactions costs can kill a struggling charter
school.

Other government agencies, especially state education departments, are
understandably confused about how they should deal with charter schools.
Though some have the impression that they are to keep "hands off,"
others assume that charter schools, like all other public schools, must
fill out standard financial, attendance, and service reports and account
in detail for the use of funds. Administrators of federal categorical
programs assume that charter schools must use funds and deliver services
pretty much the way other schools do. Some local and state
administrators may be deliberately testing charter school operators to
see how much of the normal regulatory burden they will accept. But most
simply reason that if other public schools must submit a particular
report or plan, a charter school must be similarly obligated.

####### Key Roles for Those Who Have a Stake in the Charter School Movement

In the midst of this ambiguous legal and political environment, charter
schools must rely on those who are in positions of power to take a
leadership role in defining what should be expected of these unique
schools and buffering the schools from diverse interest group or agency
demands.

Central Michigan University (CMU) has eliminated some of the ambiguity
about oversight by being proactive about helping charter schools
navigate the regulatory environment. CMU concluded that the state's
requirements were often unclear and that since separate state bureaus
administer different rules, no one can readily describe all the
regulations schools must obey or all the reports they must file. CMU
therefore took responsibility for identifying all rules and all required
reports, and informing CMU-sponsored schools of exactly what had to be
done and when. In future years, charter schools will receive CD-ROMs
with complete reporting schedules and all necessary forms, filled out
with the previous year's data and ready for easy amendment and
electronic filing. By this method, CMU has made compliance obligations
clearer and less intrusive.

In the early years of implementation of Massachusetts' charter school
law, the Governor oversaw charter schools directly through his own
Office of Education. His Secretary of Education actively ran
interference for newly founded charter schools that were being blocked
from starting due to local permitting problems. Weld's successor, and
former Lieutenant Governor, Paul Celluci, has continued to support and
protect the integrity of the Massachusetts charter school initiative.

This reliance on key implementers, or power brokers, is a reality.
Whether it helps or hinders a solid accountability system is a different
question. When high level politicians and community leaders have their
names associated with a particular reform, it can provide a very
positive incentive to make sure the reform does not simply wash away. On
the other hand, high-level politicians may be resistant to critical
analysis of performance that is healthy for any new program. In Arizona,
for instance, the state agency has come under fire for not providing
sufficient monitoring for parents to get good information about the
market of charter schools.

Definite resolution of these issues will require clearer laws and
clearer implementation. Some of this is already occurring. Newer charter
school laws are learning from the ambiguities of the first laws.
Implementers around the country are sharing lessons about what has
worked and what hasn't. For the time being, charter schools and
authorizing agencies will have to feel their way, alert to the costs of
conceding anyone's right to make demands, whether contemplated in their
charters or not.

[^1]: Traditional public schools receive donations and grants, and some
    develop long-term relationships with outside organizations (e.g.,
    schools that partner with industries that might then hire some of
    their graduates such as schools affiliated with the Coalition for
    Essential Schools). These schools often take on many of the
    characteristics of charter schools: they are not solely accountable
    to their local school board, and they often find ways around
    constraints that apply to other schools (e.g., many find ways to
    hire teachers that fit their programs, rather than accepting
    whatever the local civil service system gives them; some use the
    influence of their outside partners to resist the district's efforts
    to transfer their principals to other schools).

    For the most part, however, traditional public schools enter
    temporary grantee and vendor arrangements that do not create
    long-term relationships of mutual dependency. They get a one-time
    grant from one business or foundation and expect to find another
    donor when the grant expires; they hire a consultant for a
    particular professional development session but do not expect a
    continuing relationship. Some traditional public schools are
    increasing their ties to these outside entities as their districts
    allow them more control over their budgets and encourage them to be
    more entrepreneurial (i.e., in the Seattle School District). But
    these organizations normally have little or no stake in the success
    or failure of the school's overall academic program.

[^2]: Herdman, Paul and Marc Dean Millot, *Charter Schools as a
    Decentralization Model: A Budget Analysis of First Year Charter
    Schools in Massachusetts*. Center on Reinventing Public Education,
    forthcoming.

[^3]: An Apparent First: Colorado Charter School Gets S&P Rating.
    *Education Week*. July 14, 1999.

[^4]: A reviewer of this report noted that a number of the authorizers
    in Michigan expect or require charter schools to contract with an
    EMO.

[^5]: Some schools with close ties to an authorizing or nearby district
    purposefully stay away from charter school associations or networks
    in order to ensure a good relationship with the district. Two
    schools we studied complement their districts by serving students
    that the district traditionally struggled to educate. For this
    reason, they have fairly friendly relationships with their nearby
    districts and do not want to jeopardize them by joining activist
    associations.

[^6]: Wells, Amy Stuart, *Beyond the Rhetoric of Charter School Reform:
    A Study of Ten California School Districts*. Los Angeles, UCLA
    School of Education, 1999.

[^7]: *Education Week*. August 4, 1999.

[^8]: See, for example, Millot, M.D. and R. Lake: *Supplying a System of
    Charter Schools: Observations on Early Implementation of the
    Massachusetts Statute.* UW/RAND Program on Reinventing Public
    Education. June, 1997.

[^9]: *Charting a Clear Course: A Resource Guide for Building Successful
    Partnerships between School Management Companies and School
    Management Organizations*. Charter Friends National Network. 1999.

[^10]: Kolderie, Ted. States Begin to Withdraw the Exclusive. Nathan,
    Joe. *Charter Schools: Creating Hope and Opportunity for American
    Education.* San Francisco, Jossey-Bass Publishers, 1996.