John Konop And How The Charter School Amendment Fails To Protect Tax Payers.

By Cherokee businessman John Konop

Dear Mr. Geist,

According to a recent newspaper article, it seems you are still very confused about why you’re getting so much negative feedback about the lack of fiscal controls in the charter school amendment that you support. I will once again clarify the issues by explaining how the Cherokee Charter Academy (CCA) was funded and how the current charter school amendment fails protect tax payers.

• CCA’s owner/operators (a private company) were given over $1million of taxpayer money as start-up capital.

• CCA’s owner/operators receive a management contract that pays them close to $1 million a year (a rate that is higher on a percentage basis than what Cherokee County currently spends on our public schools). These funds are above and beyond the additional, regular operating money that charter schools receive from the school district.

• CCA’s owner/operators were not required to purchase a guaranteed bond (a form of insurance) that pays the school district in the event the CCA closes midyear (and dumps over 1,000 students back into the system).

If the CCA goes out of business — which looks increasingly likely — its owner/operators get to keep the $1 million start-up capital (and/or whatever assets they bought with it) and have no liabilities. You supported giving a private company over a million dollars, guaranteed profit, and NO downside risk.

This is a terrible deal for taxpayers. You should NOT support forcing taxpayers to capitalize private companies or give them no-obligation government contracts. As a public school board member, your duty is to protect the school’s assets, not look for creative ways to squander them.

The taxpayers of Cherokee County have already been burned with similar deals. For example, we may lose $50 million that went to fund a private recycler that went bust (leaving taxpayers again holding the bag). As you well know, taxpayers across the country have already lost massive amounts of money in poorly structured charter schools deals. For the record, I support charter schools and believe they play an important and positive role in our education system. What I do not support is officeholders like you that make foolish and emotional decisions with taxpayer money.

In closing, Mr. Geist, here are some questions that the taxpayers of Cherokee County would like your answers to:

•Please list all the other school district services that a vendor can perform where taxpayers provide free start-up capital and guaranteed revenue, all with no penalty for failure to perform. Assuming you can’t provide such a list, why did you support the private owner/operators of the Cherokee Charter Academy receiving such a deal?

• Why do you support a charter amendment that does not include the taxpayer protections needed to prevent CCA-like deals from happening again?

Regards,

John Konop

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3 Comments

Filed under Charter Schools, Georgia Education

3 responses to “John Konop And How The Charter School Amendment Fails To Protect Tax Payers.

  1. CharterStarter, Too

    I can address Mr. Konop’s statements and assertions.

    Related to “lack of fiscal controls” for charter schools:

    To start with, there are several controls in place to protect tax payers:
    1. Charters must submit an independent audit each year, pursuant to 20-2-2065(b)(7).

    2. Charters must annually submit a report to the state Department of Education, which includes a copy of the audit and reports on all goals, including financial goals.

    3. Under the Charter Schools Act of 1998, a provision for the state to close a charter includes:
    a. (c) A failure to meet generally accepted standards of fiscal management.

    4. Charters earn their funds monthly, not an allotment for a full year. For those engaging the services of a management company, they do not turn over the full allotment to the EMO for the year. It is asinine to state the excessive risk in these terms, as they do not exist.

    5. SBOE Rule 160-4-9.04 (g) states: upon termination, whether initiated during the charter term or at the end of the charter term and with or without the consent of the charter school, all assets and unencumbered funds for the terminated local charter school remaining after liabilities have been satisfied shall revert to the local board or boards. All assets and unencumbered funds of a state chartered special school shall revert to the Office of the Treasury and Fiscal Services (for state or federal funds) or the local board or boards (for local funds.)

    6. Cherokee Charter Academy was under the Commission Statute, which also provided protection. 20-2-2089 stated, “If a charter is not renewed or is terminated, the commission charter school shall be responsible for all debts of such charter school. The local school system may not assume the debt from any contract for services made between the governing body of the commission charter school and a third party, except for a debt for which the local school system has agreed upon in writing to assume responsibility.”

    Konop says: “CCA’s owner/operators (a private company) were given over $1million of taxpayer money as start-up capital.”

    Praytell, to what “$1M of taxpayer money” are you referring? Start up capital is not provided except through a Federal Implementation Grant, for which schools may only apply allowable expenses and must first invest and then have reimbursement requests approved by the state. The assets procured belong to the school, not the management company.

    Konop says: “CCA’s owner/operators receive a management contract that pays them close to $1 million a year (a rate that is higher on a percentage basis than what Cherokee County currently spends on our public schools). These funds are above and beyond the additional, regular operating money that charter schools receive from the school district.”

    I find it somewhat ridiculous that you are concerned about spending $1M for an organization to manage a school (for central administration which includes personnel, finance, legal/regulatory, instruction, assessment, insurance, etc.), and yet…

    Cherokee County spent $127,770.53 on 2 secretaries to support 1 person – Dr. P, plus his salary of $225,953.54 – and NONE of these 3 handle personnel, finance, legal/regulatory, or instruction. The district spends another $8M just in central office personnel. Who is holding the district accountable for their egregious spending? Let’s see – at $7917 per pupil in Cherokee County, these two secretaries and Dr. P’s salary could have funded 44.6 students education…plus the central admin costs could fund another 997 students.

    Taking Cherokee out of the equation and just looking in general at how tax payers are protected from district mismanagement. Please tell me how DeKalb County tax payers have been protected from the $63M hole the district has dug? Please tell me how a district like Baker County has been under a mandated corrections plan due to significant audit findings since 2008 that they have YET to correct. If these districts were charter schools, they would have been closed. Tell me, Mr. Konop, how is the taxpayer protected?

  2. Prof

    Just as an observation to CharterStarter, Too, you often seem to shift the ground of the argument when answering criticisms, a real logical fallacy that’s quite misleading. For example:

    John Konop is questioning the private CCA owner and operators being given more than $1 million of taxpayer money as start-up capital, which seems to me a real problem as a taxpayer. Your reply to him: “I find it somewhat ridiculous that you are concerned about spending $1M for an organization to manage a school (for central administration which includes personnel, finance, legal/regulatory, instruction, assessment, insurance, etc.), and yet… ”

    And then you go off on an unrelated tangent to discuss expenses of Cherokee County re. 2 secretaries and central office personnel, and DeKalb County’s fiscal problems. But you still haven’t discussed the point that John Konop brings up about taxpayers’ money being paid to a private company, without any oversight or penalties for failure.

  3. CharterStarter, Too

    @ Mr. Konop: Please tell me which schools in Georgia have closed due to financial issues, and of these, which are operated by management organization.

    Secondly, yes, it is a service. As I stated, they provide personnel, financial, legal and regulator, curriculum development, assessment, insurance, etc. So does a central office, which, was my related point that Prof seemed to miss. Nothing allows “crawl back” rights to the money districts spend on wasted central office bloat either. That’s why oversight of charters AND district should be rigorous. Charters have a stiff consequence if they get out of line – districts don’t.

    @ Prof – I DID answer the questions Konop posed – I answered them directly and quoted both the law and state board rules to refute his assertions. Moreover, I believe what’s good for the goose is good for the gander, so I posed the very SAME question back to him with districts as an example (instead of the one he likes to single out – Cherokee Charter Academy). He has not responded to MY questions though.