Charter Schools: Education Could Do More to Assist Charter Schools with Applying for Discretionary Grants
Released: 2010-12-07T00:00:00

Letter

Background

Charter schools are public schools created to address a number of concerns with the educational system. Intended as a means to address failing schools and to encourage innovation in public education policy, charter schools operate with more autonomy than traditional public schools. In exchange, they are held accountable for meeting the terms of their charters in order to remain open.

States began adopting charter school laws in the early 1990s, beginning with Minnesota in 1991. States allow charter schools flexibility in their operation for agreeing to accomplish specific academic goals contained in their charters. The specifics of these arrangements vary, as each state sets up its own charter school structure and guidelines, and states have continued to revise them over time. During school year 2008-2009, 40 states and the District of Columbia had state laws authorizing charter schools.

Charter School Structure and Operation

Oversight authority for charter schools may rest with several entities, including state boards of education, which set educational policy, and state departments of education, which implement those policies. In addition, some states have created charter school offices, housed in the state department of education, that support and advocate for charter schools. States specify which entities within the state can authorize the establishment of a charter school, such as state departments of education, state boards of education, local educational agencies, institutions of higher education, and municipal governments. Some states have also created independent charter school boards that can authorize charter schools in the state.

Depending on the state, a wide range of individuals or groups, including parents, educators, nonprofit organizations, and universities, may apply for permission to operate a charter school. The charter document, agreed upon by the applicants and the authorizer, defines specific academic goals and outlines school finances and other operational considerations. In some states, a single charter may cover the establishment of multiple schools. Once charter schools are in operation, the authorizer is responsible for monitoring school performance and has authority to close the school or take other actions if academic goals or state financial requirements are not met.

States’ Definitions of Charter Schools’ Status

States define charter school status in different ways. For example, unlike traditional public schools that are part of a larger LEA, consisting of multiple schools, some states establish charter schools as their own LEA. Other states require them to be part of a larger LEA, while still other states allow charter schools the option of being either a distinct LEA or part of a larger LEA. Further, some states allow charter schools to be their own LEA for some purposes and part of a larger LEA for others. Figure 1 shows the designation of LEA status in states with operating charter schools.

Depending on state legislation, charter schools may be set up as nonprofit organizations. Should these schools choose, they may apply for status as tax-exempt organizations under IRS section 501(c)(3). Nonprofit status presents another avenue for charter schools applying for federal discretionary grant funds.

There are two types of federal grants—formula and discretionary—which differ in their grant application and award process. For example, with education-related formula grants, in most instances the entity designated as the SEA—usually the state department of education—applies for and administers funds allocated by a federal agency in accordance with a distribution formula prescribed by law. SEAs then disburse funds to school districts and schools on the basis of a formula or other criteria. However, with discretionary grants, entities that meet eligibility criteria established by law or regulation apply and are awarded grants on the basis of a competitive process. The steps for preparing and submitting a federal discretionary grant application, and the criteria for making grant awards, are available from the federal program office. Figure 2 shows the grant application and award process for one federal discretionary grant program, the Department of Education’s Improving Literacy through School Libraries program.

For education-related discretionary grant programs, eligible applicants likely will include local educational agencies, individual public schools, nonprofit organizations, or partnerships comprised of multiple eligible entities. Charter schools that are their own LEA may be eligible to apply directly to a federal agency for a federal discretionary grant. Charter schools that are part of a larger school district must apply through their school district for discretionary grants that designate LEAs, but not individual schools, as eligible applicants. However, charter schools within a district may apply directly to a federal agency for discretionary grants that designate public schools as eligible applicants. In states that establish charter schools as nonprofits, these schools may apply for discretionary grants that designate nonprofits as eligible applicants, as well.

Once a grant award is made, federal funding follows different paths to charter schools depending on the type of grant. For formula grants, such as those authorized by the Elementary and Secondary Education Act of 1965 (ESEA) Title I, Part A and the Individuals with Disabilities Education Act (IDEA), Education makes grant payments to the SEA grantee. The SEA then distributes formula grant funding directly to qualifying charter school LEAs. School districts also receive formula grant payments from the SEA and distribute the funds to qualifying charter schools that operate within their district and are not distinct LEAs. For discretionary grants, the administering federal agency makes payments directly to successful applicants of grant competitions, which may include charter school LEAs, individual charter schools, or nonprofits. Charter schools that are part of a larger school district receive federal discretionary grant payments from their school district, if the school district wins a grant competition and if the school district has made provision for charter schools in the grant application. If charter schools that are part of a larger school district win grant competitions for which individual schools are eligible applicants, those charter schools receive grant payments from Education (see fig. 3).

Few Charter Schools Apply For Federal Discretionary Grants Despite Being Potentially Eligible

In School Year 2008-2009, Approximately 7 Percent of Charter Schools Applied for Federal Discretionary Grants

Although charter schools were potentially eligible for a variety of federal discretionary grants administered across several agencies in school year 2008-2009, most did not apply for them. Based on our survey of charter schools, we estimate 7 percent of charter schools applied for federal discretionary grants during that school year (see fig. 4).

Charter schools designated as an LEA, those with large student populations, and those in operation for a relatively longer time had significantly larger percentages of grant applicants (see table 1). According to our survey, approximately 8 percent of charter schools designated as their own LEA applied for grants, compared to an estimated 2 percent for schools that are part of a larger LEA. Officials from charter schools that are part of a larger LEA most frequently indicated that their lack of LEA designation was a major reason they did not apply for federal grants. This may suggest that some officials of charter schools that are part of a larger LEA are unaware that they may apply to many federal programs as a public school or a nonprofit organization. On the other hand, charter schools that are part of a larger LEA may not have applied for discretionary grants because they were not eligible to apply if the grant did not designate a public school or a nonprofit organization as an eligible applicant.

Similarly, the percentage of applicants was higher for schools with a student population exceeding 400 students, compared to smaller schools serving fewer than 200 students. Several school officials we surveyed and visited specifically mentioned their school’s small size has discouraged them from applying for grants, in part because they perceived that their small school could not compete against applicants serving more students, such as traditional school districts. Further, charter schools that had been in operation for 7 or more years had significantly higher percentages of applicants versus schools that had been open for less than 3 years.

Charter schools serving certain special populations also had higher levels of applicants. As shown in table 1, charter schools with either low-income student populations or minority student populations exceeding 75 percent of their total population had significantly higher percentages of applicants than schools with low-income or minority student populations below 35 percent. This may reflect the relatively high number of discretionary grant programs that focus on serving special populations, including low-income and minority students.

Although our survey results suggest most charter schools do not apply to federal discretionary grant programs, they are potentially eligible for a variety of such programs. We identified 47 federal discretionary grant programs for which charter schools are potentially eligible. The programs are administered by 10 federal agencies to which Congress provided $2.3 billion during fiscal year 2008 (see table 2). The Department of Education administered 33 of the 47 programs and those programs we provided $1.8 billion in that fiscal year. Appendix II contains the complete list of federal discretionary grant programs we identified as being potentially available to charter schools.

Charter Schools Did Not Apply for Grants Mostly Due to a Lack of Resources and Limited Awareness about Grant Opportunities

Charter school officials indicated that their lack of resources, such as staff and time, and their limited awareness about grant opportunities were major reasons their school did not pursue federal grants during school year 2008-2009 (see table 5).

With respect to a lack of resources, our survey results were often supported by comments from charter school officials. Several officials we surveyed and visited mentioned their school currently lacks experienced and knowledgeable staff available to competitively apply for and administer grant funds. In many cases, constrained charter school budgets exacerbate the challenge of employing staff to carry out grant-writing duties. Many school officials we spoke with mentioned that federal, state, local, or private funding is often barely sufficient to cover school costs and some reported their school or other schools in their area were experiencing budget shortfalls. Several officials reported that, as a result of limited funds, their school cannot afford to hire staff to prepare grant applications, or in some cases it has had to reduce available staff. Education officials we interviewed also noted that insufficient resources discourage charter schools from applying for federal grants.

Several charter school officials reported their existing staff cannot devote time and effort to grant writing in light of their many other administrative duties. Some believe federal programs are often better suited for larger LEAs consisting of many schools, as opposed to individual charter schools, because those LEAs may be more likely to have a team of people dedicated to writing and administering grants. One school official noted that even if a charter school is designated as its own LEA, it may not fully operate in the same fashion as a multischool LEA due to its limited staff. Indeed, while charter schools designated as their own LEA are able to apply directly for federal grants, similar to multischool LEAs, approximately half of such schools reported their lack of resources is a major reason their school does not pursue grants.

Moreover, several charter school officials we visited spoke about the time and effort required to apply for federal grants and said that the cost in terms of resources typically outweighs the potential benefit of the grant award. Some officials said, in addition to the resources needed to apply for grants, the subsequent management of grant funds received must be considered. One official noted that, in addition to the existing oversight required for the federal formula grant funds that his charter school currently receives, the amount of oversight required for certain discretionary grants would overburden his school’s resources. Another official told us that if a school in her state receives more than $500,000 in federal grants, it is subject to audit requirements. She said small charter schools with limited administrative capacity often view these types of requirements as an impediment to applying. Some charter school officials told us that private fundraising or grants from private entities, such as foundations, may be more attractive to charter schools than federal funding, in part due to fewer oversight requirements.

In addition to limited resources, our survey results show that a general lack of awareness about the federal grant opportunities potentially available to charter schools is a major reason many charter schools do not pursue grants. However, our survey also indicates that this perceived lack of awareness exists even though many school officials report they periodically receive information from various entities, including their state department of education and their state charter school association, about federal discretionary grant opportunities. Moreover, approximately 45 percent of the charter school officials that indicated that a lack of awareness about federal programs was a major reason they did not apply for grants, also reported that they periodically receive information about discretionary grant opportunities from the U.S. Department of Education.

Several charter school officials we surveyed expressed a desire for an improved means of learning about grant opportunities that address their school’s needs. Some suggested e-mail could be used to inform schools about available grants. Some officials suggested that the creation of a centralized location, such as a Web site, would enable their school to access grant information specifically tailored for charter schools.

Education Has Taken Steps to Encourage Charter Schools to Apply For Grants, But All Charter Schools May Not Be Reached

Education Has Clarified Charter Schools’ Eligibility in some Grant Announcements

According to our review of Federal Register notices, Education has inserted language clarifying charter school LEA eligibility into grant announcements for 17 of the 33 discretionary grant programs for which charter schools are potentially eligible. Of the five Education offices with programs for which charter schools are potentially eligible, four included eligibility language explicitly mentioning charter school LEAs in some of their grant announcements. Of the offices, the Office of Safe and Drug- Free Schools (OSDFS) has the largest percentage of programs that explicitly include charter schools in grant eligibility language (see table 6).

The eligibility language generally states that charter schools considered to be LEAs under state law are eligible to apply for the grant. This language provides clarification on charter school eligibility for both federal program administrators that review charter school grant applications and charter schools that are considering applying for the grants. Surveyed charter schools applied to 9 of the 17 Education discretionary grant programs with eligibility language explicitly mentioning charter schools. In contrast, they applied for 2 of the 16 Education discretionary grant programs without the eligibility language (see fig. 6).

However, none of the officials we interviewed reported that Education has taken steps to clarify grant eligibility for charter schools that are part of a larger LEA and wish to apply for grants for which individual public schools are eligible.

Most of the other agencies with programs for which charter schools may be eligible did not take any actions that would assist charter school applicants, such as including language in grant announcements that explicitly identifies charter school LEAs as eligible applicants, according to agency officials. The National Endowment for the Arts (NEA) and the Department of Labor (DOL) are the exceptions. NEA added language to the Learning in the Arts for Children and Youth grant solicitation that explicitly identifies charter schools as eligible applicants. With respect to the YouthBuild program, charter schools were concerned that students who had dropped out of traditional public schools and re-enrolled in an alternative school such as a charter school program were not eligible to participate in YouthBuild. Congress added language to DOL’s appropriations acts that allowed the YouthBuild program, for program years 2008-2010 and each program year thereafter, to serve students who have dropped out and re-enrolled in an alternative school as long as the re- enrollment is part of a sequential service strategy.

Officials we interviewed at agencies other than Education did not identify any eligibility issues for charter school applicants and, consequently, did not request assistance from Education. This is consistent with our previous finding that few charter schools applied to grant programs outside of Education and no charter school officials reported being denied funding because the administering agency determined that charter schools were not eligible applicants.

Education Uses Multiple Methods to Publicize Grant Opportunities, but Few Target Charter School Applicants

Education officials we interviewed reported that the Department publicizes grant opportunities through several notification mechanisms to all potential applicants, but few officials reported outreach targeted specifically at potential charter school applicants. Education’s primary mechanisms for publicizing grant opportunities include the Federal Register, http://grants.gov, and Education’s Forecast of Grant Opportunities. Several officials also reported that their offices maintain a listserv through which they can disseminate grant announcements to interested parties.

Education also prepared Accessing Federal Programs: a Guidebook for Charter School Operators and Developers for charter schools but the guidebook is not posted on the CSP’s Web page on Education’s Web site, http://www.ed.gov. The guidebook gives an introduction to the grant funding process, provides profiles of programs that charter schools could apply to, and lists resources such as federally funded technical assistance providers.

Some Education offices also hold grant application workshops to explain the application process to potential applicants. The Office of Innovation and Improvement (OII) uses these workshops as an opportunity to explain how charter schools might apply for grants as an LEA. OII, which administers almost a quarter of Education’s programs for which charter schools may be potentially eligible, also gives presentations on grant opportunities and the application process at national conferences for charter schools. However, officials we interviewed at Education and other federal agencies noted that their program offices are careful not to give preferential treatment to any applicant or group of applicants in order to ensure a fair competition.

Officials at charter schools we visited reported that Education sometimes provides feedback on grant applications that were denied funding. Feedback was important to charter schools because it helps them decide whether to apply for grants in the future.

Education Offices Confer with Education’s CSP When Eligibility Issues Arise

Education officials we interviewed said that they confer on a case-by-case basis with the CSP, which is charged with supporting the creation and development of high quality charter schools, when issues arise regarding charter school eligibility for grant programs. For example, OSDFS reported that charter school applicants have had difficulty providing documentation of their LEA status. OSDFS officials consulted with the CSP in order to provide guidance to applicants. A CSP official suggested that charter schools that are applying for federal grant programs ask their authorizer for a letter including confirmation that it is a charter school, when the charter school started, its LEA status, and status as a nonprofit organization.

Conclusions

Charter schools’ accelerating growth, reinforced by federal government initiatives such as the Race to the Top program, has increased their share of the public school population to 5 percent. Charter schools’ growth also has the potential to increase competition for federal grants. As the charter school population grows, the Department of Education will need to re- examine its efforts to ensure that charter schools are aware of the opportunities for federal grant funds that are available to them and that they are able to compete effectively in the federal discretionary grant award process. Education and a few other agencies already have taken steps to facilitate charter schools’ access to some discretionary grant programs, but more effort is needed to reach charter schools that are unaware of federal discretionary grant opportunities or that lack the resources and expertise to apply, particularly in competition with large resource-rich school districts. Without more targeted information about grant opportunities, charter schools may not identify the discretionary grants at Education and other federal agencies for which they may qualify. Such information may alert smaller charter schools or those with more narrowly focused missions to pursue funds that they would ordinarily overlook. On the other hand, the complexity of the grant application process and the record keeping requirements for many of the federal discretionary grants may make some of them unsuitable for charter schools with limited resources, even with assistance from Education. However, charter schools must have information about the discretionary grants available to them in order to make decisions about whether applying for those grants is in their best interest.

Recommendations for Executive Action

To further publicize grant opportunities for charter schools seeking federal assistance and to help strengthen charter schools’ management capacity to pursue grant opportunities, we recommend that the Secretary of Education: 1. Clarify the federal discretionary grant opportunities for which charter schools are potentially eligible. For example, using existing grant notification mechanisms, Education might develop one link on the department’s Web site to all federal discretionary grants for which charter schools are potentially eligible, governmentwide. 2. Require all pertinent Education discretionary grant program offices to add text to the grant announcement stating that charter schools meeting the relevant eligibility criterion are eligible to apply for the grant. 3. Require that the CSP post the guidance for applying for federal grant programs that it developed for charter schools on the department’s Web site.

Agency Comments and Our Evaluation

We provided a draft of the report to the Department of Education for review and comment. Education agreed with our recommendations and stated the actions that the department intends to take to address them. Specifically, to ensure that all discretionary grant notices for programs for which charter schools are potentially eligible explicitly recognize charter schools’ eligibility, Education intends to add text to all of the department’s pertinent discretionary grant announcements stating that charter schools meeting the relevant eligibility criterion are eligible to apply for the grant. Education also plans to encourage other federal agencies identified in the report to identify charter schools as eligible applicants in the relevant grant application notices. To further publicize the federal grant opportunities for which charter schools are potentially eligible, Education has tasked the National Charter School Resource Center, a technical assistance center, with distributing grant notices to all charter schools, using a list of all charter schools the Center is compiling. The Center also will post grant notices on its Web site and Education will link its Charter Schools Program Web page to the Center’s Web site as well. Concerning our recommendation that the CSP post the guidance it developed for charter schools about applying for federal grant programs on the department’s Web site, Education said that the Center is updating that guidance and will post it on the Center’s Web site. Education also will use the Center’s Web site to highlight the federal discretionary grant application experience of small charter schools that have won grant awards. Our study found that small charter schools are less likely to apply for discretionary grants. In addition, although charter schools’ access to federal formula grant funds was not addressed in this report, Education stated that the department is strengthening its oversight of state educational agencies’ role in ensuring that new or expanding charter schools receive their appropriate share of federal formula grant funds in a timely fashion.

Education also commented on two of our findings. With respect to our finding that at least one-quarter of charter schools that applied for federal discretionary grants during the 2008-2009 school year received an award of grant funds, Education commented that this percentage is higher than the percentage of all applicants that were awarded discretionary grants by Education. Education stated that this outcome indicates great potential for charter schools as they apply at higher rates. Education also noted that our analysis of discretionary grant programs did not include Education’s CSP and the 21st Century Community Learning Centers program. However, as we explain in the introduction to the report and in appendix II, we focused on discretionary grant programs for which both charter schools and traditional public schools compete for funding. Because the CSP grants target only charter schools and the 21st Century Community Learning Centers program is a federal formula grant program, these two programs did not meet our criteria for inclusion.

Education also provided technical comments, which have been incorporated in the report as appropriate. Education’s comments are reproduced in appendix III.

We are sending copies of this report to the Secretary of Education, relevant congressional committees, and other interested parties. The report also is available at no charge on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me at (202) 512-7215 or ashbyc@gao.gov. Contact points for our Offices of Congressional Relations and Public Affairs may be found on the last page of this report. GAO staff who made major contributions to this report are listed in appendix IV.

Appendix I: Scope and Methodology

This appendix discusses in detail our methodology for examining charter schools’ experience applying for federal discretionary grant programs and the assistance, if any, that the U.S. Department of Education (Education) has provided to charter schools or other federal agencies to help charter schools address any eligibility issues that arise. The study was framed around two questions: (1) To what extent do charter schools apply for federal discretionary grant programs and what challenges do they face, if any, in doing so? (2) What role has the U.S. Department of Education played in helping charter schools establish their eligibility for federal programs?

We used separate sources of data for each study question, including a survey of a stratified random sample of 640 charter school officials; site visit interviews with officials in school districts, charter schools, charter school associations, and state education agencies in New York, Ohio, and Florida; two lists of governmentwide K-12 education programs for which charter schools are potentially eligible; a survey of federal officials responsible for the K-12 education programs; and interviews with Department of Education officials having oversight responsibility for the K-12 education programs and their counterparts in 9 other federal agencies. Before deciding to use one of the lists of K-12 education programs—a list developed by the National Resource Center for Charter School Finance and Governance—we conducted a data reliability assessment. We discuss our assessment procedures and steps we took to mitigate any data limitations below, as part of the methodology for determining the extent to which charter schools apply for federal discretionary grant programs. We conducted descriptive analyses of the charter school and federal program official survey data, a synthesis of the site visit data, and qualitative analysis of the interviews with federal officials having oversight responsibility. We also reviewed relevant federal laws and regulations.

Survey of Charter School Officials

To obtain national-level information on charter schools’ experiences applying to federal grant programs and to learn more about any challenges charter schools may face when applying, we conducted a Web-based survey of a probability sample of officials from charter schools that were in operation during school year 2008-2009.

The target population consisted of the 4,856 charter schools operating during the 2008-2009 school year in the 40 states with operating charter schools and the District of Columbia. We developed our sampling frame from the U.S. Department of Education’s Preliminary Common Core of Data (CCD) 2008-2009 school file. On the basis of analysis of these data, we determined this source to be adequate for the purposes of providing a sampling frame.

The survey sample design was a stratified random sample of charter schools selected from the population of 4,856 charter schools. Each of the charter schools in the population was assigned to one of five groups— strata—and sample charter schools were selected from each of these strata. We selected all the largest charter schools—those with at least 2,000 students—and a random sample of schools from each of the remaining four strata, as summarized in table 7. The remaining four strata were defined based on the composition of the local educational agency (LEA) that contained the charter school. One such stratum was composed of schools which are separate LEAs for some purposes and part of an LEA for other purposes. The remaining schools were assigned to one of three strata depending on the makeup of their “parent” LEA. We obtained 492 usable responses for an overall (weighted) response rate of 78 percent. In addition, we determined that 29 of the selected schools were out-of-scope for our survey because the school was determined not to be a charter school, or the school was not in operation during the 2008-2009 school year.

All estimates produced from the sample and presented in this report are for the estimated target population of 4,856 charter schools operating during the 2008-2009 school year, the school year for which the most recent information about grant applications was available at the time of our survey. Because we followed a probability procedure based on random selections, our sample is only one of a large number of samples that we might have drawn. Since each sample could have provided different estimates, we express our confidence in the precision of our particular sample’s results as a 95 percent confidence interval (e.g., plus or minus 6 percentage points). This is the interval that would contain the actual population value for 95 percent of the samples we could have drawn. For this report, all percentage estimates based on this survey of charter schools have 95 percent confidence level of plus or minus 6 percentage points or less, unless otherwise noted.

To develop the survey questions, we reviewed prior GAO studies on charter schools and existing studies on charter school structure and operation. We also interviewed charter school officials and representatives of selected charter school management organizations and charter school associations, including the Director, Regional Leadership Team, Knowledge is Power Program (KIPP) Foundation; President, Academica Corporation; Policy Director, National Alliance for Public Charter Schools; Policy Director, National Association of Charter School Authorizers; and a Senior Consultant, Public Impact.

The survey was administered between November 2009 and June 2010. We directed the survey to the person at each charter school who was most knowledgeable about the school’s funding and instructed them to confer, as necessary, with other school personnel to answer the questions. In many cases, the charter school principal completed the survey. In some instances, the school’s business manager or financial director did so. To maximize response, we sent periodic follow-up e-mails to all schools that had not responded to the survey by our deadline.

In addition to the reported sampling errors, the practical difficulties of conducting any survey may introduce other types of errors, commonly referred to as nonsampling error. For example, differences in how a particular question is interpreted, the sources of information available to respondents, or the types of people who do not respond can introduce unwanted variability into the survey results. We included steps in the survey design, data collection, and data analysis to minimize such nonsampling errors.

To increase the response rate for this survey, we developed and administered a follow-up telephone interview to Web-based survey nonrespondents. The questionnaire for the telephone interview consisted of a subset of questions from the Web-based survey that were most relevant to our study’s objectives. To assist us with the follow-up telephone interviews, we acquired the services of a professional services firm already under contract to GAO. We divided the sample of nonrespondents into two groups, with one group containing school officials who had partially completed the Web-based survey and the other group containing those who had not begun the survey. GAO staff made repeated call attempts to school officials in the first group and interviewed available officials. The professional services firm’s survey research staff made repeated call attempts to school officials within the second group and conducted telephone interviews with available officials. GAO staff and the professional services firm staff conducted calls for a 4-week period from May to June 2010. Data collected from both the Web-based survey respondents and telephone interview respondents for this subset of questions constitute the survey data used for this report.

In addition, we took steps to clarify questions to ensure that survey questions would be correctly interpreted by respondents. For example, during its development, we pretested our Web-based questionnaire with six charter school officials from across the United States. We conducted these pretests to ensure that the respondents understood the questions and could provide the answers to them and the questions could be completed in a reasonable amount of time. Following each pretest, the survey underwent additional, mostly minor, revisions. Similarly, to minimize nonsampling error with respect to our follow-up telephone interview questionnaire, we made only minor wording changes to selected questions.

While we did not validate all of the information that charter school officials reported through our survey, we took several steps to ensure that the information was sufficiently reliable for the purposes of this report.

For example, we reviewed all federal grant program names that respondents reported as being programs for which their school applied. We did not accept federal formula grant programs, state programs, and programs that otherwise could not be verified as federal discretionary grant programs to which charter schools can directly apply. Data results, including those for other associated questions, were adjusted accordingly.

An additional source of nonsampling error can be errors in computer processing of the data and statistical analysis. All computer programs relied upon for analysis of this survey data were independently verified by a second analyst for accuracy.

Site Visit Selection, Data Collection, and Analysis

To obtain information on charter schools’ experience applying for federal program funds, we made site visits to charter schools, school districts, and charter school associations and state educational agencies. We visited three locations: New York, New York; Columbus, Ohio; and Miami-Dade County, Florida. We selected these locations on the basis of variation in LEA structure and geographic location. Within each state, we selected charter schools that represented variation with respect to use of an educational management organization (EMO), grade level and enrollment level, percentages of minority and low-income students, and Title I status, as indicated in table 8. At some charter schools, representatives of the school’s EMO provided their perspective on the decision to apply for federal discretionary grant funds. We also met with officials from two school districts in Florida and conducted telephone interviews with state officials in New York and Florida to learn more about their role in distributing federal funds to charter schools.

Identification of Federal Discretionary Grant Programs for which Charter Schools are Potentially Eligible

To identify federal discretionary grant programs for which charter schools may be eligible, we used two existing lists of federal government education-related grant programs. We obtained a list of 108 programs from the National Resource Center for Charter School Finance and Governance (Resource Center). To determine the reliability of the Resource Center’s list, we reviewed documentation about development of the list we obtained from the Center’s Web site and interviewed Resource Center representatives about the measures they took to ensure data reliability, including confirmation of program information with agency officials. We determined that the list was sufficiently reliable for our purposes. We obtained a second list of 151 programs from a prior GAO report. We matched and merged the two lists and screened them to select grant programs that met the following criteria programs from which a traditional public school would normally benefit; programs to which charter schools, either as a public school, a local educational agency (LEA), or a nonprofit organization, may apply directly; programs that award grants on the basis of a competitive process; programs that provide monetary funding to schools; and programs that received a congressional appropriation or allocation during fiscal year 2008.

These actions resulted in a list of approximately 90 programs administered by 13 federal agencies. To confirm the programs on our list, we contacted agency officials responsible for managing those programs. Based on information provided by the officials, we confirmed that many of the programs on our list met our criteria and we excluded any that officials denoted as not meeting our criteria. Some officials also provided the names of additional programs that met our criteria which were added to our list.

To further refine our list, we designed a questionnaire and administered it to the appropriate federal agency officials in order to collect basic descriptive information for each program. In order to maximize the effectiveness of the questionnaire and to minimize error, we pretested the questionnaire with officials from three federal agencies. We conducted these pretests to ensure that the officials understood the questions and could provide the answers to them in a reasonable amount of time. Following each pretest, the questionnaire underwent additional, mostly minor, revisions. In addition to collecting descriptive program information, the questionnaire provided an additional opportunity for us to confirm, exclude, and add programs based on agency information and consultations with agency officials. Our final list contained 47 programs for which charter schools are potentially eligible.

Interviews with Federal Agency Officials

To determine what role Education has played in helping charter schools establish their eligibility for federal programs at Education and other agencies, we interviewed agency officials with oversight responsibility for the discretionary programs identified in study question 1. The appropriate officials were identified with the assistance of the agencies’ GAO liaisons and, in some instances, GAO liaisons for the program area. Seventeen interviews were conducted from March to June 2010. Some interviews covered multiple grant programs. Interviews covered 9 agencies and 42 programs for which charter schools are potentially eligible. Officials responsible for five of the programs did not respond to contacts for interviews. Of those five programs, one was the only program in the agency for which charter schools are potentially eligible.

Open-ended questions were used to guide discussions and topics included actions, if any, taken to assist charter school applicants in applying for the program(s); the number of charter schools that have applied for the program(s), if any, and the outcome of their applications; identified challenges that charter schools face when applying for the program(s) and reasons charter schools may not apply for the program(s); mechanisms used to notify charter schools about grant opportunities; and actions, if any, taken to follow up on then-Secretary Spellings’ 2006 letter to federal department and agency heads concerning a governmentwide initiative to ensure charter schools’ eligibility for federal programs.

We also spoke to charter school association representatives about any challenges charter schools may face in applying for federal programs. In addition, we asked the representatives how they identify federal funding opportunities for charter schools.

Appendix II: Federal Discretionary Grant Programs for which Charter Schools Are Potentially Eligible

We identified 47 federal discretionary grant programs for which charter schools are potentially eligible. These programs satisfy the following criteria programs from which a traditional public school would normally benefit; programs to which charter schools, either as a public school, an LEA, or a nonprofit organization, may apply directly; programs that award grants on the basis of a competitive process; programs that provide monetary funding to schools; and programs that received a congressional appropriation or allocation during fiscal year 2008.

Two programs for which charter schools apply are not included among the 47 programs. Because traditional public schools, which are not eligible for Education’s CSP, would not benefit from the program, and charter schools’ eligibility is not an issue, the CSP is not included in the list. Education’s 21st Century Community Learning Centers program also is not included. Because school districts and schools compete for grant awards from their state education agency (SEA), the 21st Century Community Learning Centers program appears to be a discretionary grant in some respects. However, Education awards 21st Century program grants to SEAs on the basis of a distribution formula and classifies it as a formula grant program.

Appendix III: Comments from the Department of Education

Appendix IV: GAO Contact and Staff Acknowledgments

Acknowledgments

Sherri Doughty, Assistant Director Sara Edmondson, Analyst-in-charge Jacob Beier, James Bennett, Susannah Compton, Doreen Feldman, Shelby Kain, Jill Lacey, Sheila McCoy, Meredith Moore, Luann Moy, David Perkins, Mark Ramage, James Rebbe, Christine San, Leigh Ann Sennette, and F. Elizabeth Valentin, also made significant contributions to this report.