Avoiding the mothership 

No one wants to be responsible for monitoring Cesar Chavez School Network's finances

For the education reform crowd, it's something of a mantra: "Charter schools are public schools."

True enough. But charter networks — the parent organizations that organize and control some groups of charter schools — are not public schools. And most of the time, they don't have to answer to anyone.

"There are growing standards," says Jim Griffin, president of the Colorado League of Charter Schools, a Denver-based membership organization. "They break down a little bit when you get into this newly evolving relationship between the schools and their mothership: their parent organization."

The Cesar Chavez School Network is an exception. Currently, it does have to answer to someone — the Charter School Institute (CSI), which holds the charter for several Chavez schools and the network itself.

And boy, does the network have some answering to do. The Chavez network, which has charters in Pueblo and Colorado Springs and another opening in Denver, has fallen under intense scrutiny recently. Media coverage (including "Leader or cheater?" News, June 4) of its financial practices and hefty administrative salaries — CEO and founder Lawrence Hernandez received $261,732 in salary and benefits for the 2007-8 school year — has caused an uproar.

In response, CSI is demanding a long list of financial, board and employee information from the network.

Less oversight, not more

But none of this means that the Chavez network, or other networks, can expect higher standards in the future. In fact, CSI just announced that following its big investigation, it will hold the Chavez network to lower standards: Starting later this summer, CSI will license only Chavez's individual schools, not its network, the same approach it takes with other charter networks.

Under that system, CSI oversees individual schools' finances. It monitors how they spend federal and state funds. It keeps track of how much each school pays to its parent network, and what services the network provides in exchange. But CSI has no right to look at the finances of the Chavez network itself.

"As long as we can account for all the state and federal accounts that are going through [each] school," says Randy DeHoff, CSI's executive director, "that's as far as we really want to go into it."

That means if there's any hint of funny business with the Chavez network next year, DeHoff won't feel any pressure to investigate. It won't be his problem anymore, a thought which brings a little relief to his voice.

Problem is, no one is filling the void he's leaving. It's really not clear, Griffin says, whether a charter school network's finances are public information. While Griffin says he urges networks to err on the side of transparency, only the IRS may have the right to investigate the finances of the Chavez mothership.

This year's investigation

As for what DeHoff is doing while the network still is his problem: On June 5, he sent a letter to Hernandez that, among other things, stated, "Since the current contracts for all three schools are with the Network, rather than the schools, our inquiries necessarily focus on the financial records of the Network, within which we presume that the finances of each school are easily and clearly segregated."

The letter went on to demand that the Chavez network provide — by July 31 — detailed financial information, employee salary and benefit information, inventory, vendor and contract information, background on board members (including any personal or familial ties they might have to Hernandez), 501(c)3 status for the schools and the network, organizational charts, board minutes, enrollment, financial policies, employee handbooks, and all policies on conflicts of interest.

John Covington, superintendent of Pueblo City Schools, which holds the charter for two Chavez schools, has also become vocal. He sent a letter to Colorado Department of Education Commissioner Dwight Jones, calling for a state investigation. Since it contracts with individual schools, PCS has no authority to demand network financial information itself. Jones hasn't responded yet, according to the CDE.

Meanwhile, parents have compiled 17 questions for and requests of the network, including minutes from board meetings. The board planned to meet with parents Wednesday, after the Indy's deadline for this issue.

State Rep. Michael Merrifield of Colorado Springs, chairman of the House Education Committee, says he finds the movement toward even less transparency for charter networks "troubling," especially since it could result in networks viewing charters as money-makers instead of educational vehicles — if they don't already.

"I don't like this Wal-Mart concept of charter schools being placed wherever they think they can make a profit," Merrifield says.

He adds that it's strange that CSI would ask for so much information from a network, then kill the possibility of getting more of that information in the future. And finally, Merrifield, who once famously stated "there must be a special place in hell" for supporters of charter schools — and took plenty of criticism for it — takes a mischievous tone.

Maybe, he says, CSI was worried about uncovering a scandal that might shed a bad light on charters in general.

"Having experienced what happens when you criticize charter schools," he says with a laugh, "I understand."


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