Report to Congressional Committees

United States Government Accountability Office

GAO

May 2005 CHARTER SCHOOLS

Oversight Practices in 

the District of 

Columbia 

GAO-05-490 
Page 1 GAO-05-490 D.C. Charter School Authorizers 

May 19, 2005 

The Honorable Sam Brownback 

Chairman 

The Honorable Mary L. Landrieu 

Ranking Minority Member 

Subcommittee on the District of Columbia 

Committee on Appropriations 

United States Senate 

The Honorable Joe Knollenberg 

Chairman 

The Honorable John W. Olver 

Ranking Minority Member 

Subcommittee on Transportation, Treasury, and Housing and Urban 

 Development, The Judiciary, District of Columbia, and Independent 

 Agencies 

Committee on Appropriations 

House of Representatives 

In the 2004-2005 school year, District of Columbia (D.C.) charter schools 

enrolled more than 15,000 students, or approximately 21 percent of D.C.’s 

public school population—one of the highest proportions in the nation. 

Charter schools are public schools that are exempt from certain 

regulations in exchange for accountability in improving student 

achievement. Charter school authorizers—the entities that approve and 

oversee charter schools—are responsible for ensuring that charter schools 

achieve expected student outcomes and comply with applicable laws. In 

D.C., two entities, the D.C. Board of Education (BOE) and the D.C. Public 

Charter School Board (PCSB), were established by the School Reform Act 

as charter school authorizers. The law requires the authorizers to monitor 

charter schools, but little information is available about the performance 

of the BOE and PCSB in providing such oversight. 

As required by the 2005 D.C. Appropriations Act, we examined the 

performance of D.C. charter school authorizers in their approval and 

oversight roles. In fall 2005, we will publish the full results of our research. 

However, as required by law, we provided your staff with an interim report 

on our work. For this interim report, we addressed the following 

questions: 

United States Government Accountability Office

Washington, DC 20548 
Page 2 GAO-05-490 D.C. Charter School Authorizers 

1. What are the responsibilities specified for the D.C. charter school 

authorizers in the School Reform Act? 

2. How are the D.C. authorizers carrying out these responsibilities? 

To determine the responsibilities of D.C. charter school authorizers, we 

reviewed the School Reform Act as well as other applicable federal and 

District laws. To determine how the authorizers are carrying out these 

responsibilities, we reviewed charter school application guidelines, 

monitoring reports, evaluation criteria, school accountability plans, and 

authorizers’ renewal and revocation policies and procedures. We also 

interviewed officials from the BOE and PCSB, other D.C. agencies such as 

the Office of the Chief Financial Officer and the Office of the Inspector 

General, and the U.S. Department of Education. We conducted our work 

between January and April 2005 in accordance with generally accepted 

government auditing standards. 

This report formally conveys the information provided to your staff during 

a briefing held on April 25, 2005. In summary, we found: 

• The School Reform Act outlines the responsibilities of the D.C. charter 

school authorizers. The law requires that the authorizers review charter 

school applications and approve qualified applicants. Additionally, the law 

requires the BOE and PCSB to monitor charter schools and determine if 

charters should be renewed or revoked. The authorizers are also required 

by the School Reform Act to create and distribute annual reports on their 

activities. 

• Although the authorizers carry out their responsibilities in different 

manners, both the BOE and PCSB have developed processes to meet their 

legal responsibilities. Each authorizer has established timelines, guidance, 

and procedures for reviewing and approving charter school applications. 

Additionally, both authorizers conduct annual and 5-year monitoring 

reviews to ensure that charter schools are complying with applicable laws, 

achieving student academic goals, and using sound financial practices. The 

BOE has revoked charters of schools that fail to meet required standards, 

and the PCSB is in the process of revoking a school’s charter. Finally, each 

year both authorizers have created annual reports that include the 

information required by the School Reform Act. 

We provided a draft of this briefing to officials at the BOE and the PCSB 

for their technical review and incorporated their comments where 

appropriate. 
Page 3 GAO-05-490 D.C. Charter School Authorizers 

We are sending copies of this briefing to the BOE, the PCSB, the D.C. 

Board of Education, the D.C. Public Charter School Board, the Secretary 

of Education, appropriate congressional committees, and other interested 

parties. In addition, the briefing will be available at no charge on GAO’s 

web site at http://www.gao.gov. 

If you or your staff have any questions, please contact me or Deborah 

Edwards at (202) 512-7215. Tamara Fucile, Christopher Morehouse, and 

Sheila McCoy also made key contributions. 

Marnie Shaul 

Director, Education, Workforce, 

 and Income Security Issues 
Page 4 GAO-05-490 D.C. Charter School Authorizers 

1

DC Charter School Authorizers

Briefing for Staff of the Senate and House 

Committees on Appropriations

April 25, 2005
Page 5 GAO-05-490 D.C. Charter School Authorizers 

2

Introduction

• Charter schools are public schools that are exempt from certain state and local regulations in exchange for 

accountability for improving student achievement.

• The DC School Reform Act established two independent entities with authority to approve and oversee charter schools 

in the District of Columbia. Called authorizers, these entities 

are

• the DC Board of Education (BOE) and

• the Public Charter School Board (PCSB)

• The BOE began chartering schools in DC in 1996. PCSB chartered its first schools in 1997. At the beginning of the 

2004-2005 school year, 16 schools were operating under the 

BOE and 26 under PCSB.
Page 6 GAO-05-490 D.C. Charter School Authorizers 

3

Congressional Mandate

• The 2005 DC Appropriations Act required GAO to review the 

responsibilities and performance of the DC charter school 

authorizers.

• GAO’s review consists of 2 phases:

• Phase 1 (in this briefing): GAO will describe what the 

School Reform Act requires of DC authorizers and how 

they are carrying out their responsibilities.

• Phase 2 (fall 2005): GAO will conduct a more 

comprehensive examination of the authorizers’ processes 

and performance.
Page 7 GAO-05-490 D.C. Charter School Authorizers 

4

Research Questions

1. What are the responsibilities specified for the 

DC charter school authorizers in the School 

Reform Act?

2. How are the DC authorizers carrying out these 

responsibilities?
Page 8 GAO-05-490 D.C. Charter School Authorizers 

5

Scope and Methodology

• To determine the authorizers’ responsibilities, we 

reviewed federal and District laws.

• To determine how the authorizers are carrying out 

their responsibilities, we reviewed

• application guidelines,

• monitoring reports,

• evaluation criteria,

• school accountability plans, and

• renewal and revocation policies and procedures.
Page 9 GAO-05-490 D.C. Charter School Authorizers 

6

Scope and Methodology, cont’d

• We also interviewed officials of

• the BOE and PCSB,

• U.S. Department of Education, and

• DC agencies, including

• Chief Financial Officer (CFO) and

• Office of Inspector General

• We conducted our work from January to April 2005 in 

accordance with generally accepted government 

auditing standards.
Page 10 GAO-05-490 D.C. Charter School Authorizers 

7

Results in Brief

• Requirements of the School Reform Act: DC Authorizers 

must

• review and approve charter school applications,

• monitor charter schools,

• determine if charters should be renewed or revoked, and

• provide annual reports on their activities.

• Authorizer Practice: The BOE and PCSB have developed 

similar processes to carry out their legal responsibilities, but

the two entities vary in how they implement these processes.
Page 11 GAO-05-490 D.C. Charter School Authorizers 

8

Background

• Parents, educators, nonprofit organizations, or other groups 

may apply to start a charter school. Charter schools are 

governed by a board of trustees.

• The academic goals of the school are included in its charter, 

which is the agreement reached with the authorizer on what 

the school intends to accomplish and how it will operate.

• Charter schools are subject to certain federal laws, including 

the Individuals with Disabilities Education Improvement Act 

(IDEA) and the No Child Left Behind Act (NCLBA).
Page 12 GAO-05-490 D.C. Charter School Authorizers 

9

• Charters in DC are granted for 15-year terms, which can be 

renewed an unlimited number of times. To date, no schools have 

reached the end of their first term.

• Local funds are allocated to charter schools in DC using the same 

per-pupil allocation formula for operating expenses used for all 

other public schools. During the 2004-2005 school year, this 

amount ranged from $6,904 to $8,077 for a regular education 

student depending on grade level.

• For fiscal year 2005, DC’s appropriation included $13 million 

specifically designated for charter schools. Additionally, DC charter 

schools, like all public schools, are eligible for other federal funds, 

such as funding for IDEA and NCLBA.

Background, cont’d
Page 13 GAO-05-490 D.C. Charter School Authorizers 

10

Background, cont’d

• In School Year 2004-05, DC charter schools enrolled 

about 21 percent of the District’s public school students, 

one of the highest proportions of public students in charter 

schools in the country.
Page 14 GAO-05-490 D.C. Charter School Authorizers 

11

Background, cont’d

Various DC offices have responsibilities 

related to DC charter schools
Page 15 GAO-05-490 D.C. Charter School Authorizers 

12

Legal Responsibilities: Reviewing and 

Approving Charter Applications

• Applicants seeking to form charter schools may file a 

charter application with either authorizer.

• Applicants must provide a detailed academic and 

business plan, including elements such as

• the school’s academic focus,

• plans for community and parental involvement,

• a 2-year operating budget, and 

• articles of incorporation and bylaws.

• Authorizers must hold public hearings on applications 

received.
Page 16 GAO-05-490 D.C. Charter School Authorizers 

13

Legal Responsibilities: Reviewing and 

Approving Charter Applications, cont’d

• After reviewing applications, an authorizer must approve 

any application if it determines that

• the application meets the legal requirements;

• the applicant agrees to any condition or 

requirement set forth by the authorizer; and

• the applicant has the ability to meet the 

educational objectives outlined in the application.

• If an authorizer does not approve an application, it must 

provide written notice to the applicant explaining why 

the application was not approved.
Page 17 GAO-05-490 D.C. Charter School Authorizers 

14

Legal Responsibilities: 

Monitoring Charter Schools

Authorizers must monitor schools’

• operations and

• progress in meeting student academic 

achievement goals as set forth in the charter.

Authorizers must ensure compliance with

• applicable laws and charter provisions and

• annual reporting requirements, including the 

submission of audited financial statements.
Page 18 GAO-05-490 D.C. Charter School Authorizers 

15

Legal Responsibilities: 

Renewing and Revoking Charters

• At the end of a charter’s 15-year term, authorizers 

may renew a school’s charter.

• Authorizers shall not approve renewals if the school

• committed a material violation of applicable laws 

or provisions of its charter or

• failed to meet student academic achievement 

goals set forth in the charter.
Page 19 GAO-05-490 D.C. Charter School Authorizers 

16

Legal Responsibilities:

Renewing and Revoking Charters, cont’d

• At least once every 5 years, authorizers must 

conduct a thorough review of each charter school to 

determine whether the school should be permitted 

to continue or have its charter revoked.

• Authorizers may revoke charters for failure to meet 

academic goals only as a consequence of the 5-

year review; authorizers can revoke charters for 

other reasons, such as financial mismanagement 

and legal noncompliance, at any time.
Page 20 GAO-05-490 D.C. Charter School Authorizers 

17

Legal Responsibilities:

Renewing and Revoking Charters, cont’d

• An authorizer may revoke a charter if it determines that 

the school

• violated applicable laws or provisions of its charter 

or

• failed to meet the academic goals set forth in the 

charter.

• An authorizer must revoke a charter if it determines that 

the school

• does not use generally accepted accounting 

principles, 

• has engaged in a pattern of fiscal 

mismanagement, or 

• is no longer economically viable.
Page 21 GAO-05-490 D.C. Charter School Authorizers 

18

Legal Responsibilities: 

Issuing Annual Reports

Each authorizer is required to prepare an annual report that 

includes 

• a list of its board members and board meeting dates for 

the previous year;

• the number of charter petitions received, approved, and 

denied, and reasons for denials;

• a description of new charters issued, charters renewed, 

refused renewal, and revoked; and

• any recommendations for improving the administration of 

charter schools.
Page 22 GAO-05-490 D.C. Charter School Authorizers 

19

Legal Responsibilities: 

Issuing Annual Reports, cont’d

Each authorizer must submit its annual report to 

• DC Mayor,

• DC Council,

• DC Board of Education,

• US Secretary of Education,

• House and Senate Committees on Appropriations,

• House Committee on Education and the Workforce,

• Senate Committee on Health, Education, Labor, & Pensions,

• House Committee on Government Reform, and

• Senate Committee on Homeland Security & Governmental 

Affairs
Page 23 GAO-05-490 D.C. Charter School Authorizers 

20

Authorizer Practice: 

Application Process

Consistent with the law, each authorizer 

• requires that applications include elements mandated by 

law,

• holds public hearings on proposed schools, and

• provides written notification to applicants whose 

applications have been denied.
Page 24 GAO-05-490 D.C. Charter School Authorizers 

21

Authorizer Practice: 

Application Process, cont’d

• Both authorizers require applicants to provide additional 

information, such as

• a student recruitment and marketing plan,

• a staffing plan,

• expected use of volunteers, and

• services sought from DC Public Schools.

• Both authorizers require applicants to submit their 

applications in two phases. BOE and PCSB officials 

stated this two-phase process enables them to identify 

potential problems earlier in the application process.
Page 25 GAO-05-490 D.C. Charter School Authorizers 

22

Authorizer Practice: 

Application Process, cont’d

• Each authorizer has developed its own method for generating 

numerical scores to select successful applications and for 

assigning certain weights to the selection criteria.

• BOE is not accepting applications in the 2004-2005 school 

year, in order to re-examine its application process. BOE 

officials stated they expect to resume accepting applications 

in the 2005-2006 school year.

• PCSB has accepted applications each year since 1997.
Page 26 GAO-05-490 D.C. Charter School Authorizers 

23

Authorizer Practice:

Overview of Monitoring Reviews
Page 27 GAO-05-490 D.C. Charter School Authorizers 

24

Authorizer Practice: 

Monitoring

• The BOE and PCSB have outside experts conduct 

reviews, including site visits, to assess schools’ 

compliance.

• Both authorizers have developed processes for 

reviewing schools’ finances, governance, legal and 

charter compliance, and academic performance.

• BOE includes these components in one annual 

report.

• PCSB conducts separate reviews to assess legal and charter compliance and academic performance.
Page 28 GAO-05-490 D.C. Charter School Authorizers 

25

Authorizer Practice: 

Monitoring of School Governance

• Authorizers verify background checks of school staff are 

conducted.

• During annual reviews, both authorizers

• review minutes of school board meetings and

• interview school board members.
Page 29 GAO-05-490 D.C. Charter School Authorizers 

26

Authorizer Practice: 

Monitoring of School Finances

• Both authorizers require charter schools to submit

• periodic financial statements,

• annual audits, and

• revised budgets in case of enrollment shortfalls.

• Both authorizers review contracts as required by law.
Page 30 GAO-05-490 D.C. Charter School Authorizers 

27

Authorizer Practice: 

Monitoring of School Finances, cont’d

• PCSB conducts additional financial oversight.

• During a school’s first year, PCSB hires an outside CPA 

to assess the school’s accounting practices and internal 

controls.

• PCSB compares schools’ expenditures with projected 

revenues.

• Both authorizers have provided extra scrutiny to schools 

facing financial problems.

• BOE has referred cases to the DC CFO and DC Auditor. 

• PCSB has conducted its own interim financial reviews to 

assess problems and provide direction.
Page 31 GAO-05-490 D.C. Charter School Authorizers 

28

Authorizer Practice: 

Monitoring of Legal Compliance

• Both authorizers conduct annual monitoring reviews to 

ensure compliance with DC health and safety laws.

• The State Education Office conducts an annual enrollment 

audit each fall, as it does for all DC public schools. 

• PCSB reviews compliance with provisions of the No Child 

Left Behind Act during annual monitoring reviews; BOE relies 

on DCPS to review compliance in this area for its schools.

• Both authorizers rely on outside consultants to review 

schools’ compliance with IDEA.
Page 32 GAO-05-490 D.C. Charter School Authorizers 

29

Authorizer Practice: 

Monitoring of Academics

• Both authorizers require schools to submit accountability 

plans that outline 5-year academic goals.

• Accountability plans become part of the charter and are used 

as guides for the academic component of annual monitoring 

visits.

• Annual monitoring reviews assess progress toward academic 

goals; the 5-year review provides a comprehensive look at 

the accomplishment of academic goals set forth in the 

charter.
Page 33 GAO-05-490 D.C. Charter School Authorizers 

30

Authorizer Practice: 

Monitoring and Sanctions

Both authorizers have used sanctions in an effort to achieve 

compliance from schools.

• The BOE maintains a delinquent list that outlines reporting 

deadlines missed by individual charter schools. 

• The PCSB follows a Table of Remedies, which prescribes 

appropriate disciplinary actions depending upon the 

seriousness of the problems identified. 
Page 34 GAO-05-490 D.C. Charter School Authorizers 

31

Authorizer Practice: 

Renewal and Revocation

• Every 5 years authorizers must conduct comprehensive 

reviews to determine if charters should be allowed to 

continue.

• Five-year reviews cover the same areas as the annual 

monitoring review, but are more comprehensive. Fiveyear reviews also include documentation from previous 

annual reviews to help identify trends. 
Page 35 GAO-05-490 D.C. Charter School Authorizers 

32

Authorizer Practice: 

Renewal and Revocation, cont’d

The result of this 5-year review can be charter revocation 

or continued operation of the school.
Page 36 GAO-05-490 D.C. Charter School Authorizers 

33

Authorizer Practice: 

Renewal and Revocation, cont’d

Neither authorizer has developed standardized procedures to follow when a 

school closes.

• BOE has closed schools on a case-by-case basis. BOE officials stated that legislative clarification on closure procedures would be 

helpful, such as what to do with student records and how to dispose 

of assets.

• PCSB officials stated they are developing procedures for what to do 

when a school closes.
Page 37 GAO-05-490 D.C. Charter School Authorizers 

34

Authorizer Practice: 

Annual Reporting

BOE and PCSB annual reports include all information 

required by the DC School Reform Act as well as other 

information not required by law.

• BOE’s annual reports include information about the 

academic performance of each of its charter schools.

• PCSB’s annual reports include information about the 

board’s operations and official actions.
Page 38 GAO-05-490 D.C. Charter School Authorizers 

35

Authorizer Practice: 

Annual Reporting, cont’d

• BOE officials stated that they submitted their annual 

reports to the required DC offices and the US 

Department of Education, but not to Congress. BOE 

officials stated this omission was an oversight.

• PCSB officials indicated that they submitted their 

annual reports to all of the required recipients.
Page 39 GAO-05-490 D.C. Charter School Authorizers 

36

Next Steps

• In the second phase of this review, GAO will more 

closely examine the charter school authorizers’ 

performance in their approval and oversight of DC 

charter schools. 

• In addition, GAO will examine the resources devoted to 

DC public charter schools.

• The second phase of this review will be published in fall 

2005.
This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately. 
The Government Accountability Office, the audit, evaluation and 

investigative arm of Congress, exists to support Congress in meeting its 

constitutional responsibilities and to help improve the performance and 

accountability of the federal government for the American people. GAO 

examines the use of public funds; evaluates federal programs and policies; 

and provides analyses, recommendations, and other assistance to help 

Congress make informed oversight, policy, and funding decisions. GAO’s 

commitment to good government is reflected in its core values of 

accountability, integrity, and reliability. 

The fastest and easiest way to obtain copies of GAO documents at no cost 

is through GAO’s Web site (www.gao.gov). Each weekday, GAO posts 

newly released reports, testimony, and correspondence on its Web site. To 

have GAO e-mail you a list of newly posted products every afternoon, go 

to www.gao.gov and select “Subscribe to Updates.” 

The first copy of each printed report is free. Additional copies are $2 each. 

A check or money order should be made out to the Superintendent of 

Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. Orders 

should be sent to: 

U.S. Government Accountability Office 

441 G Street NW, Room LM 

Washington, D.C. 20548 

To order by Phone: Voice: (202) 512-6000 

TDD: (202) 512-2537 

Fax: (202) 512-6061 

Contact: 

Web site: www.gao.gov/fraudnet/fraudnet.htm 

E-mail: fraudnet@gao.gov

Automated answering system: (800) 424-5454 or (202) 512-7470 

Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 

U.S. Government Accountability Office, 441 G Street NW, Room 7125 

Washington, D.C. 20548 

Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800 

U.S. Government Accountability Office, 441 G Street NW, Room 7149 

Washington, D.C. 20548 

GAO’s Mission 

Obtaining Copies of 

GAO Reports and 

Testimony 

Order by Mail or Phone 

To Report Fraud, 

Waste, and Abuse in 

Federal Programs 

Congressional 

Relations 

Public Affairs 

PRINTED ON RECYCLED PAPER