Senate bill boosting oversight for SC charter schools wins unanimous support

COLUMBIA — A bill creating more oversight for charter schools, the management companies they hire and the authorizers that hold their contracts sailed through the Senate on Tuesday.

The Senate’s unanimous vote to send the proposal to the House came less than an hour before a House panel grilled the head of the Charter Institute at Erskine, the state’s second-largest charter school authorizer, over findings in a report an oversight agency released last November.

Nearly every recommendation from that report wound up in the bill the Senate approved Tuesday. The only exception was a funding adjustment Senate Education Chairman Greg Hembree plans to propose as part of the state budget, he said.

Senate advances bill

The bill wasn’t written to target Erskine, Hembree said.

But the charter institute was its impetus. When the small private college in Due West started authorizing schools in 2017, Hembree realized the state law allowing colleges to sponsor schools didn’t include much oversight.

Struggling charter schools switched from the state’s Public Charter School District — a statewide authorizer created in a 2006 law — to Erskine in an effort to escape accountability. When Limestone College, another small private college in Gaffney, opened its own charter authorizer five years later, schools began moving again.

The bill would limit that process, sometimes called “hopping and shopping,” by requiring schools to get permission from both their old and new authorizers and meet a series of criteria.

Authorizers would have to shut down schools that failed to meet state standards three years in a row, and the state Department of Education could close authorizers that failed to do so.

Becoming a sponsor would also require more steps, with approval required by the state education agency. Under existing law, becoming a sponsor and contracting with a charter school requires only a notice to the state.

The bill would also require authorizers, management organizations overseeing operations for schools, and charter school board members to follow the same laws about transparency, conflicts of interest and oversight as traditional public school districts.

“We had nobody overseeing the authorizers,” Hembree, a Little River Republican, said Tuesday.

Just as Erskine prompted the bill in the first place, the Legislative Audit Council’s report on Erskine prompted most of the changes made Tuesday, as Hembree pulled recommendations from it. About half of them were already part of the bill.

Changes to the bill included a prohibition on authorizers owning any property not “necessary or convenient” to run its charter schools, making it clear that charter schools are subject to the same spending oversight as traditional public school districts, and a requirement that all charter school board members go through annual training.

SC charter schools are growing yearly. Senators want more accountability.

“If we pass this, are we truly reforming the charter school system in South Carolina?” Senate Minority Leader Brad Hutto, an Orangeburg Democrat, asked Hembree on Tuesday.

“I think we’re making it a lot stronger,” Hembree replied.

Some charter schools do a great job of educating students, but legislators need to make sure that’s the case at all of them, Hutto said. Under existing law, failing charter schools can escape accountability by switching authorizers and the state education department can do nothing about it.

“Charter schools have a valuable place within our education system,” Hutto said. “But they need to be providing the quality education at or similar to, at least, what we expect of the public school system.”

The bill also tries to create more oversight of the management companies some charter schools hire to oversee operations.

“I’ve always had an uneasy feeling about it,” Sen. Russell Ott said Tuesday. “I don’t like the fact that we’re essentially having charter schools hire private, for-profit management companies come in and run the school, essentially.”

“In my mind, the board should be making those decisions,” the St. Matthews Democrat added.

Charter schools would have to let authorizers look over any potential contracts with a management company, giving the sponsors a chance to warn the school if its board chooses a company with an unsavory reputation, Hembree said. The authorizers couldn’t tell a school not to sign the contract, though.

“At least in this bill, you give the authorizer the opportunity to intervene and say, ‘Hold it,’” Hembree said.

The management organizations would also be subject to the same conflict of interest rules as charter schools and authorizers, barring people from serving on the board of a charter school while running a management company.

Representatives question Charter Institute at Erskine

The Senate bill came up repeatedly as a House budget-writing panel went through the state audit point by point, asking the institute’s superintendent to explain each concern raised in the report.

State law allows authorizers to keep 2% of state aid going to the schools they sponsor, which is supposed to cover administrative expenses. In Erskine’s case, that’s expected to total $5.6 million this school year, according to the institute.

The charter institute did not break the law, auditors concluded and institute Superintendent Cameron Runyan emphasized Tuesday.

Erskine has already created several of the policies recommended in the report, including keeping donations and private funds separate, requiring board approval for international travel and cutting ties with a nonprofit the institute was running for recruiting teachers, Runyan said.

“We certainly don’t get everything right,” Runyan said. “There’s no doubt. But what I can tell you is that our heart and every effort that we make at the charter institute is for children.”

Still, representatives questioned whether the institute was a good steward of taxpayer dollars.

For instance, legislators asked, did charter leaders really need to visit London and Stockholm with their families to speak with international school leaders? Why does the institute own an event venue in Columbia’s tallest building? And should a principal at Gray Collegiate Academy really make more money than most of the state’s superintendents?

“To me, just my bias, one dollar away from education is the worst sin that you could possibly do,” said Rep. Neal Collins, R-Easley.

All international travel was done using private donations, and all sightseeing was after hours, Runyan said.

The charter institute bought the 25th floor of a building across the street from the Statehouse because it needed a bigger office, and the event space is often used for school activities, such as graduations, proms and conferences along with being rented out for weddings and private events, he said.

Pay decisions are up to charter schools’ boards, not authorizers, Runyan said.

House Education Chairwoman Shannon Erickson peppered Runyan with questions about how the authorizer operates and how it should run, including whether its leaders should be subject to state laws about ethics and access to records.

Although Runyan said the institute is as transparent as possible, Erickson said she needed more assurance that Erskine was really using its state money in the public’s best interest. Even if the institute is operating legally, any public perception of problems could sour people on school choice as a concept, she said.

“I know you didn’t break any laws,” the Beaufort Republican said. “However, the ethics part and the smell test of it leaves me wanting.”

The bill the Senate passed Tuesday will help quell many of the concerns the House panel had, Runyan said. Much of the report came down to the authorizer operating in legal gray areas the bill would clear up if it passes the House.

“That legislation, if it becomes law as it’s currently written, will mandate those types of increased transparency,” Runyan said.