March Issue
March 01, 2015

Flush with cash: NYSUT analysis of financial reports shows charter schools don't need funding boost

Author: NYSUT Staff
Source: NYSUT United

Charter school operators in New York state are hardly in need of more help from the state. A NYSUT analysis of audits, tax returns and charter renewal reports reveals that charter schools have $282.3 million in taxpayer money in the bank and $392.1 million in unrestricted net assets.

One Long Island charter school alone banked $21 million in cash savings at the close of fiscal 2013. It's money that can be used for rent and academic programs.

Charter operators are instead asking the state for a per-pupil increase and money for facilities. Gov. Cuomo's budget is happy to oblige, proposing to siphon even more money away from regular public schools.

"It's the definition of 'chutzpah' for the charter industry to be crying poverty and demanding ever more state aid when their own balance sheets show that most individual charter schools are rolling in cash and have tidy savings in the bank," said NYSUT President Karen E. Magee.

Cuomo's budget proposal to give charters more state funding at a time when scores of districts are facing fiscal stress suggests he is trying to reward his billionaire hedge fund backers — many of whom sit on charter school boards — rather than address the real funding needs of regular public schools that serve 97 percent of public school students, Magee said.

Recent analysis by Capital New York found charter school groups and their supporters spent $16 million on lobbying, campaign contributions to state-level candidates and parties, and independent expenditure campaigns last year.

"It certainly appears the governor is more interested in rewarding his billionaire friends who bankroll the charter lobby than providing the adequate and equitable state funding that all kids need," Magee said. NYSUT Executive Vice President Andy Pallotta said the union's analysis of charter balance sheets demonstrates why the charter industry must be held to stricter standards of accountability and transparency.

"Charters are public schools. Yet, because local taxpayers have no say in how charter boards are appointed, no vote on a school budget and accompanying scrutiny, many charters are getting away with stockpiling money," Pallotta said.

"Taxpayers have every right to know their tax dollars are being used wisely. At a time when our school districts are starved for funding — and inequality is at record levels — it's outrageous that individual charters are, in many cases, sitting on piles of cash while students in regular public schools are doing without."

NYSUT's analysis also shows that 82 percent of the state's charters held, on a percentage basis, cash in excess of 4 percent — the amount regular school districts are permitted to keep in reserve. The nearly 200 charters studied had, on average, 25.3 percent of their annual budgets in cash reserves at a time when public school budget reserves are underfunded and 90 districts have been classified "fiscally stressed" by the state comptroller. Five charter schools had enough cash at the end of fiscal 2013 to fund more than a year of operations without any new revenue.

NYSUT analyzed the financial records charter schools were required to file with their authorizers for 2011-12 and 2012-13. The reports, the latest available, were made accessible to the public last fall. No data is available for several dozen charters, many of them new.

The amount of cash held by charters is growing rapidly. In 2012, charter schools reported having $221 million in cash on hand; by 2013 that amount grew by about $61 million. The charters' unrestricted net assets, which can be used for a variety of purposes, grew by about $93 million, from $298.5 million in 2012 to $392.1 million in 2013, according to charter audits.

Ironically, the charters that tend to hold the least amount of cash are generally those connected with large networks. Charter networks, such as Success Academy, bill their individual schools per-pupil "management fees," sometimes more than $2,000 per student. Still, the Success network schools report $7.1 million in cash, while the seven New York City Icahn charter schools — named after billionaire corporate raider Carl Icahn — reported having a combined $7.2 million. Two Harlem Children's Zone charter schools reported nearly $10 million in cash on hand. Audits for the KIPP charter schools show they held about $7.3 million in cash.

Sampling of charters with millions in the bank

LONG ISLAND:

Roosevelt CS had $21.1 million in cash in its audit filed on Nov. 1, 2013, enough for nearly $30,700 for each of its 687 students. The Riverhead CS reported holding $4.5 million in cash, or almost $16,000 cash for every one of its 281 students.

NEW YORK CITY:

Academic Leadership CS in the Bronx is co-located within a New York City public school and does not pay rent. In September 2013, it reported having $6.1 million in cash. With 323 students, the charter school had $18,800 per student in cash reserves.

Bronx Preparatory CS has amassed $19.9 million in unrestricted net assets. The school reports $3.3 million in cash holdings, equal to nearly $13,000 per student. It pays $1 per year rent. Bronx CS for Children reported holding $4.4 million in cash and enrolls 422 students. It has cash on hand equal to about $10,500 for every student.

BUFFALO:

South Buffalo CS has $9.9 million in cash on its books, or a per-pupil cash balance of almost $15,000. Elmwood Village CS has $2.7 million in cash and, with 298 students, has nearly $9,000 per student in cash. Enterprise CS reported having $3.7 million in cash and 404 students, or more than $9,000 per student in cash to fund its operations.

LACKAWANNA:

Global Concepts CS has 848 students and $6.3 million in cash on its balance sheet — about $7,500 per student.

ALBANY:

Albany Community CS has $3 million in cash on hand.

YONKERS:

Charter School for Excellence in Yonkers reports $1.8 million in cash.

SYRACUSE:

Syracuse Academy of Science CS holds $2.4 million in cash.

ROCHESTER:

University Prep CS has $2.1 million in cash in the bank.

For the full list and more information go here.

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